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How to Incorporate Company in Mauritius

Incorporate Company in Mauritius

Mauritius is situated in the Indian Ocean, approximately 800 km off the East Coast of Madagascar. Mauritius is considered to be one of the few countries which have a hybrid legal system which is based on English and French law. Mauritius is considered to have a middle-income diversified economy that has a capacity for growing industrial, financial, and tourist sectors. Incorporate Company in Mauritius has become a renowned offshore place for investors which offers a large number of financial and banking facilities.

What are the Market Opportunities?

Mauritius is the second largest investor in India. In terms of offshore opportunities, Mauritius, after its independence, has developed into a diversified economy that is growing in the fields of industrial, financial, and tourism sectors. The annual growth in these sectors varies from 5-6%, and is a progressive offshore jurisdiction. Mauritius has been able to capture more than 20,000 offshore entities in the past year, which shows its growing phase.

What are the Advantages of Incorporation of a Company in Mauritius?

Mauritius Company has certain advantages, such as:

  • Straightforward and simple process.
  • Takes lesser time to incorporate.
  • A requirement of only one director/shareholder.
  • Business can be conducted internationally.
  • An advantage of Mauritius’ double taxation treaties.
  • No capital gains or withholding taxes were levied.
  • No Inheritance tax, gift tax, or estate tax levied.
  • No limit to carrying forward tax losses

What types of Companies can be Incorporated?

There are four types of business corporations existing in Mauritius. Such as:

  • GBC 1- Resident Mauritius Company
  • GBC 2- International Business Corporation
  • Trust
  • Protected Cell Company
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GBC 1 Resident Mauritius Company:  the first category type of Company is the one which can only be made through a management company that is supposed to be approved by the Commission and is allowed to undertake business activity that is not illegal or against the public policy or which could cause prejudice to the good reputation of Mauritius. The license needs to be obtained by the companies intending to conduct financial or investment services.

The basic criteria of a GBC 1 company are

  • It shall have at least 2 directors who are residents of Mauritius
  • A principal bank account in Mauritius is to be maintained.
  • The company shall maintain and keep the accounting records at its registered office in Mauritius itself.
  • Prepare or possess its statutory financial statements and cause to propose such financial statements to be audited in Mauritius
  • The meetings of Directors should include at least two directors from Mauritius.

GBC 2 International Business Corporation: The GBC 2 type of entity is the one that undertakes activities other than those activities listed in their official schedule, such as Banking, financial services, carrying out the business of holding or managing, or otherwise dealing with a collective investment fund. There is a significant difference between GBC 1 and GBC 2 is that GBC 2 companies are exempted from the provisions of the Income Tax Act 1995 and are deemed to be nonresident in terms of tax purposes. GBC 2 provides great flexibility and is suitable for holding and managing private assets.GBC 2 is not allowed to raise capital from the public or to conduct any financial services.

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What will be the Incorporation Process?

The incorporation process is an easy step process that is standard and typically happens within a time frame of 1-2 weeks, depending on the information provided. There are a set of documents that are required to be submitted along with the application to the Registry. The Registry takes about 2-7 working days to process the incorporation process and produce the certificate of incorporation and open the bank account. Although it is often said that the Mauritius Company documents for incorporation are lengthy. The application submitted to the Registrar should have the details:

  • Proposed name of the Company
  • Whether the Company is limited or unlimited
  • Company shall be private or public
  • Proposed Registered office
  • Full name and address of the applicant
  • Full name and other details of the Director
  • Details of the Secretary of the Company

When the registrar is satisfied with the application of incorporation and that it is being properly complied with the Companies Act and payment of prescribed fees has been given. After this, the Registrar shall enter the particulars of the Company on the Registers and assign a unique number to the company in respect of the Company’s name and furthermore issue the Certificate of Incorporation in the prescribed form. The time taken for incorporation, along with the registration and licensing, depends on whether seeking for GBC 1 or GBC 2 and can take up to a week’s time.

What will be the taxation Aspect?

In Mauritius, under the Income Tax Act

1

 a GBC 1 type of Company I is liable at a uniform tax rate of 15%. A GBC 1 company is entitled to a foreign tax credit and can opt for claim credit for actual tax suffered in another jurisdiction so it makes an effective tax rate of 3% or nil in certain circumstances. GBC 1 company is controlled and managed and is a tax resident in Mauritius upon the written approval of the Commissioner of Income tax. There are benefits of double taxation treaties with Mauritius and other countries. The Income Tax (Foreign Tax Credit) Regulations 1996 allows a foreign tax credit on the foreign source income and provide in respect of foreign tax charged on the dividend, credit for the underlying tax charged in the foreign country on profits out of which the dividend is paid.

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Compliances

The following table describes the Compliances and Characteristics of Mauritius Company:

S. Nocharacteristics 
1Corporate LegislationThe Mauritius Financial Services Commission is the governing authority and Companies are regulated under the Companies Act 2008.
2ConfidentialityMauritius offers a high level of anonymity and privacy.
3Accounting requirementYes, accounts need to be maintained in the annual basis
4taxationNo taxes
5LegislationModern offshore legislation
6Standard currencyUS Dollar
7Time taken for formationMauritius being fast and time efficient takes about 3-4 days for incorporation
8Company SecretaryOptional
9Paid up capital requirementNo paid up capital requirement
10Legal system basisCivil Law
11Minimum number of DirectorsMinimum of 1 director
12Minimum number of shareholdersMinimum of 1 Shareholder
13Registered officeRegistered office has to be in Mauritius
14Bearer SharesBearer shares are not permitted
15Filing of Annual ReturnsNot required
16E-signature optionAllowed
17Directors, shareholders disclosure on public forumNo
18Re-domiciliation permittedYes

Conclusion

Mauritius is now considered as a premier international business center located in the Indian Ocean. Over the past 20 years, Mauritius has unprecedentedly achieved growth and socio-economic development has been achieved. Mauritius has been an incredible jurisdiction for offshore company formation offering a higher reliability and security to the investors through a flexible regulatory framework. The Mauritius Government actively encourages foreign investment and offshore activities through the board of investment. The government has introduced a wide range of incentives to attract foreign investment and consolidation of the legal and fiscal framework making it modern and friendly legislation attracting thousands of offshore entities.

References

  1. https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx

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