Benefits and problems of registering a company in Mauritius
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Benefits and problems
Benefits of Mauritius company registration
- Registering a Mauritius offshore company can be completed within one week, with a minimum of one shareholder and one director of any nationality, who both can be residing elsewhere than Mauritius. The minimum paid-up capital is US$1 and our Clients will be able to register his new business in Mauritius without travelling to the island;
- Entrepreneurs investing in Mauritius can take advantage of several incentives available in Mauritius Export Processing Zones: their resident company can get an exemption from corporate tax for up to 10 years and custom duties on capital goods and selected raw materials. Healy Consultants can assist our Clients applying for authorization to run a business in the EPZ with the Mauritius Board of Investment.
- Mauritius Global Business Companies 1 allow our Clients to legally minimize taxation over their global earnings because:
- Mauritius GBC1 companies are considered as resident companies for tax purposes but benefit from a corporate tax at an attractive rate of 3% over their global earnings;
- Interest and dividends remitted to a GBC1 company can legally be exempted from withholding tax, as such companies have access to the Mauritius’s 42 double tax avoidance agreements signed with countries including i) Germany ii) Italy iii) the UK iv) China v) France vi) India vii) Malaysia viii) Singapore and ix) United Arab Emirates;
- Mauritius GBC1 companies will also not pay withholding tax in Mauritius on earnings interest and dividends remitted abroad to both corporate and individual owners;
- Unlike GBC2 companies, Mauritius GBC1 companies are allowed to conduct business with local customers and to provide financial and insurance services, provided they obtain the relevant license with the Mauritius Financial Services Commission.
- Mauritius Global Business Companies 2 are great vehicles to conduct business outside of Mauritius:
- This type of offshore company in Mauritius is allowed to conduct all types of transactions with nonresidents, except for the provision of financial, banking and insurance services;
- A Mauritius GBC2 will not be subject to corporate tax in Mauritius and can trade in all currencies, apart from the Mauritius rupee;
- Mauritius GBC2 will also not be subject to withholding tax to interest and dividends remitted outside of Mauritius
- Owner(s) of a Mauritius GBC2 company to reside in the country, nor to appoint resident director(s). The company can be managed from abroad, while a resident company secretary will be responsible to maintain company records;
- This business entity will also be exempted from requirements to file financial statements (just a financial summary).
Problems with Mauritius company registration
- Mauritius companies suffer from the island’s tax haven reputation. Our Clients establishing a Mauritius offshore company can attract additional scrutiny from tax authorities and banks;
- The tourism industry is partially closed to foreign investors willing to register a Mauritius resident company. For instance, foreigners cannot have a majority stake in a hotel with less than 100 rooms. They also need to make an initial investment of at least US$300,000 to open a restaurant in Mauritius;
- This is particularly true for India-based Clients, as the Indian government i) has recently threatened the island with notified jurisdictional area status and ii) is currently renegotiating its DTA in order to include automatic exchange of fiscal information between the two countries.
Best uses for a Mauritius company
- Mauritius is a great location to form a holding company, especially for our Clients running businesses in Africa as they will then be able to make use of the numerous double taxation avoidance agreements signed between Mauritius and this part of the world. Our Clients interested by the same should then opt to form a GBC1 company;
- Mauritius is also a good place to form an international trading company. The GBC2 company is then the business entities of choice for such activities;
- Lastly, Mauritius is an emerging hub for BPOs and call centers, thanks to low labor costs and a multilingual workforce, fluent in French, English and also often able to communicate in Hindi and Tamoul.