Scroll Down
Global Business Companies - GBC
A GBC is a body corporate registered in Mauritius and which is licensed by the Financial Services Commission as holding a Global Business Licence to conduct business outside Mauritius.
A GBC may either be independently locally incorporated or be registered as a branch of a foreign company. A foreign company may be redomiciled and continue as a Mauritian GBC, if the foreign law so permits. Place of Effective Management must be in Mauritius.
There is no minimum or maximum capital requirement and the share capital can be expressed in any currency other than the Mauritian Rupee.
A GBC, being tax resident in Mauritius, is the ideal structure for trading and investment holding purposes.
A GBC can be used to hold intellectual property rights such as copyright, industrial designs, patents, trademarks, service marks and other collective marks.
A GBC may have their offices based in Mauritius and employ Mauritians/foreigners depending on the profiles of the employees.
A GBC allows investors/professionals (along with their dependants) to stay and live in Mauritius through an occupation permit for a renewable period of three years subject to meeting specific requirements.
Key Features
- A GBC may conduct any business activity to the extent that it is not unlawful or contrary to public interest and to the extent that it does not cause or is likely to cause serious prejudice to the good repute of Mauritius as a centre for financial services.
- A GBC should be administered at all times by a Management Company and should be controlled and managed in Mauritius.
- A GBC must have at least 2 directors, resident in Mauritius, of sufficient calibre to exercise independence of mind and judgement.
- A GBC must maintain at all times its principal bank account in Mauritius.
- A GBC will keep and maintain at all times its accounting records at its registered office in Mauritius.
- A GBC will prepare its statutory financial statements and cause same to be audited in Mauritius and file these with the Financial Services Commission annually within the period prescribed by its licence.
- A GBC will provide for meetings of directors to include at least 2 directors from Mauritius.
- The majority of shares or voting rights or legal or beneficial interest of the GBC must be held or controlled by a person who is not a citizen of Mauritius.
- A GBC is required to have its registered office in Mauritius and have at all times a licenced Company Secretary in Mauritius.
- A GBC is required to carry at all times its core income generating activities in, or from, Mauritius by:
-
- Employing, either directly or indirectly (through the management company), a reasonable numberof suitably qualified persons to carry out the core activities; and
- Having a minimum level of expenditure, which is proportionate to its level of activities.
Taxation
- A GBC benefits from the absence of capital gains tax and reduced withholding taxes on payment of royalties and dividends abroad.
- The standard rate of tax on a GBC is 15%. However, a Tax rebate of up to 80% is applicable for Global Business Companies complying with specific conditions such that the effective tax rate is reduced to 3%.
- The effective rate of tax may be reduced further to the extent that the income received by the GBC, such as but not limited to foreign dividends, has been subjected to and reduced by withholding taxes in the source country.
- Any dividend received by the GBC from a Mauritian registered entity is not taxable in Mauritius.
- A GBC may benefit from Double Taxation Avoidance Agreements in place, which vary from countries to countries.
Authorised Companies – AC
An AC is a tax exempt, flexible business entity that is regularly utilised for international investment holding, international property holding, international trade, international management and consultancy.
The place of effective management must be outside of Mauritius, the activity of the company must be conducted principally outside of Mauritius and must be controlled by a majority of shareholders with beneficial interest being individuals who are not citizens of Mauritius.
key Features
- An AC must have a minimum of one shareholder and one director (may be individual or corporate).
- An AC is required to have a registered agent and registered office in Mauritius.
- An AC is required to keep its records at its registered office in Mauritius.
- An AC is not required to hold a bank account in Mauritius.
- An AC is required to prepare its financial summary and file same with the Financial Services Commission annually within six months after its balance sheet date.
- An AC is required to prepare and file its annual tax return with the Mauritius Revenue Authority.
- An AC is not required to have substance in Mauritius.
Taxation
Protected Cell Companies – PCC
A protected cell company (PCC) is a company incorporated for the purposes of carrying out a global business to segregate its assets into different cells within that company, with a view to protect each cell from any extension of liabilities from one cell to the other. A PCC provides flexibility and security for international investment structuring.
