COUNTRY

Mauritius is well positioned between Africa, India and Southwest Asia

Arab traders were the first to land on Mauritius during the 14th and 15th centuries, however, they deemed the island too far off their trade routes to be worth settling; Portugese explorers, who followed them, thought the same.

The island of Maurtius was first colonised by the Dutch in the 17th century; then in the latter half of that century came a wave of French immigrants who brought their African slaves with them. Britain took over Mauritius in 1810 and abolished slavery in 1835. To replace slave labour, indentured labour was introduced, until this too was stopped in 1922. After this, immigrants continued to arrive, mostly from South Asia, though not in the same numbers as during the indentured years.

Mauritius gained independence from Britain in 1968, though the UK retained governance of the Chagos Archipelago; this is still a source of dispute between the two countries. At the request of the USA, the Chagossians were evicted wholesale from their island homes from 1968 to 1973 – one of the West’s less edifying actions. Though Mauritius became a republic in 1992, it has remained a member of the Commonwealth; it is also a member of the Association of Francophone Countries and the United Nations.

The official language is English, the dominant ethnic group is Indo-Mauritian (that is, mostly of Indian extraction) and the most popular religion is Hinduism. The Government is presidential in style, with a single elected National Assembly and a Council of Ministers headed by a Prime Minister. The legal system reflects the country’s mixed French and British ancestry, and administration can be bureaucratic in the French style.

And its economic future is dependent on exports.

At present, about 37% of Mauritian land is arable; sugar remains the dominant crop and accounts for a third of exports. Apart from encouraging tourism, the Government has tried hard to create a manufacturing sector with a range of investment incentives, free trade zones and a freeport, although these are being phased out as part of simplifying tax reforms. Garment manufacture has been a particular success. More recently, a financial services sector has developed, including a stock exchange, to take advantage of Mauritius’ location offshore from India and Africa. The Government is enthusiastic about e-commerce and has built a ‘Cyber City’.

The offshore sector is plotting a middle course

Until 1998, the Offshore Company and International Company (equivalent to an IBC) allowed zero taxation across a range of offshore activities including banking, shipping, insurance and fund management, as well as in the free trade zones. These two types of company are known as Global Business Companies Categories 1 and 2 (GBC1 and GBC2).

Mauritius has decided to be a ‘respectable’ IOFC and there is now a flat tax rate of 15% in almost all areas. Some dilution of the foreign tax credit applied from 2003. However, Mauritius has signed tax treaties with more than 40 countries, and they can be combined with the offshore regime to give a good result, especially for trade and investment in India. Mauritius was one of six offshore jurisdictions which wrote ‘commitment letters’ to the OECD in May 2000 in order to avoid being included on the OECD’s list of jurisdictions offering ‘unfair’ tax competition. In 2009, Mauritius committed to the OECD’s new tax standard (12 TIEAs).

As is the domestic sector

The domestic and offshore sectors have traditionally been quite firmly separated, although recent legislation, particularly in the banking sector, has begun to remove the distinction between ‘onshore’ and ‘offshore.’ Export-oriented domestic manufacturers and service providers get favoured treatment. Until the introduction of the 15% ‘flat tax’ domestic income tax, rates were moderately high, and property transactions are expensive in tax terms.

Sugar (well it has to come from somewhere) remains the dominant crop and accounts for one third of exports. Export-oriented domestic manufacturers and service providers get favoured treatment. The government has tried hard to create a manufacturing sector with a range of investment incentives, free trade zones and a Freeport. Garment manufacture has been a particular success, and a financial services sector including a stock exchange has also developed. The government is enthusiastic about e-commerce and has built a ‘Cyber City’. There is a flat tax rate of 15% in almost all areas. Mauritius has signed more than 40 tax treaties, and acts as a conduit for FDI, particularly to India, which would like to trim back its tax advantages.

