Business entities in Mauritius in 2022

For a smooth business set up process, Bejarano ADF Consultants Group PLC will cooperate with our preferred registered agent in Mauritius, licensed by the FSC to provide the services of a management company under Section 77(1) of the FSA.

Doing business from Mauritius with an offshore entity

The Mauritius Global Business Company (GBC)

• The Mauritius GBC 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 GBC 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 GBC 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;
• To benefit from reduced Mauritius corporate income tax, Mauritius GBC companies must meet the following substance requirements: i) investment holding companies (excluding IP): minimum local expenses of US$12,000 ii) Non investment holding companies: minimum local expenses of US$15,000 and at least 1 staff member in Mauritius (2 for entities with turnover above US$100 million annually) iii) Asset management companies minimum local expenses of US$30,000 and at least 1 staff member in Mauritius (2 for entities with turnover between US$100 million and US$500 million annually);
• Best uses for a Mauritius GBC: a GBC 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 a GB license, or the partners will be subject to Mauritius personal income tax on the income channeled through the entity. If a GB 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, GBC is a better choice 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 protected cell company

• The Mauritius protected cell company is an efficient strategy to hold high net-worth assets through its multi-class investment fund structure while preventing any risk spillage;
• Foreigners can either i) register their PCCs in Mauritius or ii) convert their existing company in Mauritius to a PCC following the Companies Act 2001 and Mauritius PCC Act;
• A PCC can benefit from i) a low tax rate of 0-3%; ii) network of DTAs signed by Mauritius; and iii) no minimum capital requirement;
• Best uses for a Mauritius PCC: Mauritius PCCs are widely used for asset holding, insurance business, external pension schemes as well as for financial businesses;

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;
• The most common types of trust structures in Mauritius includes i) Asset protection trusts; ii) Charitable trusts; iii) Discretionary trusts; iv) Trading trusts; v) Purpose trusts and vi) Unit trusts;
• Mauritius trusts can also apply for the Global Business License and enjoy the incentives from the network of DTAs signed by Mauritius;
• A Mauritius offshore trust is subject to an income tax of 15% only if i) the settlers or beneficiaries are non-residents or ii) the trust holds a Global Business License or iii) the trust is a purpose trust;
• 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

• The Mauritius international foundation is a combination of a trust and a company, enabling the founder to i) maintain control over the structure and ii) ensure its perpetuity;
• 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

Effective from 1 January 2019, the Mauritius government has replaced the Category 2 Global Business License (GBC2) company by the standard Global Business License (GBL) company. Further, the Category 1 Global Business License (GBC1) companies have been renamed as Global Business License (GBL) company.

Bejarano ADF Consultants Group PLC does not recommend our Clients establish a business in Mauritius, due to the poor business environment provided by the Mauritius Government and Financial Services Commission to multi-national organisations. Bejarano ADF Consultants Group PLC instead recommends our Clients establish their businesses in these reputable zero tax jurisdictions.