Mauritius

Mauritius, located in the Indian Ocean, has developed into a key international financial and business jurisdiction, recognized for its stable political environment, liberalized economy, reliable banking infrastructure, and availability of professional services. As a jurisdiction of choice for cross-border business structuring, Mauritius offers a range of corporate vehicles tailored to the needs of global investors and enterprises.

One of the key structures available for non-resident entities is the Authorized Company, which was introduced as part of regulatory reforms implemented on 1 January 2018. This reform reshaped the country’s offshore regime, abolishing the former Global Business License Category 2 (GBL2) and replacing it with the Authorized Company license. Concurrently, the Global Business License Category 1 (GBL1) was renamed as the Global Business License (GBL).

In response to international tax transparency standards, the Mauritius Financial Services Commission (FSC) restructured this framework. The GBL2 structure was discontinued, and its functional equivalent became the Authorized Company, aimed at companies controlled and managed from outside Mauritius. The goal was to align with OECD Base Erosion and Profit Shifting (BEPS) measures, particularly concerning tax residency and substance.

An Authorized Company is a type of company incorporated in Mauritius that is considered non-resident for tax purposes, provided it meets specific criteria concerning its place of effective management (POEM).

To qualify, the following conditions generally apply:

• The company is directly or indirectly controlled by non-residents of Mauritius;
• It conducts business activities primarily outside Mauritius;
• The effective management of the company is located outside Mauritius.

The concept of “place of effective management” plays a central role in determining tax status. The Mauritius Income Tax Act and guidance from the Mauritius Revenue Authority (MRA) consider the following when evaluating POEM:

• Where strategic decisions regarding the core business activities are made;
• Where the majority of board meetings are held;
• Where executive management is routinely carried out.

If such activities are conducted outside Mauritius, the company is regarded as non-resident and may be granted Authorized Company status by the FSC.

One of the main consequences of being classified as an Authorized Company is non-residency for tax purposes in Mauritius. As non-residents, these companies are exempt from Mauritian corporate income tax and are not subject to the tax reporting obligations imposed on resident companies.

Nevertheless, despite being tax-exempt, Authorized Companies are still required to file an annual return of income with the MRA. This filing, often referred to as an information return, must be submitted within six months of the end of the financial year. The purpose of this submission is largely regulatory and informational, rather than fiscal.

Authorized Companies are not entitled to access Mauritian tax treaties, given their non-resident status. Accordingly, they are generally used in international holding or investment structures where treaty access is not required.

Authorized Companies are permitted to engage in a broad range of lawful activities, including but not limited:

• International trade
• International services
• Investment holding
• Consulting services
• E-commerce
• Shipping and logistics
• Asset ownership and management

However, they are not allowed to carry out certain regulated activities, such as:

• Financial services requiring licensing under the Financial Services Act (e.g., banking, insurance, fund management)
• Business with Mauritian residents (except in a professional or administrative capacity)

These limitations are consistent with the intent to restrict Authorized Companies to non-resident operations and ensure that their business is conducted exclusively outside of Mauritius.

Despite their simplified tax treatment, Authorized Companies are still subject to certain legal and administrative obligations under the Companies Act 2001 and FSC guidelines.

Key requirements include:

• Registered Office and Agent: Each Authorized Company must appoint a registered agent licensed by the FSC, and maintain a registered office in Mauritius. The registered agent acts as the intermediary between the company and local authorities and ensures compliance with applicable laws.
• Corporate Registers: The company must maintain up-to-date records, including a register of members, directors, and beneficial owners. These records must be available in Mauritius at the registered office.
• Accounting Records: While there is no obligation to file financial statements, companies must keep adequate accounting records that explain all transactions and reflect the company’s financial position. These records must be maintained for at least seven years and be accessible in Mauritius upon request by authorities.
• Auditing and Financial Statements: Authorized Companies are not required to prepare or file audited financial statements, unless otherwise mandated by their internal governance or by investors.

The Authorized Company structure in Mauritius provides a compliant and efficient vehicle for individuals or entities seeking to establish offshore operations without engaging in domestic business activity. It enables foreign-controlled companies to benefit from a favorable regulatory environment, while remaining exempt from Mauritius income tax due to their non-resident status.

Its contractual and governance requirements are straightforward, and the regime is particularly well-suited to holding structures, international trading entities, or asset management vehicles that do not require access to tax treaties. As with any offshore structure, careful consideration must be given to the substance and management location, particularly in light of international tax transparency standards and economic substance rules.