Mauritius Company Formation
Mauritius: An Outstanding Jurisdiction
The main Island of Mauritius is located about 2,000km off the southeast coast of the African continent. Financial regulation is based on international best practice standards in terms of legal framework and supervision. The Organisation for Economic Co-operation and Development's (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes certified Mauritius as "fully compliant" under its enhanced peer review process.
In addition to being a co-operative and transparent jurisdiction, Mauritian Government policy massively encourages foreign and domestic investment. There is no withholding tax on dividends, interest and royalties. There is no capital gains tax, estate duty, inheritance tax or gift tax. Mauritius has a flat company tax rate of 15%.
The island also benefits from being in a time-zone that facilitates business in the West and the East.
Mauritius currently has 46 tax treaties in place, with 6 treaties awaiting ratification, 5 further treaties awaiting signature, and 20 additional treaties currently being negotiated.
The Stock Exchange of Mauritius (SEM) is one of the leading platforms in Africa and also a member of a number of international bodies, including the World Federation of Exchanges, South Asian Federation of Exchanges and African Securities Exchanges Association and Committee of SADC Stock Exchanges.
By encouraging an investor friendly environment, and due to its political and economic stability, Mauritius has re-invented itself as a global hub for investment into Africa, and corporate structuring for multi-national businesses with worldwide assets. It has an effective regulatory framework, excellent infrastructure, and a transparent Financial Services Commission, which function alongside a financially secure banking industry.
In the World Bank's 2018 “Ease of Doing Business” rankings, Mauritius holds the 20th position out of 190 economies globally.
There are many benefits to setting up in Mauritius. In July 2018 the Government introduced new measures transforming the financial sector by revamping the old GBC1 (Global Business Category 1) and GBC2 (Global Business Category 2) regime. GBC1 Companies were re-named Global Business Licenses (GBL) GBC2 Companies were abolished with effect from 1st January 2019 and replaced with a new regime known as the "Authorised Company" or "Mauritius Authorised Company" (MAC). For existing company owners, a transitional period was designated as follows:
GBC1 License issued on or before 16th October 2017: Grandfathered up to 30th June 2021 when the GBC1 License will lapse.
GBC1 License issued after 16th October 2017: Grandfathered up to 31st December 2018 when the GBC1 licence will lapse.
GBC2 License issued on or before 16th October 2017: Grandfathered up to 30th June 2021 when the GBC2 License will lapse.
GBC2 License issued after 16th October 2017: Grandfathered up to 31st December 2018 when the GBC2 licence will lapse.
For everything you need to know about GBL's and MAC's, please see below.
Mauritius Authorised Company (MAC)
Any company that proposes to conduct its business principally outside of Mauritius, with the majority of shares being held by individuals or entities not resident in Mauritius, with an effective place of management and control outside of Mauritius must apply for incorporation as a Mauritius Authorised Company. A MAC is treated as non-resident for tax purposes and required to file an annual return of income to the Mauritius Revenue Authority within six months of its year end. No tax payable on non-Mauritian source income otherwise 15% on local income, except that interest income on deposits held with local banks is exempt. The Registered Agent is responsible for providing all services that a MAC requires within Mauritius including filing tax returns [consisting of annual financial summary], maintaining statutory records and undertaking adequate measures to prevent money laundering and terrorism financing activities. MAC’s are commonly used for Investment Holding, Property Holding (Real Estate or otherwise), Wealth Protection, E-commerce, International Trade, Trade Invoicing, Intellectual Property Ownership, and Consultancy Services. A detailed business plan is required at time of incorporation. MAC’s do not have access to Double Tax Avoidance Treaties and cannot engage in financial services activities. MAC’s are flexible entities and have a number of advantages.
