In the last decade, Mauritius has enjoyed unprecedented socio-economic development with a substantial economic growth averaging six percent. This is the fruit of careful economic governance by successive administrations backed up by a sound financial infrastructure with a reputation for reliability, efficiency and probity.

The export led growth strategy has significantly changed the economic structure of Mauritius with the manufacturing and service sectors now accounting for roughly two thirds of GDP. Total foreign trade has more than doubled in the past ten years and so has the level of foreign exchange reserves.

The sound regulatory practises and conducive business environment which have emerged has earned Mauritius a reputation as a reliable jurisdiction as evidenced by our growing network of double taxation treaties based on the OECD model: our treaty partners include Luxembourg, France, United Kingdom, China, India, Singapore and South Africa amongst many others. In short, Mauritius has succeeded in demarcating itself as a centre offering quality service and security as a useful gateway for investments in the region and beyond. Investor confidence in our financial services is evidenced by the growing number of business enterprises registered in Mauritius. With a strong, experienced global financial service sector, we are now poised to move forward.

The government recognises that the world is changing fast and there are many challenges and opportunities presented by the dramatic expansion of E-commerce, the IT revolution and the closer international cooperation on tax abuse, money laundering etc.

Hence, the decision to update existing legislation and introduce new laws where appropriate, encompassing taxation, money laundering, financial service regulatory issues, trust and company law. At the same time, existing governmental agencies would be overhauled to ensure that the regulation and supervision of non banking financial services are fast, efficient and effective. All this has been done.

Freeport Incentives

The Mauritius Freeport provides an extensive package of incentives, namely:

• No foreign exchange controls and free repatriation of profits;
• Distributions in terms of dividends are exempt;
• Freeport companies are exempt from income tax;
• Income of expatriate staff is subject to half the personal income tax rates (for the first 4 years);
• Goods imported into Freeport zones are exempt form customs duties and import levies;
• Goods for re-export are subject to reduced warehousing and port handling charges;
• 100% foreign ownership permitted;
• Authorisation to sell their products on the local market to Mauritian residents, subject to the necessary approval;

The advantage of Mauritius as a Freeport is that it is strategically located to the Asian, Middle Eastern and African markets and has a favourable direct tax regime and double tax avoidance agreements with various countries.

Mauritius is a member of Southern African Development Community (SADC), the Indian Ocean Rim Association for Regional Co-operation (IOR ARC) and the Common Market for Eastern and Southern Africa (COMESA).

It has a excellent airport network and shipping connections.

.: Approved Freeport Activities

The Freeport Act 1992, as amended by subsequent Government Regulations, permits a number of approved activities in the Freeport zone, including the following:

• Minor processing and simple assembly
• Labelling, packing, breaking bulk and repacking
• Sorting, grading, cleaning and mixing
• Express courier and Mail order services
• Export-oriented airport and port based services
• Quality control services
  

Mauritius Trading Issues

 

 

 

 

 

Global Business Company (GBC1)	A well regulated company suited to high profile offshore business or investment purposes - offering low tax rates and access to tax treaties (see details below)
Global Business Company (GBC2)	A flexible, tax free company providing for greater confidentiality - ideal for trading, holding and managing private assets. Easier to use but would limit trading in terms of this entity trading with Mauritians. Although very flexible, and considering this would be a shell company per se, consensus seems to be a GBC1 may be more suitable. (See details below)
Protected Cell Company (PCC)	An extra-ordinary type company in which cells are created in the company's capital for the purpose of segregating assets within that cell from claims related to other assets. It is the ideal structure to use for Captive Insurance or Investment Fund purposes.

 

GBC 1

In terms of the Financial Services Development Act 2001, a GBC1 is defined as a company engaged in qualified global business and which is carried on from within Mauritius with persons all of whom are resident outside Mauritius and which is conducted in a currency other than the Mauritian Rupee.

A GBC1 may be locally incorporated or may be registered as a branch of a foreign company. The incorporation of a GBC1 must be arranged through a licensed Offshore Management Company, such as Inter-Ocean Management Limited, who shall need to first obtain the approval from the Financial Services Commission (FSC).

