Description

Offshore Business Incorporation in Mauritius

Mauritius is a well-established offshore financial center, offering a favorable environment for international business with robust legal and regulatory frameworks. Its tax incentives, access to global markets, and strong privacy protections make it an ideal location for offshore business incorporation in Mauritius. Mauritius is also a member of several international organizations, including the African Union and the World Trade Organization, which enhances its credibility as an offshore jurisdiction.

Key Advantages of Offshore Business Incorporation in Mauritius:

1. Low Corporate Tax: Mauritius offers a corporate tax rate of 15%, with possible tax credits that can reduce the effective tax rate to 3%.
2. Extensive Double Taxation Treaties (DTTs): Mauritius has signed DTTs with over 40 countries, including India, China, and several EU nations, providing significant tax benefits to companies operating in multiple jurisdictions.
3. Strong Regulatory Framework: The Mauritius Financial Services Commission (FSC) regulates offshore companies, ensuring compliance with international standards while offering flexibility for global operations.
4. No Capital Gains Tax: Mauritius does not impose capital gains tax, making it attractive for companies involved in investment holdings.
5. Political and Economic Stability: The country’s stable political environment and strong legal system based on English common law provide security for international businesses.
6. Free Repatriation of Profits: There are no restrictions on repatriating profits or dividends from Mauritius, allowing companies to move funds freely across borders.

Main Types of Offshore Entities in Mauritius:

1. Global Business Company (GBC): The GBC is the most common offshore entity in Mauritius, used for holding and managing international investments, trade, and other business activities. GBCs can benefit from the country’s DTT network and low effective tax rates.
2. Authorized Company (AC): This type of company is designed for entities whose control and management are outside Mauritius. ACs are not considered tax residents in Mauritius and do not have access to its DTT network, but they enjoy a zero-tax regime for foreign-sourced income.
3. Trusts and Foundations: Mauritius is also a popular jurisdiction for establishing offshore trusts and foundations, offering a high degree of asset protection, tax planning, and estate management benefits.

Incorporation Process for a Global Business Company (GBC) in Mauritius:

1. Company Name Approval: The proposed company name must be approved by the Registrar of Companies. It must be unique and not similar to existing company names in Mauritius. The use of certain words like “bank,” “insurance,” or “trust” may require special permission.
2. Shareholders and Directors: A GBC  must have at least two directors and one shareholder (either an individual or a legal entity), and a company secretary is also required. Directors and shareholders can be of any nationality.
3. Registered Office and Agent: Every GBC must have a registered office in Mauritius and appoint a registered agent who will handle administrative functions and ensure compliance with local regulations.
4. Minimum Share Capital: Although there is no prescribed minimum capital for a GBC, companies typically register with a nominal share capital to meet the requirements of their specific business operations.
5. Bank Account: A GBC must open a local bank account in Mauritius to conduct its financial transactions and maintain its local presence.
6. Incorporation Timeline: The incorporation process for a GBC generally takes between 2 to 4 weeks, depending on the complexity of the business and the completion of all necessary documentation.

Reporting and Compliance:

1. Annual Financial Statements: GBCs are required to maintain proper financial records and file annual financial statements, which must be audited by a local accounting firm.
2. Tax Returns: A GBC is considered tax resident in Mauritius and must file tax returns annually. The corporate tax rate is 15%, but with foreign tax credits, the effective tax rate can be as low as 3%.
3. Annual General Meeting (AGM): A GBC must hold an AGM within six months of the end of its financial year. Shareholders may attend the meeting in person or virtually.
4. Economic Substance Requirements: To maintain its tax resident status and benefit from Mauritius’ DTTs, a GBC must fulfill economic substance requirements, including maintaining an office, employing local staff, and having management activities in Mauritius.

Tax Residency:

A GBC is considered tax resident in Mauritius if its management and control are exercised from within Mauritius. To determine residency, authorities look at factors such as:

• The location of board meetings (which should take place in Mauritius).
• The presence of local directors.
• Local bank accounts and the control of company finances.

Mauritius-based GBCs can apply for a Tax Residency Certificate (TRC), which allows them to benefit from the extensive DTT network for reducing withholding taxes on dividends, interest, and royalties.

Asset Protection and Legal Framework:

Mauritius offers a high level of asset protection through its legal framework. Trusts and foundations established in Mauritius enjoy robust protections against external claims and foreign judgments. The country’s laws are designed to safeguard assets held within its jurisdiction from creditors, divorce settlements, and other external threats.

Key Considerations for Incorporating in Mauritius:

• Nominee Services: To protect the privacy of beneficial owners, nominee shareholders and directors can be appointed.
• Access to African and Asian Markets: Mauritius is an ideal jurisdiction for companies looking to do business in Africa and Asia, thanks to its strategic location and business-friendly environment.
• Compliance with International Standards: Mauritius complies with international regulations on anti-money laundering (AML) and combating the financing of terrorism (CFT). Companies must adhere to strict compliance and reporting requirements.

Conclusion:

Mauritius is a prime destination for offshore business incorporation, offering a favorable tax regime, access to international markets, and strong asset protection. Its extensive DTT network and robust legal framework make it an attractive jurisdiction for global businesses seeking tax efficiency and privacy. The GBC structure, combined with flexible regulatory requirements and economic stability, positions Mauritius as a top choice for international investors and companies.