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MAURITIUS GBC I COMPANY (Tax Resident - Treaty Access)

Overview Key Corporate Features General Information Company Information Compliance Related Resources How to Proceed

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OVERVIEW

Mauritius GBC 1 Companies are resident in Mauritius and consequently subject to tax. However, they benefit from both tax credits and a longstop tax rate of 3%. Correctly structured and managed Mauritius GBC 1 companies may access Mauritius' network of 37 tax treaties. Neither capital gains nor withholding taxes are levied. Consequently, Mauritius GBC I companies are used by tax practitioners and businesses to structure investments into Mauritius' treaty partners, which include China, India, Luxembourg and Thailand.

Mauritius GBC 1 Companies are governed by The Companies Act, 2001 and regulated by the Mauritius Financial Services Commission. They are subject to compliance and reporting regimes similar to those of Hong Kong or UK companies.

All companies seeking to benefit from this status are granted licenses on a case by case basis by the regulatory authorities in Mauritius. This procedure demands the submission of a detailed business plan and disclosure of beneficial ownership.

Normally it takes about 3-4 weeks to set up a Mauritius GBC 1 Company.

KEY CORPORATE FEATURES
General
Type of Company GBC I
Type of Law Hybrid
Shelf company availability No
Our time to establish a new company 4 weeks
Minimum government fees (excluding taxation) US$1,750 to FSC and US$350 to ROC
Corporate Taxation Varies from 0% to 3%
Double Taxation Treaty Access Yes
Share capital or equivalent
Standard currency US$
Permitted currencies Any except Rs.
Minimum paid up US$1
Usual authorised US$1,000,000
Directors
Minimum number Two
Local required 2 required
Publicly accessible records No
Location of meetings Anywhere, but include at least 2 directors from Mauritius
Shareholders
Minimum number One
Publicly accessible records No
Location of meetings Mauritius - by proxy
Company Secretary
Required Yes
Local or qualified Local and qualified
Accounts
Requirements to prepare Yes
Audit requirements Yes
Requirements to file accounts Yes
Publicly accessible accounts No
Recurring Government Costs
Minimum Annual Tax / Licence Fee US$1,750
Annual Return Filing Fee US$220
Other
Requirement to file annual return No
Change in domicile permitted Yes

GENERAL INFORMATION

Mauritius is situated in the Indian Ocean approximately 800 km off the East Coast of Madagascar.

Population

The population of the Island is approximately 1,200,000 made up principally by people of European, African, Indian and Chinese origin. Mauritius takes pride in the fact that these different cultures co-exist in peace and succeed in creating a cultural entity that is distinctly Mauritian.

Political Structure

The British ruled Mauritius for 158 years until 12 March 1968 when it became an independent country within the Commonwealth. The Republic of Mauritius is a Westminster style democracy. The President is the Head of State and Commander in Chief. Full executive power rests with the Prime Minister who is Head of Government. The Members of Parliament are elected every five years by popular vote and a number of political parties contest the elections every five years, reflecting the country's firm commitment to a multi-party political system.

Economy

Since independence in 1968, Mauritius has developed from a low income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been of the order of 5% to 6%.

The government's development strategy centres on foreign investment. Mauritius has attracted more than 15,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over US$ 1 billion.

Language

English is the official language. However, the Mauritian population is largely bilingual, being equally fluent in English and French. Creole is also spoken and understood by everyone.

Currency

Mauritian Rupee.

Exchange Control

None.

Type of Law

Common Law for corporate matters.

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MAURITIUS GBCI COMPANY INFORMATION

Principal Corporate Legislation

The Companies Act 2001.

Financial Services Act 2007.

A Company holding a Category 1 Global Business License is resident for tax purposes and can access Mauritius' network of double tax treaties, provided that it is correctly structured and that the seat of management and control is in Mauritius.

Procedure to Incorporate

Once name approval has been obtained, three copies of the Constitution (Memorandum and Articles of Association) are submitted, together with a notice of the First Directors, Secretary and location of the Registered Office, and consent forms signed by the Officers.

Restrictions on Trading

A licence is required to undertake banking or insurance business or solicit funds from the public.

Powers of Company

A company incorporated in the Republic of Mauritius has the same powers as a natural person.

Language of Legislation and Corporate Documents

The legislation is in English and French whilst documentation may be expressed in any language but must be accompanied by a certified English translation.

Registered Office Required

Yes, must be maintained in Mauritius at the address of a licensed management company or law firm.

Shelf Companies Available

No.

Time to Incorporate

Three to four weeks.

