Business entities in Mauritius
For a smooth business set up process, Healy Consultants Group PLC will cooperate with our registered agents in Mauritius, licensed by the FSC to provide the services of a management company under Section 77(1) of the FSA. Mauritius company setup is an interesting option for Clients willing to reduce taxation over their global earnings. The most common option for that purpose is a Global Business License type 2 company with a (GBC2 company). However, Global Business License type 1 companies (GBC1 companies) should not be overlooked: while such Mauritius business setup requirements include higher government fees than GBC2 and the need for resident directors, such companies have access to Mauritius double tax avoidance treaties and (unlike GBC1s) also allowed to offer financial services.
Doing business from Mauritius with an offshore entity
The Mauritius offshore company (Global Business License type 2 companies)
- This type of Mauritius offshore business entity can be setup with i) a minimum capital of US$1; ii) one shareholder; and iii) one director, who do not need to be residents in Mauritius. Setting up a Mauritius GBC2 company requires a resident registered agent, in charge of maintaining company records;
- GBC2 companies are legally exempt from taxation in Mauritius, including i) corporate tax; ii) capital gains tax; and iii) withholding tax on earnings, dividends and interest paid to individual and corporate shareholders. They also do not need to file annual financial statements, provided a financial summary is filed with the Mauritius Financial Services Commission;
- GBC2 companies are not allowed to trade with Mauritius individuals and businesses and cannot use the local currency, but can conduct any kind of activities outside of the country, except financial, insurance and banking services;
- Effective from 01 January 2019, the Category 2 Global Business License (“GBC2”) will be abolished;
- Best uses for a Mauritius GBC2 company: GBC2 companies can be used to conduct international trade or as holding vehicles, when access to Double Taxation Avoidance Agreements (DTAAs) is not a requirement.
The Mauritius Global Business License type 1 company (GBC1 company)
- The Mauritius GBC1 company can be setup with i) a minimum capital of US$1; ii) one shareholder; and iii) two directors, who both must be ordinarily residing in Mauritius. The Financial Services Commission also frequently requests additional evidence that the company is managed from Mauritius, including a local corporate bank account;
- Similarly, to the Seychelles CSL company, the Mauritius GBC1 company can trade with locals after prior approval from the Mauritius FSP. It is also allowed to provide financial and insurance services, provided a license has been granted by the local authorities for such purpose.
- The Mauritius GBC1 is considered as a resident entity and will hence have to pay tax in Mauritius over its global earnings, but at an attractive rate of 3% compared to 15% for other resident companies. Such scheme can allow the company i) not to pay corporate tax in other countries; and ii) to benefit from withholding tax exemption on dividends and interest remitted from one of the 44 countries which have signed a double tax avoidance agreement with Mauritius;
- Best uses for a Mauritius GBC1 company: a GBC1 company is the right type of business entity for holding activities, as well as regulated services requiring a license, for instance financial services, or insurance / re-insurance.
The Mauritius Limited Liability Partnership (Mauritius LLP)
- Foreigners can register limited liability partnerships in Mauritius with i) only two partners, who both can be non-residents and limited partners; ii) a minimum capital of US$1 per partner; and iii) a manager, who needs to be resident in Mauritius;
- After registration of the partnership, it is necessary to obtain either i) a GBC1; or ii) a GBC2 license, or the partners will be subject to Mauritius personal income tax on the income channeled through the entity. If a GBC1 license is chosen, the manager needs to be licensed as a management company with the Mauritius Financial Services Commission;
- Currently, Mauritius LLPs are only allowed by the Financial Services Commission to offer consulting and advisory services and/or legal services (a license is required to offer the latter services). It is however expected that the Mauritius authorities will broaden the categories of activities legally allowed for a Mauritius LLP;
- Best uses for a Mauritius limited liability partnership: The Mauritius LLP is a good vehicle for the provision of legal and consulting services by overseas partners who are residing in multiple countries.
The Mauritius Authorized Company
- This Mauritius authorized company can be setup with i) a minimum capital of US$1; ii) one shareholder; and iii) one director, who do not need to be residents in Mauritius. Setting up a Mauritius authorized company requires a resident registered agent, in charge of maintaining company records;
- A Mauritius authorized company is not considered as a resident company for tax purposes and consequently does not have to pay corporation tax on net profits;
- It is mandatory for an authorized company to file a return of its income with the Mauritius Revenue Authority;
- Authorized companies must conduct business and have their place of effective management outside of Mauritius;
- Best uses for a Mauritius authorized company: Authorized companies can be used to conduct international trade or as holding vehicles, when access to DTAAs is not a requirement.
Doing business in Mauritius with Local and Foreign Entities
The Mauritius limited liability company (proprietary company)
- The Mauritius LLC requires i) at least 1 shareholder at incorporation, who can be of any nationality and country of residence; and ii) only US$1 of share capital; and iii) one director, who must be resident in the country. Such company is subject to Mauritius corporate tax at a rate of 15% and annual financial statements filing requirements;
- Kindly note that foreign ownership is furthermore restricted in the tourism industry: foreigners willing to invest in Mauritius cannot own more than 49% of hotels with less than 100 rooms. They also need to make an initial investment of at least US$300,000 to open a restaurant;
- Best uses for a Mauritius limited liability company: this entity should only be used to setup a local business in Mauritius, used to hire local staff and to trade primarily with residents. For most other uses, GBC1s and GBC2s are better choices for foreign entrepreneurs.
