Mauritius has established itself as an important financial hub for investment in Asia and Africa. The island with just over 1.3 million inhabitants is known for its transparency, good governance and ethical procedure, as well as safe, dependable and secure transactions. Further to the World Bank Doing Business Report 2019, Mauritius has joined the top 20 economies this year (the only Sub-Saharan African economy to do so and no 1 in Africa). Listed companies on the NYSE, Euronext, LSE, NASDAQ etc. are using Mauritius as a platform going into Africa and Asia and/or for optimization of tax.
This has been possible due to several safeguards. Principles of corporate governance essentially involves balancing the interests of a company and many stakeholders, such as shareholders, senior management executives, customers, suppliers, the government, and the community. The latest Code on Corporate Governance for Mauritius dates back to 13 February 2017. The Code comprises a set of principles and guidance aimed at improving and guiding the governance practices of organizations within Mauritius.
The legal system of Mauritius is well established and has its composite roots in the French Napoleon Code (civil law) and the British legal framework (common law). It is a blend of the French and British laws coupled with the law of evidence which is based on the United Kingdom adversarial system, thus offering the right combination of rules for a swift and secure dispense of justice.
There is a principle whereby an individual who fails in his obligations towards another party becomes liable for the prejudice caused by his actions and has to compensate the latter by way of damages (Article 1382). Each individual is responsible for the damages resulting, not only from his own actions, but also from his negligence and imprudence (Article 1383). Examples of such ‘responsibilities’ can be found in all fields such as political, ministerial, administrative, penal and civil.
 Article 1382 “ Tout fait quelconque de l’homme, qui cause à autrui un dommage, oblige celui par la faute duquel il est arrivé, a le réparer.”
 Article 1383 “ Chacun est responsable du dommage qu’il a causé non seulement par son fait, mais encore par sa négligence ou par son imprudence.”
1. Business Formation and Regulation
Business Structure in Mauritius under the Companies Act 2001:
- Domestic Companies
There are five types of domestic companies that can be incorporated in Mauritius-
- Company limited by shares: These companies are formed on the principle of having the liability of its shareholders limited by its constitution to any amount unpaid on the shares respectively held by the shareholder.
- Company limited by guarantee: These are companies formed on the principle of having the liability of its members limited by its constitution to such amount as the members may respectively undertake to contribute to the assets of the company in the event of it being wound up.
- Company limited by shares and guarantee: These are companies formed on the principle of having the liability of its members who are shareholders, limited to the amount unpaid, if any, on the shares respectively held by them; and who have given a guarantee, limited to the respective amount they have undertaken to contribute, from time to time, and in the event of it being wound up.
- Unlimited company: A company formed on the principle of having no limit placed on the liability of its shareholders.
- Limited life company: These companies are usually set up for offshore funds.
A company may either be public or private-
- i. Public Company:
- may offer to sell its shares to the public; and
- has more than 25 shareholders.
- ii. Private Company:
- should not have more than 50 shareholders;
- cannot make offers to the public to subscribe for its shares;
- may impose restrictions on the transfer of shares;
- may dispense with holding of shareholders’ meetings, where everything required to be done at that meeting, by resolution or otherwise, is done by resolution; and
- may remove a director by special resolution subject to constitution.
- Small private companies
Small private companies have a turnover of less than Rs 50 million (fifty million) Mauritian Rupees or such other amount as may be prescribed in respect of its last preceding accounting period. They do not hold a Global Business License and there is no obligation to have company secretaires.
- Dormant companies
A company shall be considered a dormant company when for any period no significant accounting transaction has occurred in relation to the company. This excludes the issue of shares, payment of bank charges, licenses fees and other compliance costs.
- Foreign companies
Provision is made for an entity which has been created abroad and which has a place of business or is carrying on business in Mauritius. A company incorporated in Mauritius can be 100% foreign-owned and there is no minimum capital requirement. It costs only USD$100 (one hundred dollars) to set up a domestic company in Mauritius and incorporation of a company in Mauritius can be achieved within two hours. The company must also have Mauritian Directors and a physical address in Mauritius.
- Global business companies:
Previously known as GBC 1, a global business company is a resident corporation whose majority of shares or voting rights, or the legal or the beneficial interest held or controlled by a person who is not a citizen of Mauritius conducting or proposing to conduct business principally outside of Mauritius must apply for the GBC. A GBC is subject to the new requirement of core income-generating activities at all times carried out in Mauritius by employing, either directly or indirectly, a reasonable number of suitably qualified persons to carry out the core activities and having a minimum level of expenditure which is proportionate to its level of activities in addition to existing enhanced substance requirements as follows:
- be managed and controlled from Mauritius; and
- be administered by a management company.
