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Mauritius

Global Business Company (Private company limited by shares)

Mauritius is a politically stable jurisdiction and the largest international financial and business hub in the Indian Ocean region with a strong liberal economy, a reputable banking system and a wide offer of qualified professional services.

Its pro-business and flexible regulatory framework provides reliability and security for the incorporation of international companies.

Under the Companies Act, 2001 and the Financial Service Act 2007, companies may apply for a Global Business License (GBL) that allows them to carry out Business outside the jurisdiction and benefit from an advantageous tax regime.

Companies holding the Global Business License may only undertake activities set out in the Business Plan filed with the Financial Services Commission (FSC) at the time of application for a license or as amended and notified to the FSC.

GBL companies may conduct financial services activities such as banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship business provision if the relevant license is obtained.

GBL companies may benefit from an advantageous tax regime and a broad network of double taxation treaties.

The Finance (Miscellaneous Provisions) Act 2018 has brought new enhanced substance requirements for Global Business Corporations (previously GBC1 companies).

Licensing conditions require GBC companies to employ directly or indirectly, a reasonable number of suitably qualified persons to carry out the core income-generating activities, and have a minimum level of expenditures in Mauritius proportional to the level of its activities.

For example, investment holdings will be required to have annual expenditures in Mauritius of at least USD 12,000, whereas non-investment holdings will require USD 15,000 of expenditures and 1 employee if annual turnover is less than USD 100 million or 2 employees if annual turnover is more than USD 100 million.

Other activities such as fund management will require annual expenditures of USD 30,000 and from 1 to 3 employees in Mauritius depending on the amount of assets under management. Financial Institutions such as Insurance, Leasing or Credit finance, intermediaries such as investment advisors, insurance brokers and agents, and other financial services will also be required to spend a certain amount per year in Mauritius and have from 1 to 3 employees depending on their level of activities.

Global Business Companies holding and exploiting IP rights will be required to prove that they have incurred the appropriate research and development expenditure to meet the substance requirements.

With respect to the taxation of GBL companies – the previous Deemed Foreign Tax Credit (DFTC) regime has been abolished. Previously, GBC1 companies were eligible for a unilateral foreign 80% tax credit on all types of income, reducing the effective income tax rate to 3%. Now, GBL companies are subject to local taxes at a rate of 15%.

However, an 80% Partial Exemption Regime on certain income streams will still be available – as long as the above-mentioned substance requirements are met.

Income streams available for an 80% partial exemption (3% effective tax rate) include foreign dividends (subject to such an amount not being treated as an allowable deduction in source country), interest income and income derived by companies engaged in ship and aircraft leasing.

 

To qualify for a Global Business License, a company must meet at least one of the following criteria:

  • the corporation has or shall have office premises in Mauritius; or
  • the corporation employs or shall employ on a full-time basis at the administrative/technical level, at least one person who shall be resident in Mauritius; or
  • the corporation's constitution contains a clause whereby all disputes arising out of the constitution shall be resolved by way of arbitration in Mauritius;
  • the corporation holds or is expected to hold within the next 12 months, assets (excluding cash held in a bank account or shares/interests in another corporation holding a Global Business License) which are worth at least USD 100,000 in Mauritius;
  • the corporation's shares are listed on a securities exchange licensed by the Commission; or
  • it has or is expected to have a yearly expenditure in Mauritius which can be reasonably expected from any similar corporation which is controlled and managed from Mauritius.

In Mauritius, companies may be structured as protected cell companies.

Protected cellular companies are entities made up of a core and several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.

Although the cells of a protected cell company do not have a separate legal personality, assets and liabilities of each cell must be kept separated and separately identifiable from the assets and liabilities of the protected cell company (core) and of each of the others cell.

Cellular companies have both core capital and cellular capital, which is the capital invested in individual cells.

Creditors of a cell are unable to seek recourse from the assets of any of other cells or of the core. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.

In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.

All in all, GBL companies are excellent vehicles for investment, investment holding, and fund management purposes. They benefit from an advantageous tax regime with an effective tax rate that may be as little as 3%, access to a broad list of tax treaties and no withholding taxes on dividends and royalties, as well as an exemption on capital gains and tax credits on dividends received.

Taxes

Corporate income tax – The previous Deemed Foreign Tax Credit (DFTC) regime has been abolished. Previously, GBC1 companies were eligible for a unilateral foreign 80% tax credit on all types of income, reducing the effective income tax rate to 3%. Now, GBL companies are subject to local taxes at a rate of 15%.

However, an 80% Partial Exemption Regime on certain income streams will still be available – as long as economic substance requirements are met.

Income streams available for an 80% partial exemption (3% effective tax rate) include foreign dividends (subject to such an amount not being treated as an allowable deduction in source country), interest income and income derived by companies engaged in ship and aircraft leasing.

Personal income tax – The main tax on resident individuals is an income tax at a 15% rate. To be a tax resident an individual must spend more than 6 months in the country in a year.

However, GBL companies' expat employees are subject to a reduced personal income tax of 7.5%. In addition, each GBL company is allowed 2 expatriated employees to import cars and household goods duty-free.