TAXATION

  • Headline tax rates: CIT 15% (offshore trading company 3%), PIT 15%, VAT 15%
  • Treaty Jurisdictions: Australia, Bangladesh, Barbados, Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Monaco, Mozambique, Namibia, Nepal, Oman, Pakistan, Qatar, Rwanda, Senegal, Seychelles, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, Tunisia, Uganda, United Arab Emirates, United Kingdom, Zambia, Zimbabwe
  • TIEA Jurisdictions: Australia, Denmark, Faroe Islands, Finland, Greenland, Guernsey, Iceland, Norway, United States

BUSINESS

  • Suitable for: Treasury Management, Banking, Insurance, Fund Management, Shipping, Yachting, Trading Financial, Intellectual Property/Licensing, Holding Companies, E-commerce
  • Vehicle Types: Limited companies, public limited companies, trusts, sole proprietorships, branches, general partnerships and limited partnerships
  • Formation Cost: 2300 – 3900 USD
  • Formation Time: 12 – 20 days
  • Maintenance cost: 1100 – 1900 USD

INCORPORATION

As of 2019, there are no more GBC II entities. The new structure is the formation of a Mauritius company with a Global Business License (GBL). We form Mauritius companies. So, the following article talks about the prior company type. The new one is a GBL.

Setting up a company in Mauritius is regulated by corporate legislation in Mauritius called the Companies Act of 2001. With the passing of this act, Mauritius became a modern financial hub. The GBC II Company falls under the Global Business Category 2 (GBC II) area of the Companies Act, which focuses on offshore non-tax residents in Mauritius. GBC IIs are not able to access the numerous Double Taxation Treaties which Mauritius has signed with other countries.

Other corporate legislation that influences the business sector in Mauritius includes the Financial Services Act of 2007 and the Finance (Miscellaneous Provisions) Act of 2012.

Difference Between GBC I and GBC II (GBC 1 and GBC 2)

The difference between the Mauritius GBC I and GBC II is that the GBC I is for local business owners and the GBC II is the offshore company in Mauritius that is created for people who do not live in the country. GBC stands for Global Business Company. The following table summarizes the key differences between the Mauritius GBC 1 and GBC 2.

Mauritius GBC I

  • For operating a business within Mauritius
  • Taxed at 15%
  • Must have a resident secretary
  • Human director only
  • Must hold annual meeting
  • Must file audited accounts
  • Filed in 15-20 days

Mauritius GBC II

  • Private offshore company for foreign owners
  • Tax exempt
  • 100% foreign owners/officers/directors acceptable.
  • Can have a corporate or human director
  • Optional
  • Audited account filing not required
  • Filed within 5 days typically

GBC I Local Company

Company Name: A Mauritius GBC I Local Company must register a unique name that is not similar to the names of already existing companies or corporations.

Office Address and Local Agent

  • A Mauritius GBC I Local Company must have a registered local agent and a local office for process service requests and official notices.
  • In Mauritius, only a licensed Management Company can act as a registered agent and also be the company’s secretary.

Shareholders: A Mauritius GBC 1 Local Company is required to have at least one shareholder.

Directors and Officers

  • A Mauritius GBC 1 Local Company must have at least one director who must be a local resident and natural citizen. In order to qualify for treaty access, the company then must name two local directors.
  • A Mauritius GBC 1 Local Company must also have a local registered secretary, which can also be the company’s registered local agent.

Authorized Capital: A Mauritius GBC 1 Local Company only needs to pay an authorized share capital of US $1.

Annual Fees:

  • A Mauritius GBC 1 Local Company pays annual renewal fees including:
  • A payment to the Financial Services Commission (FSC) of Mauritius of $1,500 USD per year.
  • A payment to the Registrar of Companies of Mauritius of $250 USD per year.

Public Records: Nominee share holders can be used for a Mauritius GBC 1 Local Company, but to qualify as a Mauritius GBC 1 company under the treaty, beneficial owners should be disclosed.

