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Global Business

Global Business in Mauritius

Establishing a Global Business Company is a modern trend for many investors for the purpose of growing their business globally. It is increasingly being considered as the most appropriate vehicle for wide range of trading, investment and asset protection activities with the added advantage of international tax planning. Mauritius offers a comprehensive range of global business options to potential investors to meet their specific requirements and is one of the preferred jurisdictions for offshore investment.

The attractive fiscal regime remains the main reason for Mauritius being a jurisdiction of choice for offshore investment:

  • Low corporate tax
  • Vast network of Double Taxation Treaties
  • No capital gains tax
  • Tax free dividend
  • Free repatriation of profits, dividends and capital.

For any Applicant of Global Business to be approved it should first pass the test of conducting business outside Mauritius. There are different structures available for the setting up of an offshore company as further explained below.

Global Business Company – Category 2 (GBC 2)

Overview

A Category 2 Global Business Company (GBC 2) is a resident corporation conducting business outside Mauritius. It must at all times have the Management Company acting as Registered Agent in Mauritius. A Mauritius GBC2 takes on average 2-3 days to be incorporated. A GBC 2 is better for holding and managing private assets as it provides better confidentiality by structuring the shareholding through nominee shareholders, the beneficial owner only needs to be disclosed to the local agent and the bank (if a Mauritius bank account is required). The GBC 2 is non-resident for tax purposes and therefore is a tax exempt entity and cannot avail itself of the relief under the DTAs in force in Mauritius. Companies that are engaged in invoicing, marketing and international trading activities often use a GBC2 structure. There are some restrictions in terms of business that a GBC 2 can carry out and such a company is not allowed to conduct the businesses of company formation, administration, management nor can it provide professional nominee or trusteeship services. It cannot conduct business in Mauritius nor in Mauritian Rupees.

Key Features of a Mauritius GBC 2

 

GBC 2 Special Features

Type of corporate vehicle

A private company

Taxation

No corporate tax (Tax exempt)
No withholding tax on dividends, interest and royalties paid
No Capital Gains tax
No access to Double Taxation Avoidance Treaty

Director

One director allowed
Corporate director allowed
No requirement to have a Mauritian Resident Director

Shareholder

One shareholder allowed
Corporate shareholder allowed

Company Secretary

May or may not have a Company Secretary

Agent

Must at all times have the Management Company as Registered Agent

Meetings

Shareholders or directors meetings may be held anywhere

Constitution

May or may not have a constitution

Capital Requirement

No minimum capital requirement
At least one share must be issued and paid-up

Raising of Funds

Not allowed to raise capital from public

Holding of shares

May hold shares, debenture or any interest only in a corporation holding Category 1 or Category II Global Business License

Immovable Property

May not hold immovable property in Mauritius

Banking

May not hold any account in a bank in Mauritian currency

 

May open and maintain bank account in foreign currencies

Annual accounts

Financial summary to be filed annually with the Financial Services Commission No requirement to prepare audited financial statements

Access to records

No publicly accessible record of shareholders, directors or beneficial owners.

Activities not allowed for GBC 2:

  • Banking
  • Financial services
  • Holding or managing or otherwise dealing with a collective investment fund or scheme as a professional functionary
  • Provide registered office facilities, nominee services, directorship services, secretarial services or other services for corporations
  • Provide trusteeship services by way of business.

GBC 2 formation process:

The registration of a GBC 2 is a relatively quick and easy to follow process. It normally takes about 2-3 days for a GBC 2 company to be incorporated and for the registration of such a company you basically need to carry out the following:

  • Decide a suitable name for your company. We offer free services to check the availability of company name
  • Submit VA Global registration form with general information of your contact details and proposed business.
  • After validating your registration, we send you a list of documents we’ll require for this process and start preparing corporate documentation along with other necessary registration procedure required for your company formation.
  • After the successful completion of all the procedures, our offshore consultant will provide you with your company’s: Certificate of Incorporation as issued by the Registrar of Companies, Category 2 Global Business Company License as issued by the Financial Services Commission Company Register with share certificates, First Minutes, Constitution (if applicable) and any other relevant document based on the type of your company.

