Setting up a company or business in Mauritius
We list below the types of Mauritian company available, both domestic and offshore. We explain briefly where each would normally be used and the benefits of doing so and provide some guidance as to what to consider when using Mauritius for business. The Mauritius offshore sector has changed much over the last few years. GBC 1s and 2s were stopped although existing entities remain grandfathered until June 2021. The GBC and domestic company were harmonised and the AC is not tax resident in Mauritius. This is a very brief summary and is not to be relied upon other than for general information purposes.
Why do People incorporate companies in Mauritius?
Mauritius is used as an investment hub into Africa, India and China. There are many Double Taxation Avoidance Treaties (DTA) and International Promotion and Protection Agreements (IPPA), especially with African Countries, and due to the regional agreements as well, Mauritius is one of the best platforms for Africa. There is a strong banking system, respectable Legal Framework and an educated but relatively cheap workforce. Many companies are setting up their Global Headquarters here, or running all of their African operations from Mauritius. There are several schemes that give sizeable tax holidays for many years and there is also the great benefit that it is a lovely place to live alongside all of the fiscal benefits.
Types of Companies in Mauritius
1 – Domestic Companies in Mauritius (DC)
These are local companies, primarily for doing business in Mauritius or purchasing property in Mauritius. Company law is similar to that within England or Australia. Foreigners can own companies without restriction in principle, and can set them up without coming to Mauritius. A domestic company is not for doing global trade if it is owned by a foreigner. A DC can be set up by someone online without assistance but the person will need a local registered office, a local director and company secretary. There will need to be a local trading licence and other considerations such as Data Protection registration. Cheaper than a management company, we normally recommend local accounting firms for our clients that can provide value in setting up and administering these for you.
2 – Global Business Companies in Mauritius (GBC)
There is very little difference between the GBC and the domestic company from a legal perspective. The GBC is to be used when foreigners set up a company and they are going to do business outside Mauritius, or they are doing financial activities that require a GBC licence. GBCs need to be set up and administered by a Management Company. There needs to be 2 directors resident in Mauritius, whom are generally provided by the management company. These companies currently take around 6-8 weeks to set up including a bank account. If there is a need for other Mauritian licences, such as an Investor Dealer Licence, Investor Advisor Licence, Payment Service Provider Licences (Payment Intermediary Service Licence in Mauritius) or Collective Investment Scheme Licences (Fund Licences), then expect the timeframes to be a lot longer.
3 – Authorised Companies (AC)
An Authorised company is not resident in Mauritius for tax purposes, and therefore cannot utilize many of the benefits of using Mauritius such as the DTAs and the IPPAs. There is no tax in Mauritius for an Authorised Company. The directors must be outside Mauritius so you should ensure that the management company setting up the AC has an office outside Mauritius, in an appropriate tax location rather than using a 3rd party agent to provide corporate directors. An AC cannot be used to get a work permit as an Investor unlike the DC or GBC which both can be used for this purpose.
Tax on Domestic Companies and Global Business Companies
They are both taxed at 15%, but instead of the old deemed foreign tax credit of a GBC1, there is now a partial tax emption of 80% for certain sources of income for both companies. This brings tax of the entity down to 3% for those that can utilise these benefits. Both types of company are only taxed at 3% for exporting products, so a trading company can have the Global Business Licence to buy in Asia, sell in Europe without having to bring the products to Mauritius and still only pay 3% tax. There is no capital gains tax or tax on dividends and no capital or exchange-controls, so it is no wonder that it is very popular to set up companies in Mauritius.
Management Companies
Management companies are corporate service providers licensed by the Financial Services Commission (FSC). They are the only permitted entity to set up and administer an AC or GBC. Management companies vary greatly in terms of their size, expertise, responsiveness and global reach. One must choose carefully as there are almost 200 MCs. It may be that the client needs the cheapest, or one that can provide a multiple-jurisdiction solution, or a local African office, a particular area of expertise such as FinTech, or a particular language to be spoken, TBI can assist in this process. We work with providers who guarantee the service at a reasonable price.
Conclusion
You will need guidance and advice as to your structuring requirements and licences to make sure that the company chosen is the most effective and tax-efficient model. TBI works with the most reputable management companies, tax experts, accountancy firms, lawyers and banks as well as with the FSC, EDB and Registrar of Companies, to provide a one-stop shop in Mauritius for your business needs and relocation needs. We only bring in partners where they are suitably competent and bring value to the client. We work with many management companies who give our clients good prices and service as we provide a lot of work to them and they also know that we introduce multiple MCs.
What TBI Business Advisors can do for you
- We will have a Zoom/ Teams call or email exchange to understand your requirements.
- If required, we will make introductions to one or more providers and keep on introducing until you are content with the choice. We are independent.
- We will send a detailed proposal with clear costs, timeframes and explanations for any work that we will do.
- We can assist with relocation/ concierge tasks such as helping with schools, accommodation, insurance, choosing locations and then support once you have arrived here.
- We can assist with appropriate permits or visas for coming to Mauritius.
- We can assist with the finding and purchasing of property or other businesses, and setting up of an entity to purchase through.
- The directors of TBI can act as a Commissioner for Oaths.
- We can assist with other business advice and can bring in law firms and other specialist services as and when required, with a focus on costs and reliability.
Please contact us via our website or via email to info@tbimauritius.com.