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Offshore: Mauritius

In recent years, the financial services sector in Mauritius has developed, including a stock exchange, to take advantage of Mauritius' location offshore India and Africa. 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 US$1 billion. 

There are are two types of Mauritius Companies:

 

  • Category 1 Global Business Company License (GBCI) and

  • Category 2 Global Business Company License (GBCII) and

thus offers flexibility to foreign investors to better suit the investment needs.

 

For instance, GBCI company has access to tax treaties with 28 countries and thus better suit and leveraged by international trading companies.

 

On the other hand, GBCII company is an offshore company and thus not liable to local taxes. Together they offer exceptional results in terms of international tax planning. 

 

ABOUT MAURITIUS

Mauritius is situated in the Indian Ocean approximately 800 km off the East Coast of Madagascar. The island, which is of volcanic origin, covers an area of 1,800 sq. km. The population of the Island is approximately 1,200,000 made up principally by people of European, African, Indian and Chinese origin. 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.

 

Mauritius is one of the few countries with a hybrid legal system based on English and French law. Mauritius currency is Mauritian Rupee. There is no exchange control in the country. Mauritius has tax treaties with 28 countries, and they can be combined with the offshore regime to give a good result, especially for trade and investment in India. 

Political Structure 

The Republic of Mauritius is an independent country within the Commonwealth with 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. 

Economy 

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. 

Mauritius has quite good land so that sugar became and remains the dominant crop; which still accounts for one third of exports. Apart from encouraging tourism, the Government has tried hard to create a manufacturing sector with a range of investment incentives, free trade zones and a free port. Garment manufacture has been a particular success.

 

More recently, a financial services sector has developed, including a stock exchange, to take advantage of Mauritius' location offshore India and Africa. 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 US$1 billion. The Government is enthusiastic about e-commerce and is building a 'Cyber City'. For most of the period, annual growth has been of the order of 5% to 6%. 

 

CATEGORY 1: 
GLOBAL BUSINESS COMPANY (GBCI) LICENSE

Mauritius GBCI Companies are resident in Mauritius and consequently subject to tax. Current tax rate is 15%. 

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. 

If correctly structured and managed Mauritius GBCI companies may access Mauritius' network of 28 tax treaties with Belgium, Botswana, China, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Russia, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, U.K, Zimbabwe. 

Mauritius GBCI Companies 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.

 

Consequently, Mauritius GBCI companies are used by tax practitioners and businesses to structure investments into Mauritius' treaty partners, which include China, India, Luxembourg and Thailand. 

GBCI companies must carry on their business in a currency other than the Mauritian Rupee. 

Authorised and Issued Share Capital 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. 

 

CATEGORY 1: 
(GBCI) LICENSE - continued

Classes of Shares Permitted

A GBCI company may be limited by shares, by guarantee, limited by both shares and guarantee or unlimited.

 

Only registered shares are allowed. Redeemable preference shares may be issued and no par value shares are permitted. Companies dedicated solely to investment purposes may also issue ordinary redeemable shares.

 

Shares may be subscribed by nominees but names of beneficial owners must be disclosed.

 

Shareholders may be both individuals and bodies corporate.

 

Directors
A minimum of one Director who must be a natural person. However, in order to access Mauritius' network of 28 tax treaties a minimum of two local directors is required. 

Company Secretary 
A GBCI company must appoint a qualified secretary who need not be resident in Mauritius. Secretaries may be individual or corporate. 

Registered Office
A GBCI company must at all times have a registered office in Mauritius. 

Annual Return and Accounting Requirements 
A GBCI company are required to file its audited financial statements with the Financial Services Commission every year. The shareholders must hold a General Meeting annually. It is technically not necessary that this be in Mauritius, but in practice companies who wish to avail themselves of treaty benefits should hold this meeting in Mauritius. 

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

Public Access to company information
Documents on record at the Registrar, in respect of a private company holding a Category 1 Global Business Licence may only be inspected by a shareholder of the Company and are NOT open to public inspection. This means that even though registers of Shareholders and Directors must be filed with the Registrar, they are not matters of public record and cannot be retrieved by a company search at the Companies Registry. 

Licence Fee
On incorporation, a one-off fee of US$ 200 is payable to the Registrar of Companies and a one-off licence application fee of US$500 to the Financial Services Commission. 

Thereafter on annual basis, Companies pay a fixed annual licence fee of US$ 1,500 to the Registrar of Companies and US$200 to the Financial Services Commission. 

 

CATEGORY 2:
GLOBAL BUSINESS COMPANY (GBCII)​ LICENSE

Companies holding a Category 2 Global Business License are governed by the provisions of the Companies Act 2001 and by the Financial Services Development Act 2001. They are often used for trading and investment. GBCII companies are not resident for tax purposes and consequently does not pay any tax on its world-wide profits to the Republic of Mauritius authorities. GBCII companies do not have access to Mauritius' tax treaty network. 

 

CATEGORY 2: 
(GBCII) LICENSE - continued

Authorised and Issued Share Capital
There is no minimum capital requirement; likewise there is no statutory limit on capital. 

Classes of Shares Permitted

  • A GBCII company may be limited by shares, by guarantee, limited by both shares and guarantee or unlimited.

  • Only registered shares are allowed.

  • Redeemable preference shares may be issued and no par value shares are permitted. Companies dedicated solely to investment purposes may also issue ordinary redeemable shares.

  • Shares may be subscribed by nominees but names of beneficial owners must be disclosed.

  • Shareholders may be both individuals and bodies corporate.


Directors
Minimum one, who may be natural person or a body corporate, who need not be ordinarily resident in Mauritius. 

Company Secretary
Optional. 

Registered Office
A GBCII company must at all times have a registered office in Mauritius. 

Restrictions on Trading 
A GBCII Company may not:

  • Carry on business with residents in Mauritius

  • Carry on any dealings in Mauritian currency

  • Own any interest in immovable property situated in Mauritius

  • Hold any shares, debentures or other interest in any domestic company or other Mauritius - entities other than in an Global Business Company and

  • Have as beneficial owner of its shares a person resident in Mauritius.


In addition, A GBCII Company can be involved in any business except that of:

  • Raising capital from the public

  • Carrying on any banking, insurance or reinsurance business

  • Carrying on the business of providing the registered office or of providing nominee services for - companies or of providing any trusteeship services and

  • Carrying on the business of holding or managing a collective investment scheme as a professional functionary.

 

Financial Statement Requirements
GBCII companies are required to maintain financial statements to reflect their financial position with the Registered Agent but are not required to file audited accounts with the authorities. 

Public Access to company information 
Documents on record at the Registrar, in respect of a private company holding a Category 2 Global Business Licence may only be inspected by a shareholder of the Company and are NOT open to public inspection. This means that even though registers of Shareholders and Directors must be filed with the Registrar, they are not matters of public record and cannot be retrieved by a company search at the Companies Registry. 

Licence Fee
On annual basis, Companies pay a fixed annual licence fee of US$65 to the Registrar of Companies and US$135 to the Financial Services Commission. 

 

TWO TYPES OF MAURITIUS COMPANIES: 

The following is a summary of the two types of Mauritius Companies based on the requirements:

 

  • Type of entity

  • Share capital or equivalent

  • Directors or Managers

  • Members

  • Company Secretary

  • Accounts

  • Other

 

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