offshore

Offshore structures & company formation

Mauritius gained international recognation as a credible finanacial hub.
11

Company incorporation & administration

Global Business Activities
Mauritius is the only business centre in the Indian Ocean offering an attractive package of fiscal incentives and a conducive regulatory framework which has gained international recognition as a credible financial hub. With the globalization of the world economy, investors are constantly on the look-out for an appropriate jurisdiction for commercial reasons such as access to the network of Double Tax Avoidance Agreements, total exemption from exchange control, lower operating costs, availability of highly qualified professionals and so on.

Global Business Companies are governed by the Companies Act 2001 and the Financial Services Act 2007. Such companies may be set up by direct incorporation or by way of continuation. They can also migrate out to other jurisdictions. The regulatory body for global businesses is the Financial Services Commission (FSC).

Global Business Companies are prohibited from dealing or transacting business with local residents or from holding immovable property in Mauritius. The two main types of corporate vehicles presently available to carry on an approved global financial activity from within Mauritius, are the:

  •  Category 1 Global Business Company
  •  Category 2 Global Business Company

 

Qualified Activities

 

 

Shipping and ship management

Aircraft financing and leasing

International Assets management

International consultancy services

Employment services

International financial services

Funds management

ICT Services

Global Insurance including Captive

Logistics and or marketing

International Licensing & franchising

Pension funds

Investment holdings

Trading

Operational headquarters

Leasing Business

International Trading

Any other activity acceptable by FSC


Category 1 Global Business Company (‘GBC1”)

A GBC 1 has to have FSC (Mauritius Financial Services Commission) approval as in being licensed.  A GBC1 has the ability to be qualified as a tax resident in Mauritius. It is on of its features. Mauritius has extensive non-double taxation agreements signed with more than 44 counties. Therefore, Mauritius as a financial jurisdiction can be used widely for international structuring and tax planning. There is no limit on the conduct a GBC1 is allowed to conduct. It can be also listed on any Stock Exchange. A minimum of one Director should be resident in Mauritius at all times. We can also provide nominee services. All shareholders can be non-resident as well. 

Main Characteristics

  • No limit on capital requirement and benefit from the DTAs in force in Mauritius
  • It can be a private or public company and also be allowed to employ expats
  • Company is allowed to be limited by shares or unlimited or limited life company
  • Shares can also be subscribed by nominees, however, beneficial owners should be disclosed.
  • A minimum of one shareholder and one resident director is allowed to be a nominee.
  • There is a requirement for registered office in Mauritius.
  • Shares can be issued with or without a par value.
  • It is mandatory to submit audited accounts to the authority.
  • There should be a resident secretary.
  • Corporate directors are not allowed.
  • Only registered shared are allowed. 

    Main fiscal attractions and advantages

  •  Effective corporate tax (corporate tax can be reduced to 3%).
  •  Tax suffered elsewhere can be applied.
  •  Withholding taxes not applicable on dividends, interests and royalties.
  •  Capital gains tax not applicable on estate duty or inheritance tax payable.
  •  There is an exemption from exchange controls.
  • Access to major foreign currency accounts.

    Tax Residency

    A GBC1 should be tax resident in Mauritius for it to benefit from the Double Taxation Relief, available under the Double Taxation Treaties. It is imperative that is central management and control should be exercised in Mauritius.

    Consequently, to constitute a GBC1, under Mauritian laws, the following is required:

  • We need a minimum of 2 Mauritian board directors (which can be nominees)
  •  It also has to maintain its registered office and all statutory records in Mauritius
  •  There is the necessity of the maintenance of an account with a local Mauritian bank
  •  There is the necessity to appoint a resident secretary and a local auditor.
  • There is a need to chair its board meetings from within Mauritius.
Category 2 Global Business Company (‘GBC2”)

A GBC2 is an appropriate vehicle for holding and managing private assets. This is the case because the shareholding can be structured via nominee shareholding which allows for greater confidentiality. The GBC2 has the characteristics of being non-resident for tax purposes and consequently can be classified as tax exempt entity and therefore cannot be used for tax relief under the current DTAs in force in Mauritius.
 
Main Characteristics

  •  There is no minimum capital requirement.
  • A GBC2 the features of being incorporated with one director and one shareholder.
  • No necessity for resident director.
  • Shareholders and directors can be both corporate entities and natural persons.
  • Shareholders or director’s meetings may be held in or outside Mauritius.
  • There is no requirement for the appointment of an auditor or company secretary.
  • It is mandatory for a GBC2 to have a registered agent which is an Offshore Management Company.
  • It is imperative to have a local registered office.
  • An annual financial summary (unaudited) must be submitted to the regulator.

