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Banking Services
International banks may establish banking companies in Mauritius either as locally incorporated companies or as branches of overseas companies. Profits arising from non-resident clients segment attract a lower effective rate of taxation of 5%.
Mauritius has a simplified licensing procedure and has no restriction on repatriation of profits. Banking secrecy is strictly observed within the framework of the Banking and the Financial Intelligence and Anti-Money Laundering Acts.
The excellent telecommunication system enhances the efficiency with which international banking operations are carried out from Mauritius.
Offshore Funds
Mauritius is recognized as a leading regional centre for offshore fund structuring and administration, for investment particularly in Indian, Asian, Middle East and African countries. The Companies and Securities Act and Rules permit establishment of open and closed ended schemes, retail, professional, hedge and venture capital funds. Unit trust and partnership schemes and foreign recognized schemes may be registered in Mauritius. Funds may also be established as protected cell companies, the benefits of which are described below.
Government encourages the setting up of local fund management and advisory companies. Low cost professional and administration support combined with treaty benefits enable efficient operation of funds from Mauritius.
Insurance Companies
Owing to tax incentives offered, quick registration procedures, low running costs and a well developed infrastructure, Mauritius is especially suitable for the establishment of offshore captive insurance and reinsurance companies.
A captive insurance company can either be:
- a wholly owned or controlled subsidiary of an industrial or commercial group established for the purpose of participating in the risks of the group, or
- an association of unrelated companies or individuals with the aim of insuring their risks.
Protected Cell Companies (PCC) Special legislation permits segregation of assets and related liabilities within a company into cells and limits the claim of a creditor against assets of the cell it has contracted with. This overcomes the problem encountered with an umbrella fund company whereby the excess liabilities of a sub-fund can be set-off against the assets of the entire company. The ring-fencing of claims is possible for offshore funds, captive insurance companies and investment holding companies. The PCC also simplifies administration and reduces costs of operation.
Shipping Companies
Mauritius was an automatic landing choice for sea travellers between South Africa and Asia. It has a rich nautical history. Present day shipping activities include ship owning, bare-boat chartering and the operation of ships in international waters. Vessels of any type may be registered in the Mauritian Register of Ships. Registration may be initially provisional, permanent or parallel. Mortgages in the British current account style, may be registered with the Registrar of Mortgages.
Owing to competitive registration costs, low annual fees, flexible regulations, international relations of Mauritius, free movement of foreign currency and a nil tax rate, ship-owning companies will find in Mauritius a highly beneficial location for a flag.
Trusts
Mauritius offers an ideal legislative framework and conditions for the creation of trusts and their administration. They are governed by the Trusts Act 2001. Trusts do not require registration thus providing absolute confidentiality. Trusts can be used to:
- safeguard assets against bankruptcy if timed carefully;
- achieve an orderly distribution of the settlor's assets after his death, including the holding of assets for minors until they reach majority;
- rearrange beneficial ownership of assets;
- avoid inheritance laws in the country of residence;
- accumulate income and protect assets;
- manage pension funds and investments generally
- provide for charitable giving.
Holding and Management Companies
Mauritius can be an excellent centre to form and operate holding structures. Holding and investment companies may be used advantageously in conjunction with Mauritian double tax treaties, in view of the nil or low withholding tax rates on interest and dividends provided for in the treaties. Most treaties also avoid capital gains tax in the country of investment.
An offshore holding company can be the parent company for companies registered abroad as well as Mauritian registered global business companies.
Trade Invoicing and E-Commerce Companies
Where the business consists of buying goods or services in one country and selling them in another, invoicing companies can be useful because they offer:
- the possibility of tax free accumulation of funds;
- a convenient administrative base and a means of trading with areas of political or financial instability;
- substantial savings in labour and tax through the employment of specialists overseas.
Such companies can also be used for transit trade activities in combination with the freeport zone which is operational in Mauritius.
Property Companies
The use of a global business company for investment in property can be highly beneficial depending on the jurisdiction in which such property is located. Such use can, inter alia, avoid:
- capital taxes on subsequent sale;
- inheritance tax or death duties which would arise if the property was held directly by an individual;
- the need to obtain probate.
Services Companies
These companies may provide services such as sales promotion, debt collection, treasury management, accounting functions, consultancy work, recruitment, etc. They may employ expatriate staff who benefit from double tax treaty provisions by paying tax in Mauritius at low rates.
Royalties Companies
Owing to the low or nil rate of withholding for royalties provided in most of the Mauritian double tax treaties, establishing a royalty company in Mauritius can also prove very attractive.
The Mauritius Copyright Act provides legal protection for any original work created, written down or recorded in Mauritius. The protection is extended to all countries which are signatories to the Berne Convention.
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