It takes an average of 2-3 days for the registration of a GBC 2

Global Business Company – Category 1 (GBC 1)

Overview

A GBC 1 can be in the form of a Trust, Sociéte and Partnership. A Mauritius GBC 1 is governed by the Companies Act 2001 and regulated by the Financial Services Commission. A GBC 1 is considered to be tax resident in Mauritius and is subject to corporate tax at 15%. However, a GBC 1 may claim a foreign tax credit in respect of the actual foreign tax suffered or 80% presumed tax credit, whichever is higher and this brings about for a GBC 1 to have a maximum effective tax rate of 3%. Other tax advantages for GBC 1 in Mauritius are that there is no capital gains tax and also no withholding tax on dividends, interest and royalties paid. The expanding network of DTAs has further reinforced Mauritius as a tax efficient jurisdiction and is also one of the prime reasons explaining the growing investment in GBC 1. Activities commonly undertaken by a GBC 1 requiring no specialized license are Investment Holding, Trading and International Consultancy and it normally takes an average of 3-4 weeks to incorporate a GBC 1 with such standard activities.

Key Features of a Mauritius GBC 1

 

GBC 1 Special Features

Type of corporate vehicle

A public company
A private company
A foreign company (i.e. branch of a company established in a foreign jurisdiction)

Taxation

Only 3% as corporate tax if well structured
Access to Double Taxation Avoidance Treaty
No withholding tax on dividends, interest and royalties paid
No Capital Gains tax

Director

Needs to have at least 2 Resident Directors

Shareholder

One shareholder allowed
Corporate shareholder allowed

Company Secretary

Must at all times have the Management Company as Company Secretary

Agent

Must at all times have the Management Company as Registered Agent

Meetings

All shareholders and directors meetings must be held from the company’s registered office address in Mauritius

Constitution

May or may not have a constitution

Capital Requirement

No minimum capital requirement for GBC 1 not requiring any specialized license

Raising of Funds

May involve capital raising from public

Holding of shares

Must not hold shares, debenture, security or any interest in a local company

Immovable Property

May lease, hold, acquire or dispose of immovable property or any interest in immovable property situated in Mauritius

Banking

May open and maintain an account in Mauritian currency with a local bank May open and maintain with a bank an account in foreign currencies

Annual accounts

Required to file annual audited financial statements with the Financial Services Commission

Access to records

No publicly accessible record of shareholders, directors or beneficial owners.

Tax Resident Certificate

For tax residency purposes, a GBC 1 must be centrally managed and controlled from Mauritius. Tax Residency Certificate for a GBC 1 is issued by the Mauritius Revenue Authority and such a certificate is valid for a period of one year and can be renewed annually. To be eligible for a Tax Residency Certificate, a GBC 1 must satisfy certain conditions:

  • The Company shall at all times have at least two resident directors in Mauritius and the resident directors shall always be of appropriate calibre who can exercise independence of mind and judgement;
  • The company shall at all times maintain its principal bank account in Mauritius;
  • The Company shall at all times keep all its accounting records at its registered office in Mauritius;
  • The company shall prepare its statutory financial statements and cause such financial statements to be audited in Mauritius;
  • The company shall provide for meetings of directors to include at least 2 directors from Mauritius.

GBC 1 formation process:

The registration of a GBC 1 proposing to engage in standard activities like Investment Holding, International Consultancy or Trading and which does not require any other special license, normally takes about 2-3 weeks to be registered. Compared to a GBC 2 registration, that of a GBC 1 requires some more documentation but still the process remains easy to follow.

  • Decide a suitable name for your company. We offer free services to check the availability of company name
  • Submit VA Global registration form with general information of your contact details and proposed business.
  • After validating your registration, we send you a list of documents we’ll require for this process and start preparing corporate documentation along with other necessary registration procedure required for your company formation.
  • After the successful completion of all the procedures, our offshore consultant will provide you with your company’s: Certificate of Incorporation as issued by the Registrar of Companies, Category 1 Global Business Company License as issued by the Financial Services Commission Company Register with share certificates, First Minutes, Constitution (if applicable) and any other relevant document based on the type of your company.

