Mauritius is a premier international business centre located in the Indian Ocean. Over the past 20 years Mauritius has enjoyed unprecedented growth and socio-economic development and has emerged as a political stable democracy that welcomes foreign investors and businesses. Mauritius has become a credible jurisdiction for offshore company formation offering a reliability and security to investors through its flexible regulatory framework.
The Mauritian Government actively encourages foreign investment and offshore activity through the Board of Investment. The government introduced wide ranging incentives to attract foreign investment and consolidation of the legal and fiscal framework has resulted in modern, user-friendly legislation that has contributed to the rise of Mauritius as a major offshore financial service centre. The government’s development strategy centres on foreign investment and due to this Mauritius has attracted thousands of offshore entities.
The credibility of Mauritius for offshore investments has been solidified by adherence to the new international requirements involving combating financial terrorism and money laundering. This has facilitated Mauritius to enjoy a reputation as a trustworthy, well regulated offshore centre with guaranteed confidentiality.
Key Benefits for registering a company in Mauritius
Forming a company in Mauritius is a simple, straightforward process regardless of whether you choose a GBC1 Company (a Resident Company) or a GBC2 (an Offshore Company). If correctly structured a Mauritius Company is an efficient, low-cost, legally tax efficient entity in which to conduct business. There are a number of benefits attached to incorporating a GBC1 and GBC2 company in Mauritius.
GBC 1 Companies features & benefits:
GCB1 Companies are treated as tax resident and are liable to pay taxes on their earnings however because of this they are also entitled to the benefits of the extensive Mauritian Double Tax Treaties. A GBC1 may be a locally incorporated company or may be a branch of a foreign company. Business must be conducted in a foreign currency and cannot engage in business in Mauritius.
- Requires a minimum of one Director who must be a natural person (Service Pro can provide nominee Directors).
- A minimum of one Shareholder is required who can be of any nationality and need not be resident in Mauritius. Corporate Shareholders are permitted.
- A resident Company Secretary is required (Service Pro can provide this).
- Business can be conducted internationally.
- GBC1 Companies are regarded as being resident therefore are able to take advantage of the Mauritian Double Tax Treaties. The tax treaty is particularly favourable with India and Mauritius has become a popular location for holding companies for those trading or investing in India.
- GBC1 companies can utilize the unilateral foreign tax credit which stands at 80% of the Mauritian Tax Rate, which leaves a residual liability of 20% of the Mauritian rate which is equal to 3%. There are current discussions on possible further reductions on this rate.
- No Capital Gains or withholding taxes levied.
- No limit on the carrying forward of tax losses.
- No Withholding Tax on dividends, interest, royalties and payment of redemption proceeds.
- Entitled to underlying tax credits on dividends if shareholding in Investee Company is greater than 5%.
- Interest received on deposits in Mauritian bank accounts are tax exempt.
- Inheritance tax, gift and estate taxes are not applicable.
- No stamp duties, registrar duties or levies.
- A branch of a foreign company may also have access to the tax treaty network provided that the local authorities are satisfied that effective management and control of the foreign branch is in Mauritius.
GBC 2 Companies features & benefits:
GBC2 Companies are private entities that conduct business outside Mauritius, a GBC2 Company is not allowed to conduct business in Mauritius. A GBC2 may be a locally incorporated company or registered as a branch of a foreign company. Confidentiality is a major benefit to a GBC2 and the identiy of the beneficial owner can remain largely confidential. A GBC2 is a good structure for holding and managing private assets.
- High degree of privacy protection (through the use of nominee Directors and shareholders).
- Mauritius company formation permits 100% foreign ownership meaning no local nominee is required.
- Only one Director and one Shareholder required.
- Legal tax exemption for GBC2 Companies but no access to the Mauritian Double Taxation Treaty allowed.
- No accounting or reporting requirements which minimise maintenance costs.
- GBC2 company enjoys limited liability without any paid up capital (there is no minimum capital required).
- No Withholding Tax on dividends.
- No Capital Gains Tax.
- No Stamp Duty on transfer of shares.
- Free repatriation of earnings.
- Migration from a foreign company to/from Mauritius is permitted.