No publicly accessible records on beneficial owners
Minimum of one shareholder required [no bearer shares]
Shares can be held in a “nominee” arrangement
No local shareholder / director requirements
Office space is leased within DIFC
Corporate Shareholders and Directors permitted
No stamp duties on transfer of shares
No requirement for Company Secretary
Exempt from Mauritius corporation tax (on non-source income)
No Capital Gains / withholding tax
Board meetings may be held anywhere outside of Mauritius
costs & Timeline
Global Business License (GBL)
GBL companies are incorporated under the Companies Act 2001 and licensed by the Mauritius Financial Services Commission. They are resident in Mauritius for taxation purposes and have access to Mauritius' double taxation avoidance treaty network, provided they hold a Tax Residence Certificate issued by the Mauritius Revenue Authority. In order for a GBL License to be issued, the Mauritius Financial Services Commission (FSC) will examine a set of criteria to determine whether the company has "substance" in Mauritius by basing its management and control in Mauritius at all times. This means that the GBL must carry out its core income generating activities in or from Mauritius by:
• Employing, either directly or indirectly, a reasonable number of suitably qualified individuals to carry out the core activities. This is covered by one or more dedicated corporate administrators to administer the company.
• Having a minimum level of expenditure in Mauritius that is proportionate to the level of activity. For a non-financial company this ranges from US$12,000 to US$15,000 and for financial companies between US$30,000 to US$100,000 annually.
In addition, each GBL must meet the following requirements:
• Have a minimum of two Mauritian resident individuals as Directors of sufficient calibre and professionalism.
• Have at least two local Mauritian resident Directors in attendance at each meeting of Directors. Corporate directors are not permitted.
• Director meetings must be held in Mauritius.
• Keep and maintain accounting records at the registered office in Mauritius.
• Prepare and file (audited) annual statutory financial statements.
• Comply with "Economic Substance Requirements".
As of January 2019, the deemed Foreign Tax Credit Regime available to GBC1 companies has been abolished. The standard rate of tax on (net) worldwide income is 15%. GBL’s engaged in export of goods are liable to a tax charge of 3% on attributable income based on a formula. Foreign income taxed at source receives an appropriate tax credit. GBL’s qualify for an 80% exemption on specific foreign source income [subject to meeting economic substance requirements] as follows:
• Foreign dividend not allowed as a deduction in source country.
• Profit attributable to a permanent establishment of a resident company in a foreign country.
• Foreign source interest income.
• Income derived from ship and aircraft leasing.
• Foreign source income derived by a Collective Investment Scheme (“CIS”), Closed End Funds, CIS Manager, CIS Administrator.
• Foreign source income derived from an asset manager or investment advisor licensed or approved by FSC.
• No foreign tax credit permitted on foreign source income if 80% exemption already claimed.
Access to Double Taxation Avoidance Treaties
Excellent vehicles for worldwide investment
Shares can be held in a “nominee” arrangement
Minimum two local Mauritian resident directors needed
Corporate Directors are not permitted
Must have meet "substance" requirements in Mauritius
Considered Tax Resident in Mauritius- standard tax rate is a flat 15%
Must maintain a bank account in Mauritius
No publicly accessible records
Ideal for Fund Management
Ideal for holding Intellectual Property and Trademarks
costs & Timeline
The cost of incorporating a GBL Company is dependent on the structure, directors, shareholders and proposed activity. We will need a business plan to asess the best way forward. Incorporation of a GBL company takes approximately 2 weeks to form.
Additional services such as nominee shareholders, professional directors, company secretary and general administration services etc. are charged separately. Assistance with opening a bank account costs US$500. We also offer an accounting service to maintain accounting records and prepare financial statements for filing at renewal from US$1,000. Please ask for more details.
More options that may interest you...
If you would like to explore more company formation options and the other services that Alpha Management can provide, please have a look at the links below.
Offshore & Free-Zone Company Formation
FINANCIAL OFFICER & Compliance services
accounting and other services
Interested in forming a Mauritius company?
It can be confusing to know where to start when it comes to setting up in Mauritius. Each client has different goals and requirements depending on their situation. Alpha Management will assess what is best for you and be able to recommend what type of company and which jurisdiction suits your particular criteria. We will present all the options available whilst bearing in mind any budget limitations you may have. If you would like to discuss Mauritian company formation, please contact us here.
Get in touch with Alpha Management, and we can discuss what you are looking for. We will then recommend a jurisdiction and let you know what compliance documents we need to collect.