Focus Word – Incorporation in Mauritius
Incorporation in Mauritius is a viable option for companies looking to be strategic about their corporate affairs. Mauritius is a politically stable country and the largest international financial and business hub in the Indian Ocean region. It is often referred to as the “Gem of the Indian Ocean” because of its strong liberal economy, reputable banking system and a wide offer of qualified professional services. The country’s flexible regulatory framework provides reliability and security for the incorporation of international companies.
The Mauritian Government actively encourages foreign investment and offshore activity through the Board of Investment and the government has introduced wide ranging incentives to attract foreign investment and consolidation of the legal and fiscal framework has resulted in modern, user-friendly legislation that has contributed to the rise of Mauritius as a major offshore financial service center. There are a few questions
CAN A FOREIGNER START A BUSINESS IN MAURITIUS?
Yes, foreign individuals or corporate entities are allowed to register their businesses in Mauritius.
WHAT ARE THE FORMS OF COMPANIES REGISTRABLE IN MAURITIUS?
There are several forms of companies registrable in Mauritius. They include:
Mauritius Private Company Limited by Shares
Mauritius Company Limited by Guarantee
Mauritius Public Company Limited by Shares
Mauritius Foreign Company
Mauritius GBC1 Company – Resident Company
Mauritius GBC2 – International / Offshore Company
Mauritius Limited Life Company
Mauritius General Partnership
Mauritius Limited Partnership
For the purpose of proper tax planning and benefiting from Mauritius as a foreigner, foreign companies are usually registered either as a Mauritius GBC 1 company or Mauritius GBC 2 company.
WHAT IS THE MEANING OF OFFSHORE COMPANY?
Offshore Companies are also known as GBC2 Companies in Mauritius. They are private entities that conduct business outside Mauritius. An offshore company may be a locally incorporated company or registered as a branch of a foreign company. Confidentiality is a major benefit to an offshore company and the identity of the beneficial owner can remain largely confidential.
HOW DO I INCORPORATE A COMPANY OR SET UP A COMPANY IN MAURITIUS?
Incorporating a company in Mauritius is a simple, straightforward process regardless of whether you choose to register a Resident Company also known as GBC1 or an Offshore Company otherwise known as GBC2.
Incorporation of companies can either be effected online or by submitting the required documents at the office of the Registrar of Companies. Online incorporation is carried out through the Mauritius Network Services using the following the link here.
Any person who wishes to incorporate a company in Mauritius should ensure that the name is available prior to incorporation. Name availability search is free. Afterwards, the applicant can proceed to fill the prescribed Form 1 - Application for incorporation of a company and submit it to the Registrar of Companies together with any of the necessary following forms:
Form 7 - the consent of every director of the proposed company (Note that a company is only required to have a minimum of one director and at least one director should be resident in Mauritius);
Form 8 - (if applicable) – the consent of every secretary of the proposed company; and
Form 9 - the consent of every shareholder of the proposed company.
The following documents should be submitted when applying for incorporation:
Original Copy of Certificate of Reservation (if any);
Photocopy of Passport for non-residents;
Copy of residence permit if the only director is a foreigner;
Proof of director’s address (Ex: Utility Bill); and
Proof of address of secretary in case of a one-person company.
Where the application for incorporation in Mauritius complies with the law and the prescribed fees has been paid, the Registrar will issue a Certificate of Incorporation and enter the particulars of the company on the Register give to the company a unique company number.
For the incorporation of a Company holding a Category 1 or 2 Global Business License (GBC 1 and 2), the incorporation is only effected after approval is received from the Financial Services Commission.
ADVANTAGES OF INCORPORATION IN MAURITIUS
There are a number of benefits attached to incorporating a Resident Company (GBC1) and an Offshore Company (GBC2) in Mauritius. The features and advantages of each of these companies are summarily discussed below:
Resident Company Incorporation in Mauritius
As stated earlier, this is also called GBC1. The advantages of its incorporation in Mauritius are as follows;
Requires a minimum of one Director who must be a natural person.
A minimum of one Shareholder is required who can be of any nationality and need not be resident in Mauritius. Corporate Shareholders are permitted.
A resident Company Secretary is required.
Business can be conducted internationally.
GBC1 Companies are regarded as being resident therefore are able to take advantage of the Mauritian Double Tax Treaties. The tax treaty is particularly favorable with India and Mauritius has become a popular location for holding companies for those trading or investing in India.
GBC1 companies can utilize the unilateral foreign tax credit which stands at 80% of the Mauritian Tax Rate, which leaves a residual liability of 20% of the Mauritian rate which is equal to 3%.
No Capital Gains or withholding taxes levied.
No limit on the carrying forward of tax losses.
No Withholding Tax on dividends, interest, royalties and payment of redemption proceeds.
Entitled to underlying tax credits on dividends if shareholding in Investee Company is greater than 5%.
Interest received on deposits in Mauritian bank accounts are tax exempt.
Inheritance tax, gift and estate taxes are not applicable.
No stamp duties, registrar duties or levies.
A branch of a foreign company may also have access to the tax treaty network provided that the local authorities are satisfied that effective management and control of the foreign branch is in Mauritius.
Offshore Company Incorporation in Mauritius
As stated earlier, this is also called GBC2. The advantages of its incorporation in Mauritius are as follows;
High degree of privacy protection (through the use of nominee Directors and shareholders).
Mauritius company formation permits 100% foreign ownership meaning no local nominee is required.
Only one Director and one Shareholder required.
Legal tax exemption for GBC2 Companies but no access to the Mauritian Double Taxation Treaty allowed.
No accounting or reporting requirements which minimize maintenance costs.
GBC2 companies enjoy limited liability without any paid up capital (there is no minimum capital required).
No Withholding Tax on dividends.
No Capital Gains Tax.
No Stamp Duty on transfer of shares.
Free repatriation of earnings.
Migration from a foreign company to/from Mauritius is permitted.
Shareholders and Directors can meet anywhere.
Registered office and agent in Mauritius is required.
Conversion to GBC1 is permitted.
MAURITIUS COMPANY REGISTRATION COST.
The official fees for registering a company in Mauritius depends on the type of company being registered. The fees for private companies is Rs 3000; the fees for registering public Companies is Rs 13500 while the registration fees for GBC 2 companies is USD 65.
TIMELINE FOR REGISTERING A COMPANY IN MAURITIUS.
It takes about two (2) weeks to register a resident company (GBC1) in Mauritius, and about four (4) weeks to register an offshore company (GBC 2).
WHAT IS SMEDA MAURITIUS?
SMEDA means Small and Medium Enterprises Development Authority. It is an agency of the Mauritian Government that aims at supporting and facilitating the development of entrepreneurship and SMEs in Mauritius.
WHAT IS SMEDA ITS ROLE AND FUNCTIONS IN MAURITIUS?
SMEDA sensitizes the population, through workshops and seminars organized throughout the country about the benefits of entrepreneurship, the key issues/steps to consider and, procedures to follow when starting a business, facilities and resources provided by the SMEDA and other support institutions as well.
The SMEDA works in collaboration with the Development Bank of Mauritius (DBM) to offer some financing aid to SMEs. The DBM is the bank through which the Government provides finance at lower costs to SMEs.
This is the Companies and Business Registration Integrated System. It enables government services to be more efficient.
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