A PCC will generally have two classes of shares:
- Ordinary shares, which control the Core, these being the voting shares of the PCC; and
- Cellular shares, which are related to individual Cells and which will be distinct and separate from other Cells. The voting rights of Cellular shares are limited to the management of its respective cell.
Key Features
- Single legal entity
- Legal segregation and protection of assets and liabilities for each cell.
- No minimum capital requirement is imposed for the PCC or the cell(s) except in the case of insurance business.
- Creation of cellular and non-cellular assets.
- Unlimited number of cells may be provided with, each cell having its own name or designation.
- Incorporation may be continued or converted from an existing company.
- Can segregate different areas of risk & activity in dissimilar cells.
- Unlimited number of cells can be created in the Company
- A formal procedure is provided for the liquidation, receivership or administration order for any individual cell.
- An important feature of the PCC Act is the provisions for the protection of creditors. A person dealing with a PCC must be informed of the PCC status and the cell with which the relevant transactions are taking place must be identified, as stipulated in sections 11 and 13(2) respectively. Additionally, the Directors of a PCC are bound by law to keep the cellular assets separate and separately identifiable from cellular assets attributable to other cells. If a Director fails to inform a person that he is dealing with a PCC, and that person is otherwise unaware of, and has no reasonable basis for knowing, which cell he is dealing with, the Directors incur personal liability to that person in respect of the transaction. Nevertheless, the Directors have a right of indemnity against the non-cellular assets of the PCC in respect of their personal liability unless they acted in a fraudulent, reckless or negligent manner or in bad faith.
Taxation
- The standard rate of tax of a GBC as a PCC is 15%. However, a Tax rebate of up to 80% is applicable for Global Business Companies complying with specific conditions such that the effective tax rate is reduced to 3%.
- Access to the Double Taxation Agreements (DTAs) which Mauritius has in place with several countries
Limited Partnership – LP
A Limited Partnership (LP) combines features of both a company and of a partnership. It gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.
Key Features
- Governed by the Limited Partnerships Act 2011
- There must be a partnership agreement that is binding upon the partners, setting out the affairs of the partnership and the conduct of its business.
- Must have at least one general partner who is liable for all the debts and obligations of the partnership.
- Must have at least one limited partner who is liable only up to the maximum amount of its commitment.
- Can elect to have legal personality
- Can have a pre-determined lifetime
- Must have a registered agent and registered office which will retain all documents of the Company
Taxation
- If the LP elects to have a legal personality: Corporate tax at the rate of 15%, however if a LP holds a GBC license, it may qualify for deemed tax credits at a maximum of 80% of foreign income, hence resulting in an effective tax rate of 3%.
- If the LP elects to have a legal personality: Access to Double Taxation Agreements with more than 40 countries round the globe.
Domestic Companies
A domestic company, also referred to as a local company, is defined as being a company incorporated under the laws of Mauritius and governed by the Mauritius Companies Act 2001.
Special schemes are available for domestic companies operating in the following sector:
- Freeport
- Information & Communication Technology
- Knowledge & service industry
- Industrial diversification
- Tourism & Leisure
- Fishing & Marine Projects
- Textile & Clothing
- Real Estate Holding
Key Features
- A domestic company can either be a Private or Public Company. There are three types of domestic companies in Mauritius, namely:A) Limited by shares
Company limited by shares means a company formed on the principle of having the liability of its shareholders limited by its constitution to any amount unpaid on the shares respectively held by the shareholder.Limited by guarantee
Company limited by guarantee means a company formed on the principle of having the liability of its members limited by its constitution to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.C. Limited by both shares and guarantee (Also known as Hybrid)
Company limited by shares and by guarantee means a company formed on the whose constitution limits its life to a period not exceeding 50 years from the date of its incorporation. However, this period may be extended to a maximum of 150 years. Its constitution contains the specific matters as laid down in the law. - A Domestic Company may be wholly owned by foreign residents.