Company tax records and financial filings, which are required annually, are not filed as public records.

The law provides confidentiality to the effect that no disclosure on global business entities shall be made by FSC employees to any authority in Mauritius or elsewhere. However, there are a few exceptions to this rule:

  • A court order regarding money laundering or arms trafficking pursuant to relevant Mauritian laws or if required under any international treaty; or
  • a court order for the purpose of any official enquiry or trial relating to the trafficking of dangerous drugs and narcotics; or
  • An existing agreement or treaty that Mauritius may have allowing exchange of information with other countries.

Accounting and Audit Requirements

  • A Mauritius GBC I Local Company must file a yearly tax return through the Mauritius Revenue Authority (MRA). In addition, a GBC 1 company must also file, at least six months after the close of the fiscal year, an audited profit and loss account and balance sheet with the Financial Services Commission (FSC). The accounts prepared for the FSC must meet their standards and requirements.
  • All Mauritius GBC 1 Local Companies are expected to keep records that include business accounting, meeting minutes, a members’ register, and a list of holders and officers. Furthermore, it is important for a Mauritius GBC I company to also keep an up-to-date Register of Charges and a Register of Interests. If there is a change with the company, the GBC 1 is expected to file notice of it in order to avoid penalties.

Incorporation

  • For a foreigner, registering a limited liability partnership (LLP) must be met below conditions:
    • A limited liability partnership in Mauritius requires at least 2 partners, who can be non-residents and limited partners.
    • The minimum capital requirement is merely US$1 for each partner.
    • But the business needs to have a manager who is a resident of Mauritius.
    • After fulfilling these requirements, you need to apply for a business license. The business license can either be a GBC1 (offshore company) or GBC2 (international company) license. If this is not obtained, the partners will be subjected to ‘Mauritius personal income tax’ on the income derived from the entity. For a GBC1 license, the manager needs to be licensed as a management member of the company with the Mauritius Financial Services Commission.
    • At present, Mauritius LLPs are allowed to offer consulting and advisory services. But it is expected that the Mauritian authorities will broaden the categories of legal activities for the LLPs in Mauritius.
  • Decide a name for your company and register it with the Mauritius Registrar of Companies. The name may be rejected if
    • It is similar to that of another company
    • It violates a legal enactment
    • It is deemed offensive by the Registrar of Companies
  • Submit a company application along with the following details:
    • Name of the company
    • Type and structure of the company
    • Business name, if any
    • Type of activity the business shall carry out
    • Registered company address
    • Proposed date of commencement of the business
    • Number of employees in the company
    • Official contact details of the company
    • Copy of identity proofs of the directors and the secretary
    • Name and contact details of the shareholders
  • If the application is in accordance with the Companies Act, and the prescribed fee is paid, the Registrar of Companies shall issue a Certificate of Incorporation and a unique Company Number.
  • The Registrar of Companies updates the company information in the Central Business Registration Database. Subsequently, the Municipality, the Mauritius Revenue Authority and the Ministry of Social Security are notified. Thereafter, your company is automatically registered for taxes, and you don’t need to file a separate application for tax registration. The business registration process in Mauritius is easy and gets completed in 4-5 steps without any fuss. The Registrar of Business is where companies can get registered. A couple of forms need to be filled out and a few businesses related documents need to be submitted before the business is registered.
  • An inspection is carried out by the local authorities – the Police Department, the Ministry of Health, the Ministry of Social Security, the Fire Services Department, and the Sanitary Authority – apprising you of their respective guidelines and fees.
  • Register the company with the Social Security office, whom the former should submit a monthly return of contributions.
  • Apply for a business licence, depending on the type of activity your business is to carry out, and pay the licence fee within 15 days of starting the business.
  • Open a corporate bank account for the company, and design a company seal which shall be used for its routine business operations.

