The Companies Act 2001 (1 Dec. 2001) replaces the Companies Act, No. 57 of 1984 (Offshore Companies or “Ordinary Status Companies”), the Mauritius Offshore Business Activities (MOBA) Act of 1992, and the International Companies Act 1994 (International Companies) creating unified regime for all companies in Mauritius. A company incorporated in the Republic of Mauritius has the same powers as a natural person.
There are two types of company used for international tax planning:
- GBC1 counts as resident for tax purposes and can take advantage of Mauritius network of double tax agreements, provided that it is correctly structured and that the seat of management and control is in Mauritius.
- GBC2 is similar to a British Virgin Islands International Business Company and counts as non-resident for tax purposes.
The language of legislation and corporate documents depends on the type of company. Legislation relating to GBC1 is in English and French, while that relating to GBC2s is in English only. The documentation for both GBC1s and GBC2s may be expressed in any language, but must be accompanied by a certified English translation.
The following restrictions apply to trading and business activity:
- GBC2 cannot trade within the Republic of Mauritius. The Ministry of Finance may allow GBC1 to engage in certain types of business in Mauritius.
- Only GBC1 can engage in banking or insurance or solicit funds from the public, provided that they hold a licence from the relevant authorities.
Incorporation procedure depends on the type of company.
GBC2s – incorporation involves submission of the Memorandum and Articles of Association and a Certificate from a registered agent confirming that the requirements of the Ordinance have been met.
GBC1s – once the name has been approved, three copies of the Memorandum and Articles of Association are submitted, together with notification of the first directors, secretary and location of the company’s registered office, and consent forms signed by its officers.
Off-the-shelf companies are available as GBC2s, but they are not available as GBC1s.
Company names are subject to the following requirements and restrictions:
- A company name can be in any language that uses the Latin alphabet.
- Any name that is identical or similar to that of an existing company, or any name that suggests the patronage of the president or government of Mauritius, is not permitted.
- The following names or their derivatives require consent or a licence: assurance, bank, building society, Chamber of Commerce, chartered, co-operative, government, imperial, insurance, municipal, royal, state, trust or any name which in the opinion of the Registrar suggests the patronage of the president or the government of Mauritius.
- A Company name must have a suffix denoting its limited liability: Limited, Corporation, Incorporated, Public Limited Company, Societe Anonyme, Societe Anonyme, Responsabilite Limitee, Sociedad Anonima, Berhad, Proprietary, Namloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or the relevant abbreviations.
Requirements regarding directors, company secretaries and shareholders:
- At least one director who may be a natural person or corporate body is required for both types of companies.
- For GBC1s wishing to obtain relief under double tax agreements directors residents in Mauritius are required. The directors of Mauritius companies need not be resident in Mauritius and may be of any nationality.
- An GBC2 may appoint a company secretary who may be a natural person or a body corporate, of any nationality and need not be resident in Mauritius. GBC1s require the appointment of a company secretary who must be resident in Mauritius.
- Both types of companies require a minimum of one shareholder.
Requirements relating to the share capital also differ for GBC2s and GBC1s:
- GBC2s – the normal authorised share capital is US$ 100,000 with all shares having par value. The minimum issued capital is either one share with no par value or one share with par value.
- GBC1s – the normal authorised share capital is US$ 1,000,000 with all shares having par value. The minimum issued share capital is two shares with par value.
The following classes of shares are permitted:
- GBC2s: registered shares, bearer shares, shares without par value, preference shares, redeemable shares and shares with or without voting rights.
- GBC1s: registered shares, preference shares, redeemable shares and shares with or without voting rights.
Annual Taxation and Fees
Taxation depends on the type of company:
- GBC2 – An International Company does not pay any tax on its world-wide profits to the Republic of Mauritius authorities.
- GBC1 – Companies pay a fixed annual licence fee of US$ 1,500 and one-off licence application fee of US$ 500 to the Financial Services Commission.
A new Income Tax Act was passed in 1995. This Act provides for uniform tax treatment for Offshore Companies registered after 30th June 1998 and local “incentive” companies, which are taxed at 15%. However, foreign tax credits are available that reduce the amount of Mauritian tax charged. Existing Offshore Companies were able to elect to pay tax at any rate between 0-35%, or opt for the new rate of 15%.
The Foreign Tax Credit Regulations (under the Income Tax Act 1995) that came into force on 20th July 1996 allow for foreign tax credit on the foreign income of a Mauritian resident. In calculating tax credits, the Regulations allow for the grossing up of the foreign-source income and, in respect of foreign tax charged on dividends, provide credit for the underlying tax charged in the foreign country on the profits out of which the dividend is paid. Additionally a long stop provision exists whereby a company that elects not to provide evidence of foreign tax benefits paid from a deemed tax credit pays tax at 3%. International companies (GBC2) are tax exempt but cannot avail themselves of double taxation relief under the tax treaties in force in Mauritius.
Mauritius has an extensive double tax agreement network that covers the following countries: Botswana, China, Germany, France, India, Indonesia, Italy, Kuwait, Luxembourg, Madagascar, Malaysia, Namibia, Oman, Pakistan, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, the UK and Zimbabwe. This makes it extremely attractive to invest in one of these countries through a Mauritius GBC1, as taxation agreements allow for profits to be withdrawn from the country either without tax or at a greatly reduced rate of withholding tax.
Licence fees also depend on whether the company is an GBC2 or GBC1:
GBC2 – US$ 135 per year to FSC, US$ 65 per year to the Registrar of Companies.
GBC1 – US$ 1,500 to the FSC, US$ 200 to the Registrar of Companies.
Requirements relating to financial statements differ for GBC2s and GBC1s:
GBC2 are required to maintain financial statements that reflect their financial position, but are not required to file accounts with the authorities.
GBC1 are required to prepare audited accounts that must be filed with the Mauritius Offshore Business Activities Authority.
Economy and Infrastructure
Mauritius is an agricultural and industrial country that depends on foreign capital investment. The main sectors of the economy are manufacturing, tourism, the growing, processing and export of sugar cane, tobacco, corn, manioc, potatoes, rice, bananas, aloe and vegetables (mainly tomatoes) and cattle breeding. The oil, diamond and electromechanical industries are also represented. Mauritius main foreign trading partners are the UK, France, Germany and Bahrain.
The currency is the Mauritian Rupee. There is no exchange control.