- Shareholders and Directors can meet anywhere.
- Registered office and agent in Mauritius is required.
- Conversion to GBC1 is permitted.
Mauritius & Cyprus company comparison table
|Price of Registration:||€1550|
GBC 1 – $6500GBC 2 – $3200
GBC 1 – $4200GBC 2 – $1900
|Bank Account:||€450||From $2000|
|EU Member State:||Yes||No|
|Currency:||Euro (€)||Mauritian Rupee (MUR)|
|Corporation Tax Rate:||12.5%||- GBC1 companies at 15%|
- GBC2 companies at 0%
- Other companies at 15% (Alternative Minimum Tax may apply).
|Capital Gains Tax Rate:||20% (only on immovable property situated in Cyprus).||0%|
|VAT Standard Rate:||19%||15%|
|VAT Reduced Rate:||9%, 5% & 0%||n/a|
|VAT Registration Threshold:||€15,600||MUR 2,000,000|
|Tax Return Requirement:||Yes||Yes|
|Tax Rate on Dividends from Local Investments:||0%||0%|
|Tax Rate on Dividends from Foreign Investments:||0% (subject to easily met criteria).||- GBC1 companies - 3%|
- Other companies - 15% (or Alternative Minimum Tax).
|Tax Rate on Interest Income:||12.5% for active and 30% for passive interest income.||- GBC1 companies - 3%|
- Other company types - 15% (or Alternative Minimum Tax).
|Withholding Tax on Interest Payments to Foreign Recipients:||0%||- GBC1 companies - 0%|
- Other companies - 15%
Tax and accounting regulations
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Service Pro can assist by structuring the most tax efficient strategy to satisfy your requirements. Service Pro will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Service Pro will provide tax planning advice that will identify which is the most favorable tax efficient jurisdiction in which to incorporate.
Below is an overview of the tax and accounting regulations for GBC1 and GBC2 Companies in Mauritius.
- GBC1 - Utilizes the unilateral foreign tax credit which stands at 80% of the Mauritian Tax Rate, which leaves a residual liability of 20% of the Mauritian rate which is equal to 3%. There are current discussions on possible further reductions on this rate.
- GCB2 – 0% tax rate on worldwide profits
- GBC1 – Income tax is 15% however can be reduced to 3% due to foreign tax credits
- GBC2 – No taxation on income
- GBC1 – No payment of taxation on royalties. Royalty fees paid to foreign affiliates are allowed as expense items.
- GBC2 – No payment of taxation on royalties
There following are exempt from tax for both a GBC1 and a GBC2: Dividends, Interest, Capital Gains, Capital Duties or Net Worth.
International aspects of taxation:
- Compliancy – Anti-avoidance regulation is strictly enforced.
- Transfer Pricing – There is no specific legislation in Mauritius tax code.
- Double Taxation Treaties - GBC1 – Mauritius has signed Double Taxation Treaties with the several countries including: China, India, Germany, France, the UK, Singapore, South Africa, Italy, Malaysia and Indonesia.
- Double Taxation Treaties - GBC2 – Cannot take advantage of the Double Taxation Treaties as these companies are not tax resident in Mauritius.
Annual reporting requirements:
- GBC1 – Required to file an audited profit and loss account and balance sheet annually with the Financial Services Commission within 6 months of the financial year end. Accounts must be prepared in accordance with internationally accepted accounting standards. Tax returns must be filed with the Income Tax Authorities.
- GBC2 – Required to produce financial statements to reflect the financial position. Annual accounts must be filed with the authorities within six months of the balance sheet date and details of the beneficial owner along with an outline of the company objectives must be submitted to the Financial Services Commission. No audit is required.
Requirements and administration guidelines
- GBC1 – There are no minimum capital requirements. Capital can be in any currency except the Mauritian Rupee. Bearer shares are not permitted. A minimum of one Shareholder is required. The shareholder can be any nationality and does not need to be resident in Mauritius.
- GBC2 – There are no minimum capital requirements. Bearer shares are permitted, Share Capital is unlimited and there are no extra fees for high capitalization. A minimum of one Shareholder is required. Any change on the beneficial ownership must be notified to the Financial Services Commission in Mauritius within one month.