Global Business Company – Category 1 (GBC 1) with specialized licenses

Mauritius Global Funds

The sole business of a Mauritius Global Fund is the collective investment of funds in a portfolio of securities so as to spread the risk of the investment, the holder of the securities must be able to gain from the results of the investment minus any commission or fees due. A fund can either be a close-ended fund where the share capital is fixed or an open-ended fund where the share capital may be varied. Global Fund (Investment Fund) companies in Mauritius are usually established as GBC1 companies and are then regulated in their function as an investment business by the 2005 Securities Act. The FSC must give approval for the company to be licensed as an investment company, for this approval to be given the central administration of the company must be based in Mauritius. The company must have a local administrator, a local independent custodian and a local auditor. The accounts must be kept and accounting documents available in Mauritius, the principle office must be kept in Mauritius, the issue and redemption of shares must be carried out in Mauritius and the NAV calculation must also be carried out in Mauritius. Additionally, the FSC must satisfy itself of the funds structure and objectives, the track record and credentials of the promoters, the investors and markets targeted, types of investment the fund will be dealing in, the track record of the investment manager, independent custodian and the administrator.

The Protected Cell Company (PCC)

Mauritius approved the Protected Cell Company Act 1999 (amended 2000) and came into force in January 2000. The PCC allows companies with a Category 1 Global business License to create ‘cells’ for the purpose of segregating and protecting assets of one cell against failure of another cell. The principle legal characteristic is that the portion of capital designated to a specific cell is neither liable for the general obligations, commitments or liabilities of the corporation nor for the specific liabilities of the other cells. This allows additional opportunities, flexibility and security for international investment structuring especially for an entity with various investment portfolios where each has its own investment strategy and risk profile. Ordinary shares are issued to control the core, these include voting shares. Cellular shares are issued relating to individual cells, these shares have no voting rights, The connection between the named cellular shares and cells to which they are related is set out in the Memorandum and Articles of Association of the PCC. The PCC will have a board of directors. Separate accounting must be conducted for each cell. VA Global Business Limited can discuss the benefits of a Protected Cell Company for your individual requirements, set up the structure for you and deal with all ongoing statutory requirements.

Captive Insurance Business

Established as a risk management technique, Captive insurance companies are companies established with the sole purpose of insuring the risk emanating from their parent group. A Captive Insurance company must be a Category 1 Global Business License company (GBC1) licensed by the Financial services commission. A license is then required to conduct the captive business, The captive insurance company will need to appoint a licensed management company and a representative accountable to the commission. VGB can arrange all of this for you. To gain the license the FSC will need to see audited financial statements, a certificate of margin of solvency, a certificate of liquidity ratio, an actuarial valuation of adequacy of premiums and loss reserves for long term business, a declaration from the principle representative as to the accuracy of accounts. The incorporation procedure requires an application to the commission and a certificate from a law practitioner in Mauritius to say that the company complies with the laws of Mauritius.

Investment Adviser/Dealer License

The Investment Adviser and Dealer licenses as issued by the Financial Services Commission in Mauritius are getting increasing popularity among many of the Brokerage Houses worldwide. Application for Investment Adviser/Dealer license must be made under a Category 1 Global Business Company and license is granted subject to the approval of the Financial Services Commission. The Securities Act 2005 coupled with the the Securities (licensing) Rules 2007 remain the main legal framework governing the provisions and setting the parameters within which a GBC 1 with an Investment Adviser/Dealer license can operate. There are different categories of Investment Adviser/Dealer license and Securities (licensing) Rules 2007 clearly set out the activities authorized to be carried out under each category:

Type of License

Authorised to

Investment Dealer
(Full Service)
Can be with or without underwriting

Act as an intermediary in the execution of securities transactions for clients;
Trade in securities as principal with the intention of reselling these securities to the public;
Underwrite or distribute securities on behalf of an issuer or a holder of securities;
Give investment advice which is ancillary to the normal course of his business activities; and
Manage portfolios of clients

Investment Dealer
(Broker)

Execute orders for clients;
Manage portfolios of clients; and
Give advice on securities transactions to clients

Investment Dealer
(Discount Broker)

Execute orders for clients without giving advice
 

Investment Dealer
(Commodity Derivatives Segment)

Act as broker in Commodity Derivatives only
 

Investment Dealer
(Currency Derivatives Segment)

Act as broker in Currency Derivatives only
 

Investment Adviser
(Unrestricted)

