Ease of Doing Business in Mauritius – SK Patodia

Ease of Doing Business in Mauritius

Expanding in Mauritius:

Mauritius the leading International Financial Service Centre, which attracts the Foreign Investment by providing a platform full of opportunities and ease of doing business to potential investors. No Exchange Control, hence allowing free repatriation of profits and no restriction on the flow of funds in and out Mauritius.

Mauritius holds 23rd position out of 141 countries for the Forbes Survey of Best Countries for Business 2012. Ranked 19 out of 185 countries for the Ease of Doing Business 2013.

It has 42 DTAA which provides for lower taxes on Dividend, Capital Gains, Interest and Royalties from the countries of Investment.

Multiple methods are available to investors to work in and from Mauritius:

  1. GBC License (previously known as GBC 1);
  2. Authorized company (previously GBC 2 License);
  3. Domestic Company.

Requirements to Global Business License Company in Mauritius

This is one of the common forms of license which foreign investors opt for. Especially companies engaged in financial activities like Banking, Insurance, Investment Management Services, Investment Advisory Services, can only form such licensed company. Features of GBC Licensed Mauritian Company:

  1. Allows conducting business principally outside as well as inside Mauritius.
  2. Regulated by FSC, i.e., Financial Service Commission.
  3. Allows a foreign investor to hold 100% shares in the company;
  4. Need at least 2 Local Resident Directors on the Board of Management of the company;
  5. Need a Company Secretary
  6. No minimum share capital requirement. With a capital of minimum MUR 100 is also enough to incorporate the company;
  7. Income/Corporate Tax rate of 3% is applicable on various industries but for others, the tax rate of 15% applies.
  8. Zero Minimum Deposit Bank account.
  9. Can be created in 5-10 days;
  10. Treated as Tax Resident Company for tax purposes only if it satisfies the substance requirements of being managed and controlled in/from Mauritius by abiding the following points:
  • Core income generating activities are carried out in or from Mauritius;
  • Employ a reasonable number of an accordingly qualified person to carry out the core activities;
  • Have a minimum level of expenditure which synchronizes with the level of activities of the company;
  • Be managed and controlled from Mauritius  & administered by a Management Company;

 

Authorized Company

This is for the Tax Exempt entities. These entities are specially used for international business transactions, consulting services or for private investment holdings. This type of company provides greater flexibility and is a suitable form to hold and manage private assets.

  1. Allows conducting outside Mauritius. A 100% export oriented company.
  2. Regulated by FSC;
  3. Allows 100% shareholding to a foreign investor in the company;
  4. No need of Resident Local Directors on the Board of Management of the company.
  5. Corporate Director can also be on the board of the Authorized Company;
  6. No need to appoint a CS;
  7. A registered agent is required to be appointed;
  8. 0% Corporate Tax on worldwide income, No Withholding Taxes, No Capital Gains Taxes.
  9. No requirement of a minimum number of shareholders’ or directors’ statutory meetings;
  10. No Audit requirements;
  11. No funds can be raised from the public;
  12. Zero Minimum Deposit Bank account.
  13. Can be formed in 2-3 days’ time;
  14. Ideal for investors who need simple, tax-free, less costly, and confidential corporate vehicles to hold assets, conduct trade, provide international consultancy services.

Domestic Company

  1. A foreign investor can also form a domestic company;
  2. 100% shareholding can be held by the foreign investor;
  3. Not regulated separately by the Financial Service Commission;
  4. Less costly as compared to an FSC regulated companies;
  5. Need Local Resident Directors on the Board of Management.
  6. 15% Corporate Tax Rate;
  7. Zero Minimum Deposit Bank account.
  8. Can be formed in 1-2 week’s time