- GBC1 – A minimum of one director is required however to take advantage of the Double Taxation Treaties two resident Mauritian Directors are required.
- GBC2 – A minimum of one director is required; can be either a corporate or individual
Restrictions on Name & Activity:
- GBC1 – It is prohibited for company names to contain words such as ‘Bank’, ‘Insurance’, ‘Building Society’ or ‘Trust’
- GBC2 – It is prohibited to use any name that is similar to an existing company name
- GBC1 – A Registered Agent and Registered Office in Mauritius is required. The Registered Agent must be appropriately qualified to act as such, for example a lawyer, Licensed Management Company etc. A company secretary is also required. The secretary must be qualified and resident in Mauritius. All records must be kept in the registered office.
- GBC2 – A Registered Agent and Registered Office in Mauritius is required. The Registered Agent must be appropriately qualified to act as such, for example a lawyer, Licensed Management Company etc. A secretary is required but there is no requirement for a qualified, Mauritian Resident to undertake this position.
- GBC1 – Beneficial Owners details are disclosed to the Mauritian Authorities but they are not made available to the public.
- GBC2 – There is no requirement to disclose Beneficial Owners details to the Mauritian Authorities.
- GBC1 – Approximately 3-4 weeks is required.
- GBC2 – Approximately 2 weeks is required.
Procedure of company registration
Mauritius offers two types of Offshore Companies; Global Business Company Category 1 (GBC1) and Global Business Company Category 2 (GBC2). Both are governed by the 2001 Companies Act and regulated by the Mauritius Financial Services Commission. Outlined below are the requirements for registering a GBC1 and GBC2 in Mauritius along with the processes and procedures, administration issues and reporting requirements.
Procedure for GBC1 & GBC2 company registration:
The procedure for the formation of a Mauritius Offshore Company is as follows:
- An application form is completed with details of preferred name and details of beneficial directors and shareholders (nationality, country of residence, address, profession etc)
- A scanned copy of the passport of the beneficial directors and shareholders is required
- A bank reference letter
- A scanned copy of proof of residence. This can be in the form of a utility bill, bank statement or bank reference and must not be older than 3 months
- A bank reference letter and brief business plan
- At this point Service Pro will issue an invoice for a Mauritius Company formation. Upon receipt of money we start the incorporation process.
- The completed application form plus the Constitution of the Company (this replaces the standardised Memorandum and Articles of Association) is sent to the Registrar of Companies in Mauritius. An application is made in parallel to the Financial Services Commission of Mauritius for a Global Business License.
- The process takes approximately 7-10 days for a GBC1 and 2 days for a GBC2
Service Pro can help you become a Full Service Investment Dealer that is licensed in Mauritius.
This license will allow you to provide the following services:
- Act as an intermediary in the execution of securities transactions for clients;
- Trade in securities as principal with the intention of reselling these securities to the public;
- Give investment advice which is ancillary to the normal course of his business activities; and
- Manage portfolios of clients
The minimum capital requirement shall be Rs 1,000,000 equivalent to USD 34,000.
The company will need to be structured as a company holding a Global Business Category One License (GBL1). The Forex dealing activities falls under the Investment Dealer category. GBL1 are governed by the Income Tax Act 1995, under which they are taxed at the flat rate of 15%. Mauritius law allows an underlying foreign tax credit, equal to the amount of foreign taxes paid, up to the amount of tax due in Mauritius. In the absence of proof, the amount of foreign tax paid is presumed to be 80% of the Mauritius tax. The effective tax rate can thereby be reduced to a maximum of 3%. There is no capital gains tax, nor withholding tax on dividends and interest paid to non-residents.
Description of services provided by Service Pro’s Associate in Mauritius:
A. The Company’s Registered Office
B. Two (or such other number as may be mutually agreed) persons residing in Mauritius and who shall be persons of appropriate calibre to exercise independence of mind and judgment to be directors of the Company.
C. The administration of the Company.
D. Act as Corporate Secretary for the Company.
E. Assist in opening one (or more) bank account(s) in the name of the Company, its principal bank account being opened with a bank in Mauritius.
F. Treat as confidential all information exchanged with the Client.