GBC II Local Company

Corporate Name

  • A new Mauritius corporation must select a unique name that is not similar to any existing corporations.
  • Mauritius corporations must use wording that denotes the existence of the corporation in its name. These words include: Limited, Corporation, Incorporated, and Public Limited Company or their relevant abbreviations.

Office Address and Local Agent: Mauritius corporations are required to have both a registered local agent and local office address for process server requests and legal notices.

Shareholders

  • Mauritius corporations are required to have at least one shareholder.
  • Shareholders do not need to be local residents and can reside anywhere in the world.

Directors and Officers

  • Mauritius corporations are required to have at least one director.
  • Directors do not need to be local residents and can reside anywhere in the world.
  • Directors and shareholders can be the same individuals.
  • Mauritius does not require its corporations to have a local registered secretary.

Authorized Capital: A Mauritius corporation requires no minimum capital although at least one share must be issued and paid for.

Annual Fees: The annual renewal fee for corporations is £899

Public Records: Documents and records of the business are required to be maintained at the corporation’s registered office. These documents, however, will not be made available to the public. A Mauritius corporation can appoint nominee shareholders and directors for increased privacy.

Accounting and Audit Requirements

  • A Mauritius corporation must keep business records at the company’s registered office.
  • These records include business accounting, meeting minutes, a members’ register, and a list of shareholders and officers.
  • A Mauritius corporation is not required, to file a yearly tax return to the Mauritius Revenue Authority (MRA).

Incorporation

  • For a foreigner, registering a limited liability partnership (LLP) must be met below conditions:
    • A limited liability partnership in Mauritius requires at least 2 partners, who can be non-residents and limited partners.
    • The minimum capital requirement is merely US$1 for each partner.
    • But the business needs to have a manager who is a resident of Mauritius.
    • After fulfilling these requirements, you need to apply for a business license. The business license can either be a GBC1 (offshore company) or GBC2 (international company) license. If this is not obtained, the partners will be subjected to ‘Mauritius personal income tax’ on the income derived from the entity. For a GBC1 license, the manager needs to be licensed as a management member of the company with the Mauritius Financial Services Commission.
    • At present, Mauritius LLPs are allowed to offer consulting and advisory services. But it is expected that the Mauritian authorities will broaden the categories of legal activities for the LLPs in Mauritius.
  • Decide a name for your company and register it with the Mauritius Registrar of Companies. The name may be rejected if
    • It is similar to that of another company
    • It violates a legal enactment
    • It is deemed offensive by the Registrar of Companies
  • Submit a company application along with the following details:
    • Name of the company
    • Type and structure of the company
    • Business name, if any
    • Type of activity the business shall carry out
    • Registered company address
    • Proposed date of commencement of the business
    • Number of employees in the company
    • Official contact details of the company
    • Copy of identity proofs of the directors and the secretary
    • Name and contact details of the shareholders
  • If the application is in accordance with the Companies Act, and the prescribed fee is paid, the Registrar of Companies shall issue a Certificate of Incorporation and a unique Company Number.
  • The Registrar of Companies updates the company information in the Central Business Registration Database. Subsequently, the Municipality, the Mauritius Revenue Authority and the Ministry of Social Security are notified. Thereafter, your company is automatically registered for taxes, and you don’t need to file a separate application for tax registration. The business registration process in Mauritius is easy and gets completed in 4-5 steps without any fuss. The Registrar of Business is where companies can get registered. A couple of forms need to be filled out and a few businesses related documents need to be submitted before the business is registered.
  • An inspection is carried out by the local authorities – the Police Department, the Ministry of Health, the Ministry of Social Security, the Fire Services Department, and the Sanitary Authority – apprising you of their respective guidelines and fees.
  • Register the company with the Social Security office, whom the former should submit a monthly return of contributions.
  • Apply for a business licence, depending on the type of activity your business is to carry out, and pay the licence fee within 15 days of starting the business.
  • Open a corporate bank account for the company, and design a company seal which shall be used for its routine business operations.