.: Taxation

• No withholding tax
• No capital gains tax
• 15% corporate income tax rate if incorporated after 1st June 1998
• Reduction through tax credits to an effective rate of 1.5%
• Access to double taxation avoidance treaties between Mauritius and 26 countries worldwide with a further treaties awaiting ratification

.: Capital and Shares

• Minimum Stated Capital of 1 share
• Only registered shares allowed
• Par value shares optional
• Redeemable preference shares may be issued

.: Shareholders

• At least 1 shareholder is required
• Shareholders may be individual or corporate
• Shares may be subscribed by nominees, but names of the beneficial owners must be disclosed
• Shareholders must hold a General Meeting annually

.: Directors

• At least 1 director required at all times
• 1 director must be a Mauritian resident
• Inter-Ocean Management Limited can supply directors where necessary
• Board meetings do not have to be held in Mauritius. However to benefit from the double taxation avoidance treaties the company must have two Mauritian resident directors and board meetings must be held on the island.
• Teleconference meeting of directors is allowed

.: Administration and Registration

• Audited annual accounts to be filed with the FSC
• Annual returns are not required

.: Mobility

• A foreign company may transfer its seat to Mauritius and continue as a GBC1
• An GBC1 may transfer its statutory seat to another jurisdiction

.: Requirements

• A GBC1 must at all times have a qualified Company Secretary (either corporate or individual) who is a resident of Mauritius
• A GBC1 must at all times have a registered office where all statutory books and records are kept

Only a licensed and qualified Offshore Management Company (OMC), such as Inter-Ocean Management Limited, can act as company secretary and provide the registered office.

.: Incorporation

The application for incorporation of a GBC1 needs to be submitted by an OMC and is subject to prior approval of the FSC. Once the OMC has received the approval of the company name all the application forms and documents are required to be submitted to the FSC and Registrar of Companies. Once the application has been approved a Letter of Intent is issued, stating the proposed conditions under which the GBC1 may operate. On acceptance of these conditions the incorporation will be finalised and a Global Business License Offshore Certificate will be issued. Incorporation takes approximately 14 days. Complete disclosure of beneficial ownership is required at incorporation.

.: Tax Residency Certificate

In order for a GBC1 to benefit from the double taxation avoidance treaties, it must be liable to taxation in Mauritius and be in possession of a Tax Residency Certificate. The application for a Tax Residency Certificate takes approximately 3 weeks. To qualify therefore the company needs to fulfil the "place of management" test as follows:

• The company has at least two Mauritian resident directors
• The company holds its board meetings in Mauritius, however telephonic participation by non-Mauritian directors is permitted provided that the meeting is chaired and initiated in Mauritius
• The company has a local bank account through which investment funds flow
• The company has a qualified Company Secretary
• The Company has a Mauritian auditor
• Accounting records must be maintained in Mauritius in accordance with the Companies Act 2001 and international accounting standards

.: The Constitution

It is no longer necessary for a GBC1 to have a Memorandum and Articles of Association. In place thereof a GBC1 may or may not choose to have a Constitution. Where no Constitution is adopted the Company will be regulated by the provisions laid out in the Companies Act 2001. We recommend that a simplified Constitution be adopted. Should the client prefer a full Constitution (similar to a Memorandum and Articles of Association) we will gladly provide them therewith.

.: Confidentiality

Confidentiality is strictly observed in terms of the FSD Act. No person or body is authorised to disclose information or present documentation to any court, tribunal, committee of enquiry or other authority in Mauritius unless ordered to do so by a Court of Law on application by the Director of Public Prosecutions for enquiry into the trafficking of narcotics and dangerous drugs, arms trafficking or money laundering as defined under existing legislation. On application to the FSC for incorporation total disclosure of beneficial ownership and company business needs to be made.

