Company Formation in
Mauritius

Mauritius combines almost all the characteristics for an ideal offshore location. It is an independent sovereign State with an economy of substance. It is politically stable and is equipped with the state of the art telecommunication technologies. It has a pool of bilingual professionals trained in Europe and the US. The country has a dynamic banking system with only internationally renowned banks operating in an exchange control free environment. Mauritius has an expanding network of double taxation which allow for efficient tax planning.

The Mauritius International Financial Centre

The Mauritius IFC is now a well-established jurisdiction in the international tax planning landscape. Indeed, it has been used for structuring several high-profile investments into Europe as well as emerging markets in Asia (particularly China and India), Africa and the Far East.

Following the recent amendment and consolidation of the main legislative instruments – the Companies Act 2001, the Trusts Act 2001, and the Financial Services Development Act 2001, this legal framework around the IFC has now reached the highest standards desired by operators in the global financial services market. Moreover, the enactment of laws such as the Financial Intelligence and Anti Money Laundering Act gives to investors and their business partners the confidence of operating in a safe and properly regulated environment.

The tax framework is stable, clear, and very conducive for business operations. Thus, there is no withholding tax on dividends or interests paid by Mauritian companies to non-resident beneficiaries, no capital gains tax and no inheritance tax.

The Key IFC for Global Business Operations

The most frequently used vehicles in the Mauritius IFC are entities holding either a Global Business Licence category 1 (GBL1) or a Global Business Licence category 2 (GBL2) issued by the Financial Services Commission, the regulatory body.

The principal characteristics of a company holding a gbc2 are:

The company is allowed to carry out “qualified global business activities” which include consultancy services, employment services, financial services, insurance, licensing and franchising, investment holding, asset management, aircraft financing and leasing, pension funds; trading amongst others;

As a tax incentive company, it is entitled to a nominal tax rate of 15%;

The tax payable can be offset by an extremely generous scheme of tax credits regarding income derived from outside Mauritius, including the possibility of claiming a “deemed tax credit” equal to 80% of the income tax that would otherwise be payable on such income, reducing the payable tax rate to 3%;

Subject to the company having its “effective management” in Mauritius, it can benefit from the wide network of very favourable double taxation avoidance treaties in place with tax territories in Europe (France, United Kingdom, Belgium, Luxembourg, etc.), Asia (China, India, Singapore, etc), and Africa (Botswana, Mozambique South Africa, etc.);

A GBC2 vehicle is not considered as being tax resident in Mauritius; the company is therefore not subject to Mauritian tax laws but, on the other hand, it cannot benefit from the network of tax treaties. Thus, such vehicle is generally used for transactions such as trading, and collection of royalties derived from intellectual property rights.

Mauritius Offers Various Benefits and
Tax Advantages

No withholding tax on interest, royalties and dividends.
No capital gains tax.
Interest paid on deposits in Offshore Banks are tax exempt.
Dividend paid are tax exempt.
Royalties paid to non-resident are tax exempt.
No estate duty, inheritance, wealth or gift tax.
No stamp duties, registration duties, levy.
Zero rated Value Added Tax for offshore business transactions.
Duty concessions on office equipment, furniture and motor vehicles and raw material and machines for Freeport, Offshore and tax incentive Companies.
No exchange control and free repatriation of profits.
Global Business Category 2 Companies, Freeport Company and non-resident trusts are tax exempt.
Tax incentives Companies are taxed at 15 %.
Foreign tax credit of 8 % on Offshore Companies.
Relief of 50 % on personal income for expatriates.
Tax holiday up to 2008 for specialized ICT operators.
10 year tax holiday for Regional Headquarters Companies on foreign sourced income.
Grant of a permanent residence status for professional with possibility to acquire immovable property in the Financial and ICT sector (SAPES).
Member of the COMESA, an east African free trade zone grouping a status.
Signatory member of the Africa growth and opportunity Act which allow export to the United States of America free of duties and quota.
Grant of permanent residence scheme for non-citizens investing a minimum of USD 500,000 in a specific project or in Permanent Residence Investment Fund.