Mauritius GBC Category I

> Key Corporate Features
> General Information
> Company Information
> Compliance

Overview

Mauritius GBCI 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 GBCI companies may access Mauritius' network of 26 tax treaties. Neither capital gains nor withholding taxes are levied. Consequently, Mauritius GBCI companies are used by tax practitioners and businesses to structure investments into Mauritius' treaty partners, which include China, India, Indonesia, Luxembourg and Thailand.

Mauritius GBCI 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 to Government Authorities.

Normally it takes about three weeks to set up a Mauritius GBCI Company.

The minimum annual fees for administering a GBCI Company are US$ 6,000.

Key Corporate Features

General Information

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

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.

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.

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 $1 billion. The economy in 2000 grew by 8.9% and the Gross National Income per capita at market prices reached 101,948 rupees. Unemployment rate for 2000 is estimated at about 8.0% while inflation stood at 4.2%.

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.

The currency is the Mauritian Rupee.

There are no exchange controls.

The type of law is Common Law for corporate matters.

Company Information

The principal corporate legislation are The Companies Act 2001 and the Financial Services Development Act 2001.

A Company holding 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.

This is the procedure to incorporate: once name approval has been obtained, three copies of the 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.

Companies holding Category 1 Global Business License can undertake banking or insurance business or solicit funds from the public, if the relevant authorities have licensed them.

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

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

Shelf companies are not available.

The time to incorporate is about three to four weeks.

The following name restrictions apply: 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.

The permitted language of the name is English or French.

The following names or their derivativesrequire consent or a licence: 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.

The following suffixes 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.

There is disclosure of beneficial ownership to authorities, but not public.

Compliance

The usual authorised share capital is US$ 1 million with all of the shares having a par value. The minimum issued share capital is two shares of par value.

The following classes of shares are permitted: registered shares, preference shares, redeemable shares and shares with or without voting rights.

Companies pay a fixed annual licence fee of US$ 1.500 and a one-off licence application fee of US$ 500 to the Financial Services Commission.

On incorporation a one-time-fee of US$ 65 is payable to the Registrar of Companies and thereafter the annual fee payable to the Registrar of Companies is US$ 200.

Companies holding Category 1 Global Business License are resident in Mauritius for tax purposes.Companies holding Category 1 Global Business License are not subject to capital gains taxation and there are no withholding taxes on the payment of dividends, interest or royalties from Companies of the same status. 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

1. 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”).

2. 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.

3. Mauritius has no thin capitalisation rules

4. Interest and royalty payments paid by Companies holding Category 1 Global Business License are fully tax deductible in Mauritius

5. 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, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, UK and Zimbabwe.

Licence Fees US$ 1,500 to the FSC. US$ 200 to the Registrar of Companies.

Financial Statement Requirements Companies holding Category 1 Global Business License are required to prepare audited financial statements, which must be filed with the Financial Services Commission.

Company Secretary Companies holding Category 1 Global Business License require the appointment of a qualified company secretary, who must be resident in Mauritius.

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.

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