.: Qualified Global Business Activities

A GBC1 may only conduct activities classified as Qualified Global Activities in the FSD Act. Such activities include:

• Aircraft financing and leasing Assets management
• Consultancy services Employment services
• Financial services Funds management
• Information services Communication technology services
• Insurance/Pension fund Licensing and franchising
• Logistics and or marketing Operational headquarters
• Shipping and ship management Trading
  

 

GBC 2

GBC2s are regulated by both the Companies Act 2001and the Financial Services Development (FSD) Act 2001. The GBC2 is a special company in that it is totally exempt from taxes in Mauritius, provided it does not conduct business with residents in Mauritius or have a resident of Mauritius as the beneficial owner of its shares. The tax-exempt status means that a GBC2 cannot benefit from the extensive Mauritius double taxation avoidance treaty network. The only costs payable to the government of Mauritius by a GBC2 are the annual licence fees of US$135.00 and the annual registration fees of USD65.00. A GBC2 is most suitable for trading purposes, invoicing, international contracts or the holding of assets.

A GBC2 may either be locally incorporated or registered as a branch of a foreign company. The incorporation of a GBC2 must be arranged through a licensed Offshore Management Company, such as Inter-Ocean Management Limited, who shall need to first obtain the approval from the Financial Services Commission (FSC).

The GBC2 has the following features:

.: Confidentiality

Confidentiality is strictly observed in terms of the FSD Act. No person or body is authorised to disclose information or present documentation to any court, tribunal, committee of enquiry or other authority in Mauritius unless ordered to do so by a Court of Law on application by the Director of Public Prosecutions for enquiry into the trafficking of narcotics and dangerous drugs, arms trafficking or money laundering as defined under existing legislation. While shareholder details are required to be submitted to the FSC and the Registrar of Companies, ultimate beneficial ownership does not need to be disclosed. Through the use of Inter-Ocean Management Limited nominee companies the identity of beneficial owners can be completely concealed.

.: Taxation

• No income tax
• No withholding tax
• No capital gains tax
• Fixed annual licence fees
• No exchange control requirements
• No access to double taxation avoidance treaties

.: Capital and Shares

• No minimum capital requirement but at least one share must be issued and paid up
• Registered shares and a variety of shares such as preferred, redeemable, and fractional are allowed
• Shares may be issued with or without par value
• Redeemable preference shares may be issued
• A GBC2 may also acquire, redeem, reissue or purchase its own shares
• Shares and capital may be denominated in any convertible currency

.: Shareholder

• At least one shareholder required at all times
• Shareholders may be individual or corporate
• Shares may be subscribed by nominees
• Bearer shares are not permitted

.: Directors

• Only one director required. He does not need to be Mauritian resident
• The shareholder may be a corporate entity
• Nominee shareholders allowed
• Powers of directors may be limited by a unanimous shareholders agreement.
• Board meetings do not have to be held in Mauritius and can be held by telephone or other electronic means. Members or directors can vote by proxy
• No annual general meeting of shareholders is required by law and shareholders meetings are optional
• Shareholders, directors and secretaries of a GBC2 are registered with the Registrar of Companies

.: Administration, Registration & Requirements

• Annual accounts do not have to be prepared, filed or published
• Must be administered by an Offshore Management Company
• May operate an offshore bank account in Mauritius but not a domestic account
• Application requirements are simple and incorporation takes 2 - 5 days
• A GBC2 must at all times have a registered office and a registered agent in Mauritius where all statutory books and records are kept
• No Company Secretary required
• A GBC1 allowed as a subsidiary
• Freeport licence not allowed
• "Off the shelf" companies available

Only a licensed and qualified Offshore Management Company, such as Inter-Ocean Management Limited, can act as registered agent and provide the registered office.

.: Mobility

• A foreign company may transfer its seat to Mauritius and continue as a GBC2 provided this is allowed under the laws of the country in which it was originally incorporated.
• A GBC2 may transfer its statutory seat to another jurisdiction
• A GBC2 can be converted to continue as a GBC1 in Mauritius under the Companies Act 2001.

.: Incorporation

• A GBC2 may be set up either by incorporation or by way of continuation of an existing company
• The completion of an Inter-Ocean Management Limited Data Pack is required
• Brief business plan is required
• The Constitution must be prepared and signed by the registered applicant
• Reserve the company name at the Registrar of Companies
• Issued shares not required at incorporation
• Inter-Ocean Management Limited submits the above information on behalf of the client

.: The Constitution

It is no longer necessary for a GBC2 to have a Memorandum and Articles of Association. In place thereof a GBC2 may or may not choose to have a Constitution. Where no Constitution is adopted the Company will simply be regulated by the provisions laid out in the Companies Act 2001. We recommend that a simplified Constitution be adopted. Should the client prefer a full Constitution (similar to a Memorandum and Articles of Association) we will gladly provide them therewith.