Manage, under a mandate, portfolios of securities; and
Give advice on securities transactions through printed materials or any other means

Investment adviser
(Restricted)

Give advice on securities transactions through printed materials or any other means
 

 

Payment Intermediary Services

The Payment Intermediary Services License is of interest to those who wish to operate as an online Payment Service Provider (PSP). The PSP business model is becoming more of a norm in the current business environment to address the ever-increasing need of both online shoppers and online sellers to do business via the internet. The Payment Intermediary Services License can only be applied for under a Category 1 Global Business Company and needs the approval of the Financial Services Commission for a GBC 1 to obtain such a special license. One of the licensing conditions is that the company must maintain an unimpaired capital of at least MUR 500,000 or its equivalent. With a Payment Intermediary Services License, the GBC 1 can offer merchant online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time transfer based on online banking. The main customer base is often composed of online merchant sellers.

Other Specialised Licenses

With its aim to promote the development and efficiency of the financial institutions and capital markets in Mauritius, the Financial Services Commission is constantly reviewing the activities authorized for a Global Business Company and the related licenses so as to better meet the current market requirements of the global business partners. Over the years, the Financial Services Commission in Mauritius has developed a comprehensive array of specialized Global Business Licenses, more specifically for those operating as a Category 1 Global Business Company. Excluding the above, to mention a few of the popular licenses:

  • Assets Management
  • Distribution of Financial Products
  • Pension Fund Administrators
  • Treasury Management
  • Custodian Services
  • Credit Finance
  • Factoring
  • Leasing
  • Credit Rating Agencies
  • Other Financial Business Activity

Mauritius Trust

A Trust company is most commonly set up as part of a long term wealth management strategy, helping to preserve wealth through the generations without the problems usually created by taxation, probate requirements, succession laws, expropriation and foreign exchange controls. All Mauritian Trusts are governed by the Trust Act 2001. A Trust allows the holding and administration of property under which property or legal rights are vested by the owner of the property (the Settlor) in a person or persons (the Trustees). The Trustees then hold the property for or on behalf of those the trust benefits (the Beneficiaries). The main objective behind the trust structure is the separation of legal and beneficial ownership whereby the property is legally owned by the trustees but is held and administered for and on behalf of specified beneficiaries. It is the obligation of the Trustees to meet the terms of the Trust. A Mauritian Trust can be established without the disclosure of the Beneficiaries or Settlor details to the authorities, no register of trusts is maintained in Mauritius. The deliberations of the Trustees also remain private. A trust is liable to income tax at the rate of 15%, however with the use of foreign tax credits (through the Double Taxation Agreement Network) this can be reduced or even made tax-exempt. Any tax-resident trust needs at least one trustee resident in Mauritius, must have a bank account maintained in Mauritius that all cash is routed needs to keep accountancy records with the local trustee. The trust must be created in writing stating its objective, subjective, intentions, duties and the powers of the Trustees. The proper law of the trust will be the one chosen by the Settlor or the one implied in the trust deed.

Mauritius Redomiciliation

A Company incorporated under the laws of any country other than Mauritius, may, where it is so authorized by the law of that country, apply to the Registrar to be registered as, and continue as, a company in Mauritius as if it had been incorporated in Mauritius. There are various reasons why a company would want to redomicile to Mauritius, including taking advantage of the existing attractive taxation system, the reliable infrastructural facilities and a wide array of reputable and regulated financial services. Once re-domiciled, the company is treated as a company ordinarily resident and domiciled in Mauritius. As company structure options, re-domiciliation to Mauritius can be in the form of a Category 1 Global Business Company or a Category 2 Global Business Company. Two of the main redomiciliation requirements are that firstly the company is authorised to transfer its incorporation under the law of the country in which it is incorporated and secondly the company has complied with the requirements of that law in relation to the transfer of its incorporation. There are also some restrictions as far as redomiciliation to Mauritius is concerned and situations which may disqualify companies from registering as, and continuing as a company in Mauritius, are:

  • The company is in the process of winding up or liquidation;
  • A receiver or manager has been appointed, whether by a court or not, in relation to the property of the company; or
  • There is a scheme or order in force in relation to the company whereby the rights of the creditors are suspended or restricted.