Mauritius

Mauritius has established itself as a key financial and business center in the Indian Ocean, recognized for its political stability, investor-friendly climate, and access to international markets. The country’s legal system—rooted in both civil and common law traditions—provides a solid foundation for cross-border business structures. The jurisdiction also maintains a reliable banking sector and offers a wide range of qualified corporate, fiduciary, and legal services.

Mauritius’ legislative environment is designed to accommodate international commercial activity through transparent and adaptable regulation. A central feature of this framework is the Global Business License (GBL), issued under the Companies Act 2001 and regulated by the Financial Services Commission (FSC) under the Financial Services Act 2007.

The GBL is a licensing regime for companies that intend to operate primarily outside of Mauritius. It replaced the former Global Business Category 1 (GBC1) following legislative reforms introduced in 2018. Entities holding a GBL are allowed to conduct a broad array of business activities, including investment holding, asset management, and certain regulated financial services—provided the appropriate sector-specific license is obtained.

A GBL company must adhere to the scope of activities outlined in its business plan submitted to the FSC at the time of license application. Amendments to the business plan must be notified to the Commission accordingly.

Certain financial activities—such as banking, insurance, fund administration, portfolio management, and fiduciary services—may be undertaken only if the GBL company obtains the relevant additional authorizations. These services are regulated under sector-specific laws, and applicants must demonstrate compliance with prudential and operational standards.

In line with the OECD’s global tax transparency initiatives, Mauritius introduced enhanced substance requirements through the Finance (Miscellaneous Provisions) Act 2018. GBL companies are now required to demonstrate substantive economic presence in the jurisdiction, tailored to the nature and scale of their operations.

To satisfy substance criteria, GBL companies must:

• Carry out core income-generating activities (CIGA) in Mauritius;
• Employ directly or indirectly a reasonable number of qualified personnel;
• Maintain adequate expenditures in Mauritius proportionate to their business activity.

For instance:

• Investment holding companies are required to maintain an annual expenditure of at least USD 12,000.
• Non-investment holding companies must demonstrate expenditures of USD 15,000 and employ at least one local employee if their annual turnover is under USD 100 million; or two employees if it exceeds that threshold.
• Companies involved in fund management may require spending in the range of USD 30,000, with staffing requirements of between one and three employees, depending on assets under management.
• Financial service providers such as insurance companies, leasing firms, credit finance entities, investment advisers, and intermediaries are subject to varying substance thresholds based on the scope of their activities.
• GBL companies that hold and exploit intellectual property must demonstrate that appropriate research and development activities are undertaken in Mauritius to meet economic substance standards.

Historically, GBL companies (formerly GBC1 entities) benefited from a Deemed Foreign Tax Credit (DFTC) mechanism, which effectively reduced the corporate tax rate from the statutory 15% to 3% through an automatic 80% foreign tax credit. However, this system was phased out as part of reforms aligning Mauritius with international tax best practices.

The current regime applies a 15% corporate income tax, with the option for qualifying entities to benefit from an 80% partial exemption on specific categories of income, resulting in an effective tax rate of 3% for those income streams. Eligibility for this exemption depends on compliance with economic substance requirements.

• Income streams eligible for the 80% partial exemption include:
• Foreign-sourced dividends, provided they are not tax-deductible in the source country;
• Interest income;
• Income from ship or aircraft leasing;

Certain income from financial services and licensed collective investment schemes.

• Additional benefits of the Mauritian tax regime include:
• No withholding taxes on dividends, interest, or royalties paid to non-residents;
• No capital gains tax;
• Access to an extensive network of Double Taxation Avoidance Agreements (DTAAs) with over 40 countries.

To obtain a Global Business License, an applicant must meet at least one of the following conditions:

• The company has or will maintain office premises in Mauritius;
• It will employ at least one administrative or technical staff member who is a resident of Mauritius;
• The company’s constitution mandates arbitration in Mauritius for any internal disputes;
• The company will hold at least USD 100,000 in assets in Mauritius within the first 12 months;
• Its securities are listed on an FSC-licensed exchange;
• It maintains annual operational expenditure that is reasonable for a similar entity managed from Mauritius.

Mauritius also allows for the incorporation of Protected Cell Companies (PCCs), offering an alternative structure for managing segregated portfolios. A PCC consists of a core entity and multiple individually protected cells, each with its own assets and liabilities, legally separated from those of other cells and the core.

While the cells do not have separate legal personality, statutory segregation ensures that the creditors of one cell cannot claim against the assets of another cell or the core. This makes PCCs particularly attractive for fund structures, insurance businesses, and structured finance operations.

In practice, PCCs enable cost efficiencies through centralized administration while still preserving ring-fenced legal protections. Their use can avoid the necessity of establishing multiple legal entities, simplifying regulatory compliance and reducing operational costs.

Mauritius GBL companies and related structures such as PCCs offer a well-regulated platform for international operations, including investment holding, financial services, and fund management. These entities benefit from a clear legal framework, predictable tax treatment, and access to a wide network of tax treaties. While the tax incentives are less automatic than under the previous regime, they remain attractive when paired with properly structured substance.

Businesses intending to operate through Mauritius must now align with enhanced transparency and substance standards. This not only ensures tax compliance but also strengthens the jurisdiction’s standing as a responsible international financial center.