The Mauritius free zone company (export processing zone company)
- Foreigners willing to use Mauritius as a repackaging or manufacturing hub for products re-exported outside of the country can register their business in the Mauritius Free Port, with benefits including: i) duty free and VAT exemptions on all goods imported in the port; and ii) no corporate income tax;
- To be eligible, a company must i) export 95% of its products to overseas markets; and ii) 80% to African markets. The remaining 5% can be sold locally (and then subject to local corporate income tax and VAT);
- Best uses for a Mauritius free zone company: registering a company in the Mauritius free port is attractive for companies willing to do business with Eastern African customers from a politically stable and well-regulated jurisdiction.
The Mauritius branch
- Mauritius corporate law allows foreign companies to open branch offices, provided they have 1 resident representative and a registered office in the country. The scope of operations for this entity will be defined by the parent company and are subject to licensing requirements similar to those of a local Mauritius entity;
- Branch offices in Mauritius are subject to the standard corporate tax rate of 15% and must also file annual financial statements;
- Best uses for a Mauritius branch office: registration of a branch is an alternative to the registration of a subsidiary for Clients looking to conduct business from Mauritius with Mauritius residents.
The Mauritius representative office
- Mauritius do not provide for the registration of representative offices. Foreign companies can still register a local office to engage in market research and business promotion, but this entity will be subject to the requirements applying by default to a branch;
- Best uses for a Mauritius representative office (“RO”): the RO being technically a branch, there is not much interest in registering such entity. The formation of a subsidiary will usually be a better choice.
Holding assets with a Mauritius entity
The Mauritius offshore trust
- Foreigners can register offshore trusts in Mauritius free of local taxation, provided all assets, settlors and beneficiaries are non-residents;
- There is no need to register the Trust in Mauritius or appoint a local licensed trustee, although this is recommended for additional asset protection;
- Best uses for a Mauritius trust: Mauritius offshore trusts are attractive for family wealth management and asset protection. They are also commonly used as special purpose vehicles for investment activities in Africa.
The Mauritius international foundation
- Foreigners can register their foundation in Mauritius with i) US$1 of capital; and the appointments of ii) one corporate secretary, licensed by the Financial Services Commission; and iii) one resident council member;
- The identities of the foundation founders, council members and beneficiaries are not publicly disclosed, and the entity is also not subject to local taxation provided the assets are located overseas and the foundation purposes / beneficiaries are non-residents;
- Best uses for a Mauritius foundation: registering an offshore foundation in Mauritius is a good way to conduct charitable activities or facilitate wealth management of a family or Group of companies.
Different types of Mauritius business entities
|Entity type||Offshore company||Offshore company||Local company||Free zone company||Branch||RO||Trust||Foundation|
|Also known as?||GBC2||GBC1||LLC||EPZ||Branch||RO||Trust||Foundation|
|Doing business in Mauritius permitted?||No||Yes||Yes||Yes||Yes||No||No||No|
|Allowed to sign contracts with local Clients?||No||Yes||Yes||Yes||Yes||No||No||No|
|Allowed to invoice local Clients?||No||Yes||Yes||Yes||Yes||No||No||No|
|Local office premises required before registration?||No||No||No||No||No||No||No||No|
|Allowed to import raw materials?||No||Yes||Yes||Yes||Yes||No||No||No|
|Allowed to export goods?||No||Yes||Yes||Yes||Yes||No||No||No|
|Accounting and tax|
|Corporate tax rate?||0%||3%||15%||Up to 0%||15%||0%||0%||0%|
|Statutory audit required?||No||No||No||No||No||No||No||No|
|Annual tax return to be submitted?||No||Yes||Yes||Yes||Yes||Yes||No||No|
|Access to DTAAs?||No||Yes||Yes||Yes||Yes||No||No||No|
|Issued share capital required?||US$1||US$1||US$1||US$100,000||None||None||US$1||US$1|
|Resident director/representative required?||No||Yes, 2||Yes, 1||Yes, 1||Yes, 1||Yes, 1||No||No|
|Business plan and financial projections required before registration?||No||Yes||No||Yes||No||No||No||No|
|Minimum number of directors?||1||2||1||1||1||1||1||1|
|Minimum number of shareholders?||1||1||1||1||1||1||1||1|
|Public register of shareholders and directors||No||No||Yes||Yes||Yes||Yes||No||No|
|Can the entity hire expatriate staff?||No||Yes||Yes||Yes||Yes||Yes||No||Yes|
|How long to get work permit approved||N/A||3 months||3 months||3 months||3 months||3 months||N/A||3 months|
|Fees and timelines|
|Estimate of engagement costs||US$10,785||US$18,600||US$11,415||US$12,365||US$10,485||US$10,535||US$15,450||US$16,450|
|Draft invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|