The time frame for incorporation is one month. In order to issue a GBC License, the Financial Services Commission of Mauritius (FSC) considers whether the company has substance in Mauritius through its management and control. The following substance requirements are considered:
- shall have or has at least two directors resident in Mauritius;
- shall maintain or always maintains its principal bank account in Mauritius;
- shall keep and maintain or always keeps and maintains its accounting records at its registered office in Mauritius;
- prepares or proposes to prepare its statutory financial statements and causes or proposes to have such financial statements to be audited in Mauritius; and
- provides for all meetings of directors to include at least two directors from Mauritius.
The Company must meet, at all times, the following additional pre-defined substance requirements:
- carry out its core income generating activities in, or from, Mauritius by:
- employing either directly or indirectly a reasonable number of suitably qualified persons to carry out the core activities; and
- having a minimum level of expenditure, which is proportionate to its level of activities
- be managed and controlled from Mauritius; and
- be administered by a Management Company.
Indicative Minimum Annual Expenditure in Mauritius
Minimum Annual Expenditure (USD$)
Investment Holding (excluding Intellectual Property rights)
Specific Taxation Arrangements for GBCs
Effective as from January 2019, the current deemed Foreign Tax Credit regime available to GBC1 companies have been abolished. There was an introduction of an 80% exemption regime on the following income, subject to meeting the above pre-defined substance requirements. The following points are also key:
- foreign dividend, subject to amount not allowed as deduction in source country;
- foreign source interest income;
- profit attributable to a permanent establishment of a resident company in a foreign company;
- foreign source income derived by a Collective Investment Scheme (CIS), Closed End Funds, CIS manager, CIS administrator, investment adviser, or asset manager licensed or approved by the FSC; and
- income derived by companies engaged in ship and aircraft leasing.
There is also a minimum government fee (excluding taxation) of US$ 1,950 (one thousand, nine hundred and fifty) to FSC and US$ 325 (three hundred and twenty-five) to Registrar of Companies. The following transitional period is available to existing GBC1 companies:
GBC1 License issue date
On or before 16 October 2017
Grandfathered up to 30 June 2021
After 16 October 2017
Grandfathered up to 31 December 2018
- Authorized companies
Previously known as GBC2, the Authorized company has replaced GBC2 and is deemed as “non-resident” for tax purposes, and thus is not subject to income tax in Mauritius. An Authorized Company is also similar to a British Virgin Island International Business Company which is non-resident for tax purposes. They are required to have at least one director and a company secretary. Other major features include:
- An Authorized Company cannot trade within the Republic of Mauritius. The company must be controlled by a majority of the shareholders with beneficial interest who are not citizens of Mauritius and the company must have the place of effective management outside of Mauritius;
- A company incorporated in the Republic of Mauritius has the same powers as a natural person;
- A suffix is not required to denote the limited liability status;
- The usual authorized share capital is USD$ 100,000.00 (one hundred thousand) with all of the shares having a par value;
- Classes of Shares Permitted: registered shares, preference shares, redeemable shares and shares with or without voting rights;
- No tax on its world-wide profits to the revenue authority in Mauritius; and
- US$ 150 (one hundred and fifty) on incorporation for license processing fees.
First Annual License fees for the period from the date of incorporation until the following 30th June is US$ 75 (seventy-five) per month. An Annual License Fee of US$ 350 (three hundred and fifty) to the FSC, is also payable by the 30th June of every year.
In addition, Authorized Companies are required to maintain financial statements to reflect their financial position with the Registered Agent and with the authorities. Annual return (return of income) must be filed with the tax office (MRA).
The Incorporation process/requirements are as follows:
- submission of the Constitution and a Certificate from the Registered Agent confirming compliance with the requirements of the Ordinance;
- the application must be supported by a Legal Certificate issued by a local lawyer certifying that local requirements have been complied with; and
- Directors and shareholders must execute consent forms and these must be filed with the Registrar of Companies.
Partnerships, also sometimes referred to as “societies”, are regulated by the Mauritian Civil Code and the Mauritius Code de Commerce. They are an association of two or more people created for a specified purpose, and they have a lifespan of 99 years.