 

COMPARISON OF BENEFITS FOR A GBC1 AND A GBC2

Category 1 Global Business License Company (GBC1)

One of the most attractive features of the GBC1 is that, by paying a minimal amount of tax in Mauritius, a GBC1 has access to the expansive network of favourable tax treaties that Mauritius has concluded with other countries. Consequently, investors in these countries can substantially reduce their overall tax burden. The tax rate is 15% with the option of reducing this to 3% through an 80% credit for foreign tax paid. A GBC1 is the ideal vehicle for a large-scale international trading operation or for investment purposes.

Category 2 Global Business License Company (GBC2)

A GBC2 is completely free of tax and thus cannot benefit from any tax treaties, however it is much more flexible and is not required to submit audited accounts. It is ideal for trading purposes or for holding and managing private assets. The GBC2 has the major benefit of being highly confidential. One can further increase this confidentiality by making use of nominee shareholders and directors provided by Inter-Ocean.

	GBC1	GBC2
Taxation	15% reducing to 3%	Exempt
Confidentiality	Good - though complete disclosure of beneficial owner- ship required at incorporation	High
Audited accounts	Yes required	Not require
Tax credit available	Yes	No
Access to tax treaties	Yes	No
Withholding tax on dividends, interest or royalties	None	None
Annual licence fee	US$ 1 500.00	US$135
Annual registration fee	US$67 - US$200	US$65
Processing fee/incorporation fee	US$ 500.00	None
Withholding tax on dividends, interest or royalties	No	No
Duty concessions on furniture, office equipment /motor cars	Yes	No
Incorporation time	2 weeks	2-5 days

 

.: COMPARISON OF STATUTORY REQUIREMENTS FOR A GBC1 AND GBC2

	GBC1	GBC2
Minimum number of shareholders	1	1
Minimum number of shares	1	1
Minimum share capital	USD1	USD1
Corporate shareholder	Allowed	Allowed
Bearer Shares	Not Allowed	Not Allowed
Minimum number of directors	1	1
Resident directors	1 is required	Not required
Annual General Meeting	Required	Not required

 

 

 

 

 

In the last decade, Mauritius has enjoyed unprecedented socio-economic development with a substantial economic growth averaging six percent. This is the fruit of careful economic governance by successive administrations backed up by a sound financial infrastructure with a reputation for reliability, efficiency and probity.

The export led growth strategy has significantly changed the economic structure of Mauritius with the manufacturing and service sectors now accounting for roughly two thirds of GDP. Total foreign trade has more than doubled in the past ten years and so has the level of foreign exchange reserves.

Freeport Incentives

The Mauritius Freeport provides an extensive package of incentives, namely:

• No foreign exchange controls and free repatriation of profits;
• Distributions in terms of dividends are exempt;
• Freeport companies are exempt from income tax;
• Income of expatriate staff is subject to half the personal income tax rates (for the first 4 years);
• Goods imported into Freeport zones are exempt form customs duties and import levies;
• Goods for re-export are subject to reduced warehousing and port handling charges;
• 100% foreign ownership permitted;
• Authorisation to sell their products on the local market to Mauritian residents, subject to the necessary approval;

The advantage of Mauritius as a Freeport is that it is strategically located to the Asian, Middle Eastern and African markets and has a favourable direct tax regime and double tax avoidance agreements with various countries.

Mauritius is a member of Southern African Development Community (SADC), the Indian Ocean Rim Association for Regional Co-operation (IOR ARC) and the Common Market for Eastern and Southern Africa (COMESA).

It has a excellent airport network and shipping connections.

.: Approved Freeport Activities

The Freeport Act 1992, as amended by subsequent Government Regulations, permits a number of approved activities in the Freeport zone, including the following:

• Minor processing and simple assembly
• Labelling, packing, breaking bulk and repacking
• Sorting, grading, cleaning and mixing
• Express courier and Mail order services
• Export-oriented airport and port based services
• Quality control services