- A Domestic company should compulsorily appoint at least one Mauritian resident director.
- This type of vehicle can also transact with Mauritian and foreign companies.
- A Domestic Company may or may not adopt a constitution, however if it opts not to adopt one, the company will be governed by the Companies’ Act.
- Normally a domestic company is classified as ‘small private company’ where the turnover is less than MUR50 million and is liable to corporate income tax of 15% on its domestic chargeable income. The Company can conduct business with local and non-local residents of Mauritius.
- A domestic company may hold immovable property like high-end villas or apartments.
- All companies, except for domestic private companies with turnover of less than MUR50 million, must have their financial statements audited. These must then be filed with the Registrar. As for the case of domestic private companies with turnover of less than MUR50 million, must file their accounts (financial summary) and their Annual return with the Registrar of Companies.
- A domestic company with more than MUR50 Million turnover needs to have a Company Secretary.
Taxation
- A domestic company is taxed at 15% on chargeable income, however for those domestic companies which are engaged in the export of goods, the tax rate of 3% will apply.
- For a domestic company receiving dividend, interest or royalty, no tax is applicable.
- Dividends paid by a Mauritius-resident company are exempt from income tax.
- The domestic company is resident in Mauritius and accesses to the Double Taxation Agreements (DTAs) which Mauritius has in place.
- The domestic company is not subject to withholding tax on capital gains tax, dividends or exchange control in Mauritius
Trusts
A trust is a legal agreement created by a settlor and a trustee. As part of this agreement, property (the trust property) is stated to be held by the trustee for the benefit of the beneficiary(ies) or for some purposes, creating a binding obligation on the trustee(s) to act in accordance with the trust deed.
Mauritius Trusts are governed by The Trusts Act 2001 (the “Act”).
Key Features
- The Mauritius laws allow for the formation of discretionary trusts, purpose trusts and charitable trusts.
- Non-resident trusts are tax exempt in Mauritius although may optionally apply to become resident in order to take advantage of Double Taxation Avoidance treaties.
- Trusts are not required to be registered in Mauritius, but may do so voluntarily if desired. There is also no requirement for the trustees to disclose the identity of the beneficial owners to any authority. (Under exceptional circumstances, a trustee may be required to give confidential information to authorised persons under anti-money laundering, prevention of terrorism or prevention of corruption legislation or to the Financial Services Commission.)
- There are no Government or statutory fees for trusts.
- Trusts in Mauritius have a 99-year perpetuity period, except for noncharitable purpose trusts where the duration is 25 years.
Benefits:
- Tax Planning – A properly established Trust may produce substantial savings in income tax, capital gains tax and inheritance tax/estate duty.
- From a succession planning perspective, a Trust Structure can be set up to hold investments in different jurisdictions.
- Avoiding Forced Heirship
- Estate Planning
- Protection against creditors
- Confidentiality
- Mauritius Trusts have often been used for the purpose of protecting assets from risk
Taxation
- Declaration: A Trust is not taxable in Mauritius provided that a Declaration of non-Residence confirming that the settlor/beneficiaries are non-resident in Mauritius is filed per the Income Tax Act. In such a case, no annual tax return is required to be filed in Mauritius.
- Incidence of tax: A Trust which does not qualify to be non-resident is taxable on its chargeable income at a rate of 15% per annum.
- Treaty benefits: A tax resident Trust can benefit from the Mauritius tax treaty network.
Foundation
A Foundation is a legal entity that combines the features of a Trust and a Company. Its legal structure and functions are similar to those of a Trust but is administered as a Company. Foundations are interesting to clients who may be unfamiliar with the concept of Trusts, particularly in civil law countries.
The Mauritius Foundation can opt to have a separate legal personality thus having a certificate of registration and hold assets in its own name. A Mauritius Foundation enjoying a legal personality can also carry out all functionalities of an incorporated institution.
Key Features
Every Mauritius Foundation shall have:
- A secretary which shall be a management company or be such other person resident in Mauritius as may be authorised by the Financial Services Commission.