    Limitations
    GBC 2 cannot:

  •  Cannot raise capital from the public.
  •  Get involved in any insurance, banking and reinsurance related activities or businesses.
  •  Provide the business activity of company formation, administration and management.
  •  Provide professional nominee or trusteeship services.
  •  Provide professional financial services.
  •  Act in any professional function in either an investment fund or collective investment schemes.
  • Propose professional services deemed as fiduciary.
Table of Comparison (GBC 1 & 2)

Table of Comparison between Mauritian GBC 1 and GBC 2

-

GBC 1

GBC 2

Registered Office in Mauritius

Yes

Yes

Minimum number of members

1

1

Corporate shareholder

Allowed

Allowed

Limited life

Allowed

Allowed

Minimum Capital Requirement

None (a)

None

Bearer Shares

Not allowed

Not allowed

No par value shares

Allowed

Allowed

Access to DTA benefits

Yes

No

Taxation

15% (b)

Exempt

Minimum number of Directors

1

1

Minimum number of Shareholder

1

1

Corporate Directorship

Not Allowed

Allowed

Resident Secretary

Yes (c)

Optional

Auditor

Yes

Optional

Resident Agent

Yes

Annual General meeting

Yes

Optional

Filing of Financial Summary – unaudited (to FSC only)

No

Yes

Filing of Audited Accounts (to FSC only)

Yes

No

Freeport activities

Allowed

Not Allowed

Off-the-shelf companies

No

No

Migration into and out of Mauritius

Authorised

Authorised

Incorporation time

About 15/20 days

Max 5 days

Processing fees (ROC & FSC)

US $900

US $165

Annual licence fees

US $ 1,750

US $ 235

Annual Registration fees

US $300

US $65


dta

Double Taxation Treaties(DTA)

Double Taxation Treaties (DTA)
Mauritius has several double taxation treaties which are replicated on the OECD Model Treaty. Under the tax arrangements, tax sparing is available. Consequently, due to the current tax incentive provisions, any dividends sourced from Mauritius are therefore exempt from tax and as a result the foreign investor is entitled to a credit which is the notional amount of Mauritius tax against the tax due is therefore lessening his domestic tax liability.

Tax Treaties in force or under negotiation
Mauritius is party to over 44 treaties which has ratified. There are many other treaties which are currently being negotiated. One example, regarding a treaty which has been used widely is the treaty Mauritius had with India. Mauritius, via this treaty became the dominant channel for FDI in India. There is a serial of updates, regarding this treaty with India, during the past years

Tax Treaty Benefits
Benefits from tax treaties are only available for resident entities or persons. Therefore, the liability of tax for a resident entity in Mauritius will be inherent under Mauritian Law by virtue of its domicile or residence. Mauritius has a multitude of structures available including the GBC1 and GBC2, the Société and the Trust.

Consequently, a foreign entity or company, inclusive of the Global Business Company can take advantage or benefit from the tax treaty network. A Mauritian branch of a foreign entity can access the benefits derived from the tax treaties by meeting the conditions for residence. Furthermore, these related entities need to apply for a Tax Residence Certificate if they want to use the tax benefits under the treaties.

Unilateral Relief
It is interesting to note that a resident in Mauritius, deriving income from a foreign country, whereby there is no applicable tax treaty in place between Mauritius and that foreign country, will still receive a credit (relative to the foreign income) which can be used to offset any Mauritian income tax.

However, the credit is restricted on a source by source basis to the lesser of the 2 followings:
 

  1. The foreign tax paid on the income concerned;
  2. The Mauritian tax payable in the same income

 
Regarding foreign source dividends, there is no credit relief if granted for foreign corporate income tax borne on the profits out of which the dividends are paid (in result to the underlying tax)

For further information on DTA treaties please contact us
 and we shall be pleased to assist you.



due

Customer Due Diligence and enhanced due diligence (Know-Your-Client)

In line with our internal control and procedures and in conjunction with FSC code on prevention of money laundering and terrorist financing, we shall conduct a customer due diligence on our clients (both individuals and corporates). A KYC review will be done sporadically to satisfy all the requirements as per the prevailing legislation, codes and guidelines. The KYC documents required on individual shall be: -

  • A valid and certified passport copy;
  • Bank reference letters (dated less than 3 months);
  • Proof of residential address (dated less than 3 months); and
  • Curriculum vitae (up to date).

    KYC documents will also be required on corporate entities, listed as follows: -

  • Certified copy of the Certificate of Incorporation;
  • Certified copy of the M&A;
  • Certified copy of a Certificate of Incumbency (or registers);
  • Certified copy of a Certificate of Good Standing;
  • Certified copy of latest audited accounts;
  • Certified passport copies on the principals;
  • Proof of residential address on the principals