Mauritius is a premier international business centre located in the Indian Ocean. Over the past 20 years Mauritius has enjoyed unprecedented growth and socio-economic development and has emerged as a political stable democracy that welcomes foreign investors and businesses. Mauritius has become a credible jurisdiction for offshore company formation offering a reliability and security to investors through its flexible regulatory framework.
The Mauritian Government actively encourages foreign investment and offshore activity through the Board of Investment. The government introduced wide ranging incentives to attract foreign investment and consolidation of the legal and fiscal framework has resulted in modern, user-friendly legislation that has contributed to the rise of Mauritius as a major offshore financial service centre. The government’s development strategy centres on foreign investment and due to this Mauritius has attracted thousands of offshore entities.
The credibility of Mauritius for offshore investments has been solidified by adherence to the new international requirements involving combating financial terrorism and money laundering. This has facilitated Mauritius to enjoy a reputation as a trustworthy, well regulated offshore centre with guaranteed confidentiality.
Key Benefits for registering a company in Mauritius
Forming a company in Mauritius is a simple, straightforward process regardless of whether you choose a GBC1 Company (a Resident Company) or a GBC2 (an Offshore Company). If correctly structured a Mauritius Company is an efficient, low-cost, legally tax efficient entity in which to conduct business. There are a number of benefits attached to incorporating a GBC1 and GBC2 company in Mauritius.
GBC 1 Companies features & benefits:
GCB1 Companies are treated as tax resident and are liable to pay taxes on their earnings however because of this they are also entitled to the benefits of the extensive Mauritian Double Tax Treaties. A GBC1 may be a locally incorporated company or may be a branch of a foreign company. Business must be conducted in a foreign currency and cannot engage in business in Mauritius.
- Requires a minimum of one Director who must be a natural person (Eltoma can provide nominee Directors).
- A minimum of one Shareholder is required who can be of any nationality and need not be resident in Mauritius. Corporate Shareholders are permitted.
- A resident Company Secretary is required (Eltoma can provide this).
- Business can be conducted internationally.
- GBC1 Companies are regarded as being resident therefore are able to take advantage of the Mauritian Double Tax Treaties. The tax treaty is particularly favourable with India and Mauritius has become a popular location for holding companies for those trading or investing in India.
- GBC1 companies can utilize the unilateral foreign tax credit which stands at 80% of the Mauritian Tax Rate, which leaves a residual liability of 20% of the Mauritian rate which is equal to 3%. There are current discussions on possible further reductions on this rate.
- No Capital Gains or withholding taxes levied.
- No limit on the carrying forward of tax losses.
- No Withholding Tax on dividends, interest, royalties and payment of redemption proceeds.
- Entitled to underlying tax credits on dividends if shareholding in Investee Company is greater than 5%.
- Interest received on deposits in Mauritian bank accounts are tax exempt.
- Inheritance tax, gift and estate taxes are not applicable.
- No stamp duties, registrar duties or levies.
- A branch of a foreign company may also have access to the tax treaty network provided that the local authorities are satisfied that effective management and control of the foreign branch is in Mauritius.
GBC 2 Companies features & benefits:
GBC2 Companies are private entities that conduct business outside Mauritius, a GBC2 Company is not allowed to conduct business in Mauritius. A GBC2 may be a locally incorporated company or registered as a branch of a foreign company. Confidentiality is a major benefit to a GBC2 and the identiy of the beneficial owner can remain largely confidential. A GBC2 is a good structure for holding and managing private assets.
- High degree of privacy protection (through the use of nominee Directors and shareholders).
- Mauritius company formation permits 100% foreign ownership meaning no local nominee is required.
- Only one Director and one Shareholder required.
- Legal tax exemption for GBC2 Companies but no access to the Mauritian Double Taxation Treaty allowed.
- No accounting or reporting requirements which minimise maintenance costs.
- GBC2 company enjoys limited liability without any paid up capital (there is no minimum capital required).
- No Withholding Tax on dividends.
- No Capital Gains Tax.
- No Stamp Duty on transfer of shares.
- Free repatriation of earnings.
- Migration from a foreign company to/from Mauritius is permitted.
- Shareholders and Directors can meet anywhere.
- Registered office and agent in Mauritius is required.
- Conversion to GBC1 is permitted.
Mauritius & Cyprus company comparison table
|Price of Registration:||€1550||
GBC 1 – $6500GBC 2 – $3200
GBC 1 – $4200GBC 2 – $1900
|Bank Account:||€450||From $2000|
|EU Member State:||Yes||No|
|Currency:||Euro (€)||Mauritian Rupee (MUR)|
|Corporation Tax Rate:||12.5%||- GBC1 companies at 15%
- GBC2 companies at 0%
- Other companies at 15% (Alternative Minimum Tax may apply).
|Capital Gains Tax Rate:||20% (only on immovable property situated in Cyprus).||0%|
|VAT Standard Rate:||19%||15%|
|VAT Reduced Rate:||9%, 5% & 0%||n/a|
|VAT Registration Threshold:||€15,600||MUR 2,000,000|
|Tax Return Requirement:||Yes||Yes|
|Tax Rate on Dividends from Local Investments:||0%||0%|
|Tax Rate on Dividends from Foreign Investments:||0% (subject to easily met criteria).||- GBC1 companies - 3%
- Other companies - 15% (or Alternative Minimum Tax).
|Tax Rate on Interest Income:||12.5% for active and 30% for passive interest income.||- GBC1 companies - 3%
- Other company types - 15% (or Alternative Minimum Tax).
|Withholding Tax on Interest Payments to Foreign Recipients:||0%||- GBC1 companies - 0%
- Other companies - 15%
Discover the benefits of forming a Cyprus company here!
CJEU: Defines Key Definitions for Tax & Beneficial Ownership Purposes
Last month, the Court of Justice of the European Union (CJEU) issued a series of important judgments dealing with tax avoidance and beneficial ownership in the context of the EU Parent-Subsidiary Directive (PSD) and the Interest and Royalties Directive (IRD).