Name Restrictions

Any name that is identical or similar to an existing company or any name that suggests the patronage of the President or the Government of Mauritius.

Language of Name

English or French.

Names Requiring Consent or a Licence

The following names or their derivatives: assurance, bank, building society, Chamber of Commerce, chartered, co-operative, government, imperial, insurance, municipal, royal, state or trust or any name which in the opinion of the Registrar suggests the patronage of the President or the Government of Mauritius.

Suffixes to Denote Limited Liability

Limited, Corporation, Incorporated, Public Limited Company, Société Anonyme, Société Anonyme à Responsabilité Limitée, Sociedad Anónima, Berhad, Proprietary, Naamloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or the relevant abbreviations.

Disclosure of Beneficial Ownership to Authorities

Yes, not public.

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MAURITIUS GBCI COMPLIANCE

Stated Capital

The Stated Capital comprises the total amount received and receivable by the company with respect to the issue of shares or calls therewith.

Classes of Shares Permitted

Registered shares, preference shares, redeemable shares and shares with or without voting rights.

Taxation

Companies pay a fixed annual licence fee of US$ 1,750 and a one-off non-refundable licence application fee of US$ 500 to the Financial Services Commission. On incorporation a one-off fee of US$ 350 is payable to the Registrar of Companies for private companies. Thereafter a further US$ 350 is payable annually for private companies. Companies are resident in Mauritius for tax purposes. There is no capital gains taxation in Mauritius and there are no withholding taxes on the payment of dividends, interest or royalties from Companies. There are no stamp duties or capital taxes. Companies holding Category 1 Global Business License are liable to taxes at a rate of 15%.

Tax Situation
  • Provided that the Company holding a Category 1 Global Business License owns at least 5% of an underlying company, credit will be available on foreign tax paid on the income out of which the dividend was paid ("underlying foreign tax credit").
  • When a company not resident in Mauritius, which pays a dividend, has itself received a dividend from another company not resident in Mauritius (a "secondary dividend") of which it owns either directly or indirectly at least 5% of the share capital, such dividend will be allowable as a foreign tax credit and an underlying foreign tax credit will also be available.
  • Mauritius has no thin capitalisation rules. Interest and royalty payments paid by Companies holding a Category 1 Global Business License are fully tax deductible in Mauritius.
  • Tax sparing credits are available - Under this regime the effective rate of taxation in Mauritius can be reduced as a long stop provision exists whereby Companies holding Category 1 Global Business License may elect not to provide written evidence to the Commissioner showing the amount of foreign tax charged and enjoy deemed taxation at 80% of the normal rate of 15%, i.e. 12%. Thus, use of this long stop provision in isolation would reduce the effective rate of taxation in Mauritius from 15% to 3%.
Double Taxation Agreements

Mauritius has an extensive double tax treaty network which includes treaties with the following countries: Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India, Italy, Kuwait, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Rwanda, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, Uganda, UK and Zimbabwe.

Licence Fee

US$ 1,750 to the FSC.

Registrar of Companies charge approximately:

  • US$325 Private Limited Company

  • US$450 Public Limited Company

Financial Statements Required

Audited financial statements must be filed with the Financial Services Commission.

Directors

Companies holding Category 1 Global Business Licenses require a minimum of two Directors who must be natural persons resident in Mauritius.

Company Secretary

A qualified resident company secretary must be appointed.

Shareholders

Companies holding Category 1 Global Business License require a minimum of one shareholder and the same rule applies if the company is to be a wholly owned subsidiary. The Financial Services Act requires a GBC I to be administered at all times by a Management Company licensed by the Financial Services Commission and in determining whether a GBL1 should be granted or renewed, the FSC takes into account whether the company will be managed and controlled in Mauritius. In doing so, the FSC may consider, inter,alia, whether the GBC 1:

  • will have or has at least 2 directors of sufficient calibre to exercise independence of mind and judgement, resident in Mauritius;
  • will maintain or maintains at all times its principal bank account in Mauritius;
  • will keep and maintain or keeps and maintains. at all times, its accounting records at its registered office in Mauritius;
  • will prepare or proposes to prepare its statutory financial statements and causes or proposes to have such financial statements to be audited in Mauritius;
  • provides for meetings of directors to include at least 2 directors from Mauritius.
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HOW TO PROCEED

A bespoke 'offshore' solution can be complex and requires careful planning and execution. We therefore encourage our clients to contact us directly, without obligation, for a Free Initial Consultation.

Our experienced consultants will gladly assist with advice on how to approach your particular challenge.

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