Company formation & Offshore Structures

Mauritius is the only business centre in the Indian Ocean offering an attractive package of fiscal incentives and a conducive regulatory framework which has gained international recognition as a credible financial hub. With the globalization of the world economy, investors are constantly looking for an appropriate jurisdiction for commercial reasons such as access to the network of Double Tax Avoidance Agreements, total exemption from exchange control, lower operating costs, availability of highly qualified professionals, and so on.

Global Business Companies are governed by the Companies Act 2001 and the Financial Services Act 2007. Such companies may be set up by direct incorporation or by way of continuation. They can also migrate out to other jurisdictions. The regulatory body for global businesses is the Financial Services Commission (FSC).

Global Business Companies are prohibited from dealing or transacting business with local residents or from holding immovable property in Mauritius. The two main types of corporate vehicles presently available to carry on an approved global financial activity from within Mauritius, are the:

• Global Business Company (GBC)
  
• Authorized Company (AC)

Qualified Activities

Double Taxation Treaties (DTA)
Mauritius has several double taxation treaties which are replicated on the OECD Model Treaty. Under the tax arrangements, tax sparing is available. Consequently, due to the current tax incentive provisions, any dividends sourced from Mauritius are therefore exempt from tax and as a result the foreign investor is entitled to a credit which is the notional amount of Mauritius tax against the tax due is therefore lessening his domestic tax liability.

Tax Treaties in force or under negotiation
Mauritius is a party to over 44 treaties which has been ratified. There are many other treaties that are currently being negotiated. One example, of a treaty that has been used widely, is the treaty Mauritius had with India. Mauritius, via this treaty, became the dominant channel for FDI in India. There is a series of updates, regarding this treaty with India, during the past years

Tax Treaty Benefits
Benefits from tax treaties are only available for resident entities or persons. Therefore, the liability of tax for a resident entity in Mauritius will be inherent under Mauritian Law by virtue of its domicile or residence. Mauritius has a multitude of structures available including the GBC and AC, the Société, and the Trust.

Consequently, a foreign entity or company, inclusive of the Global Business Company can take advantage or benefit from the tax treaty network. A Mauritian branch of a foreign entity can access the benefits derived from the tax treaties by meeting the conditions for residence. Furthermore, these related entities need to apply for a Tax Residence Certificate if they want to use the tax benefits under the treaties.

Unilateral Relief
It is interesting to note that a resident in Mauritius, deriving income from a foreign country, whereby there is no applicable tax treaty in place between Mauritius and that foreign country, will still receive a credit (relative to the foreign income) which can be used to offset any Mauritian income tax.

However, the credit is restricted on a source-by-source basis to the lesser of the 2 followings:

1. The foreign tax paid on the income concerned;
2. The Mauritian tax payable in the same income

 
Regarding foreign source dividends, there is no credit relief if granted for foreign corporate income tax borne on the profits out of which the dividends are paid (in result to the underlying tax)

For further information on DTA treaties please contact us and we shall be pleased to assist you.

In line with our internal control and procedures and in conjunction with FSC code on prevention of money laundering and terrorist financing, we shall conduct a customer due diligence on our clients (both individuals and corporates). A KYC review will be done sporadically to satisfy all the requirements as per the prevailing legislation, codes and guidelines. The KYC documents required on individual shall be: -

• A valid and certified passport copy;
• Bank reference letters (dated less than 3 months);
• Proof of residential address (dated less than 3 months); and
• Curriculum vitae (up to date).
  
  KYC documents will also be required on corporate entities, listed as follows: -
  
  
• Certified copy of the Certificate of Incorporation;
• Certified copy of the M&A;
• Certified copy of a Certificate of Incumbency (or registers);
• Certified copy of a Certificate of Good Standing;
• Certified copy of latest audited accounts;
• Certified passport copies on the principals;
  
• Proof of residential address on the principals