Limited partnerships are business structures, where two or more partners have agreed to carry any lawful business in Mauritius or from within Mauritius with persons outside Mauritius or both in Mauritius and from within Mauritius with persons outside Mauritius with a view to make profits. Partnerships are governed by the Limited Partnerships Act 2011 and the Limited Liability Partnerships Act 2016.
Trusts are entities where the trustees own and manage the trust property on behalf of the beneficiaries of the trust. As opposed to many other business structures, there is no legal obligation for a trust to be registered. There are different kinds of trusts: purpose trusts, charitable trusts, discretionary trusts and so forth. The life span of a trust is 25 years although charitable trusts may be perpetual. Trusts are governed by the Trusts Act 2001 in Mauritius.
- Protected Cell Companies (PCC)
A PCC is a special purpose vehicle which allows for the segregation of the assets owned by each cell of a company. PCCs are governed by the Protected Cell Companies Act 1999 and the Companies Act. They cater for businesses such as insurance, collective investment schemes and asset holding. PCCs can have different layers of cells within the same structure. Each one of the cells has its own distinct name or designation. Even though a cell is legally independent from the others, it is not a legal entity and is therefore created within the PCC. This is precisely why PCCs are liable to taxation as a single entity.
A Foundation is an entity governed by the Foundations Act 2012. A Foundation shall not have legal personality unless it is registered and has been issued with a certificate of registration by the Registrar of Companies (which is also the Registrar of Foundations). As compared to trusts, foundations provide administrative flexibility. All foundations are required to have a secretary which shall be a management company or who shall be such other person resident in Mauritius as may be authorised by the Commission.
 Section 117 of the Companies Act 2001
Incorporation of businesses in Mauritius is regulated by the Registrar of Companies.
We have attempted a summary of the process below:
- The incorporation process begins with ascertaining the availability of the proposed name of the Company at the Registrar of Mauritius.
- After the approval of the name, it is possible to reserve the company name for one month subject to the payment of a certain fee. Once the name has been approved, you can proceed to complete the incorporation.
- The Registrar will then issue the Certificate of Incorporation and issue a unique company number.
- The Registrar of Companies will then update the company’s information in the Central Business Registration Database. The Mauritius Revenue Authority, Local Authority (Municipality) and the Ministry of Social Security are all notified of any newly incorporated company.
- Payment of trade license fees must be made within 15 (fifteen) days upon starting the business operation. Thereafter for every subsequent financial year, it can be paid in two equal instalments.
- The company would then need to register with the Social Security Office. The new company should submit a monthly return of contributions to this office.
- A company must adopt a company seal to be used in the normal business operations.
The documents and information required for incorporation are as follows:
- approved name of the company;
- details of the director and secretary (if any) such as their full names, residential address and service address;
- business occupation of the directors in any other company;
- details of the shareholders;
- type of company- whether it is limited or unlimited;
- structure of the company- whether it is public or private;
- the registered office of the company;
- the business activity and location of the business; and
- full name of the applicant.
Note that for Domestic Companies, profits are taxed at only 15% (fifteen). When the investor pays himself a salary, the latter will be exempt from Social Security contributions, however, it will be taxable at source, at 15% (fifteen). Income exceeding Rs. 3,500,000 (three million and fifty hundred thousand) (approximately USD$ 79,950.36) is taxed at 5 %. Up to Rs. 6 000 000 (six million) (approximately USD$ 136,982.86 ) of turnover generated abroad is exempt from VAT.
Businesses in Mauritius are keenly regulated by a number of government Ministries, Departments and Agencies (MDAs). These MDAs are usually established by legislative instruments and govern different sectors of the economy specifically, the operations in those sectors for both foreign and local players. Some of these key MDAs are:
Promotes and maintains monetary and financial stability; safeguards the value of the currency of Mauritius; and regulates banks and financial institutions through guidelines, policies and directives for an overall robust financial system.
Request, receipt, analysis and dissemination of financial information regarding suspected proceeds of crime and alleged money laundering offences as well as the reporting of any activities or transactions related to terrorism to relevant authorities.
Provision of a sound legal and administrative framework for the promotion and protection of industrial property rights.
Supervision and regulation of the accountancy profession and to promote the highest standards of professional and business conduct of, and enhance the quality of services, offered by Professional and Public Accountants in Mauritius.
Investigation of the conduct of any public official which, in its opinion, is connected with or conducive to, corruption.
Promotion of confidence in corporate reporting and good corporate governance.
Responsible for and exercise control over the conduct of criminal prosecutions in the Republic of Mauritius.
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