Other taxes - In Mauritius, there is no capital gains tax, real property tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax. There is VAT at 15% levied on the supply of goods and provision of services.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 15% Offshore Income Tax Rate
  • 15% Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 0 Losses carryforward (years)
  • FIFO Inventory methods permitted
  • 4% Social Security Employee
  • 10% Social Security Employer
  • 15% Personal Income Tax Rate
  • 15% VAT Rate
  • 56 Tax Treaties

Country details

Mauritius
MUR
Port Louis
Africa
e n - M U , b h o , f r
1294104

The Republic of Mauritius is a sovereign island country located in the southwest of the Indian Ocean, about 900 kilometers from Toamasina, a town on the easternmost coast of Madagascar and approximately 3800 kilometers southwest of Cape Comorin on the southern tip from India.

In addition to the island of Mauritius, the republic includes the islands St. Brandon, Rodrigues and the Agalega Islands. Mauritius forms part of the Mascarene Islands, along with the French island of Reunion, about 170 kilometers to the southwest.

Mauritius is inhabited by about 1.4 million people. Its capital and the most populated city is Port Louis.

The people of Mauritius are multiethnic, multi-religious, multicultural and multilingual. The Mauritian Creole, French, English, and Bhojpuri are its vernacular languages, plus other 9 languages spoken in the territory.

Its official currency is the Mauritian rupee (MUR).

Mauritius is highly ranked for democracy and for economic and political freedom.

The Head of State of Mauritius is the President, who is elected for a period of five years by the National Assembly, the Mauritian unicameral parliament.

The National Assembly has 62 members elected by direct and popular suffrage and comprises between 4 and 8 members elected by minorities representing ethnic minorities, depending on the election results. The government is headed by the prime minister and a council of ministers.

Since its independence from the British in 1968, Mauritius has seen a dazzling evolution.

The island went from being a low-income country with per capita income, in which the economy was based on agriculture, to be a country with the status of an emerging and constantly developing country with intermediate incomes and a diversified economy based on a growing industrial, financial and tourism sector.

During this period of economic growth, the country grew at a rate of 5 to 6% per year. This result translates into a significant improvement in the quality of life and a significant increase in life expectancy, a decline in infant mortality and a great infrastructural development.

Regarding the primary sector, sugar cane accounts for 90% of crops and accounts for 25% of exports. Livestock in Mauritius mainly comprises porcine and caprine, and fishing is also an important source of income.

Its main industrial sectors are the textile, information and communications technology and seafood processing, as well as petrochemical and chemical industry in Port Louis.

Tourism is its more prominent sector and a significant source of its foreign exchange revenues. Mauritius is a growing tourism destination for its natural beauty and man-made attractions, multi-ethnic and cultural diversity of the population, tropical climate, beautiful beaches, and water sports.

The financial sector is a major economic pillar on Mauritius economy, with more than 10,000 offshore companies incorporated and a comprehensive offer of banking, insurance and reinsurance services, captive insurance managers, trading companies, ship owners or managers, fund managers and international corporation services.

Tax treaties

Country Type Date Signed
Singapore DTC  1995-08-19
Swaziland DTC  1994-06-29
Kuwait DTC  1997-03-24
Malta DTC  2014-10-15
China DTC  1994-08-01
Mozambique DTC  1997-02-14
Gabon DTC  2013-07-18
Senegal DTC  2002-04-17
Thailand DTC  1997-10-01
Australia TIEA 2015-03-10
Malawi DTC  2012-08-18
Croatia DTC  2002-09-06
Seychelles DTC  2012-08-18
Oman DTC  1998-03-30
Barbados DTC  2004-09-28
Zambia DTC  2012-08-18
Qatar DTC  2008-07-28
Kenya DTC  2012-05-07
Congo, Republic of the DTC  2010-12-20
Germany DTC  2011-10-07
India DTC  1982-08-24
Nigeria DTC  2012-08-10
Monaco DTC  2013-04-13
Luxembourg DTC  1995-02-15
Lesotho DTC  2012-08-18
Tunisia DTC  2008-02-12
Malaysia DTC  1992-08-23
Denmark TIEA 2011-12-01
Belgium DTC  1995-07-04
United Kingdom DTC  1981-02-11
Faroe Islands TIEA 2011-12-01
United Arab Emirates DTC  2006-09-18
Botswana DTC  1995-09-26
Uganda DTC  2003-09-19
Tanzania DTC  2012-08-18
Madagascar DTC  1994-08-30
Bangladesh DTC  2009-12-21
Finland TIEA 2011-12-01
Rwanda DTC  2001-07-30
Guernsey DTC  2013-02-06
United States TIEA 2013-12-27
Congo, Democratic Republic of the DTC  2012-08-18
Norway TIEA 2011-12-01
Italy DTC  1990-03-09
Namibia DTC  1995-03-04
France DTC  1980-12-11
Russian Federation DTC  1995-08-24
Cyprus DTC  2000-01-21
Greenland TIEA 2011-12-01
Pakistan DTC  1994-09-03
Sri Lanka DTC  1996-03-12
Iceland TIEA 2011-12-01
Zimbabwe DTC  1992-03-06
South Africa DTC  1996-07-05
Sweden DTC  2011-12-01
Nepal DTC  1999-08-03

Tax treaties Map

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