- A Registered Office in Mauritius to which all communications and notices shall be addressed and which shall constitute the address for service of legal proceedings on the Foundation.
- A Foundation Council which shall administer the property of the Foundation and carry out the objects of the Foundation. A Foundation Council shall have at least one member who shall be ordinarily resident in Mauritius.
- A name ending with the word “Foundation” or a word in a foreign language which has the same meaning as the word “Foundation.
Benefits:
- Wealth protection
- Private relationship
- Being recognised in all common and civil law jurisdictions
- Holding assets which can be passed on from one generation to the next (estate planning)
- Minimizing estate taxes or other inheritance taxes
- Avoidance of forced heirship rules
- Maintenance of corporate control
- Separation of voting and economic benefits
- Charitable purposes
- Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements.
Taxation
- A Foundation registered or having its Central Management and Control (CMC) in Mauritius is considered to be Mauritius resident and is liable to a 15% income tax on its chargeable (worldwide) income.
- Otherwise, a Foundation that has its CMC outside of Mauritius will not be subject to tax on its foreign source income in Mauritius. However, the non-resident Foundation will need to file an income tax return in order to declare and pay income tax (15%) on its Mauritius sourced income.
Funds
Collective Investment Schemes (CIS) and Closed-End funds (CEF)
A Fund in Mauritius is regulated as a “Collective Investment Scheme” or a “Closed-End Fund” and authorisation is required from the Financial Services Commission.
A CIS is often referred to as an Open-Ended Fund. The aim is to pool capital from accredited investors or institutional investors and to infuse such funding in a variety of assets, often with complex portfolio-construction and risk management techniques thus diversifying its investment risk and at the same time ensure an absolute return objective.
A CEF is where funds are pooled from investors who have committed to the Fund. CEF are the preferred fund structure for private equity funds and are set up for different purposes, sectors, and geographical regions, with a limited life and liability, enabling the Fund Manager or Investment Advisor to apply the funds, develop investees, create the ESG impact, exit and provide a return to the investors.
Sub-categories of CIS
- Professional CIS: Professional CIS are CIS which offer their shares solely to sophisticated investors or as private placements
- Specialised CIS: Specialised CIS is one that invests in real estate, derivatives, commodities or any other product authorised by the FSC
- Expert Fund: An Expert Fund is a Fund which is only available to expert investors. As per the Securities Act 2005 (‘SA 2005’), an expert investor means:
- an investor who makes an initial investment, for his own account, of no less than USD 100,000; or
- a sophisticated investor as defined in the SA 2005 or any similarly defined investor in any other securities legislation
- Global Scheme: While there are no prescribed minimum subscription amount from investors, in order to begin its operations, a Global Scheme must receive a minimum amount of subscription of at least 5% of the total amount to be raised from investors (or the amount prescribed under its offer document)
Key Features
- A fund can take advantage of double taxation avoidance agreements.
- There is no capital gains tax in Mauritius.
- There is no withholding tax on dividend and interest in Mauritius.
- There is no exchange control in force and funds can be repatriated freely.
- It is now possible to incorporate an exempt fund in Mauritius as a company up under the Mauritius Companies Act 2001. Such corporate funds will be exempt from tax but do not benefit from tax treaty advantages.
Taxation
- The maximum income tax liability on a fund which is tax resident in Mauritius is 3%.
- A fund can claim underlying taxes and benefit from tax sparing provisions.
Special Licences in Mauritius
Companies holding special licences in Mauritius are regulated by the Financial Services Commission.
- Practice
- Global Headquarters Administration
- Provide credit facilities, administration and control, arrangement of derivatives, advisory services, invoicing, guarantees and performance bonds, fund management and investment and other specific activities.
- Global Legal Advisory Services
- Provide legal assistance in local and international laws and relevant to the provisions of the Financial Services Commission.
- Overseas Family Office Licence and Overseas Licence
- Provide advices in terms of investment, budgeting, family businesses and tax related queries and services.
Free Consultation
Our team of professionals will gladly assist for further information
