OFFSHORE COMPANY FORMATION
GBCII COMPANY
MAURITIUS
Mauritius combines almost all the characteristics for an ideal offshore location. It is an independent sovereign State with an economy of substance. It is politically stable and is equipped with the state of the art telecommunication technologies. It has a pool of bilingual professionals trained in Europe and the US. The country has a dynamic banking system with only internationally renowned banks operating in an exchange control free environment. Mauritius has an expanding network of double taxation which allow for efficient tax planning.
THE MAURITIUS INTERNATIONAL FINANCIAL CENTRE
The Mauritius IFC is now a well-established jurisdiction in the international tax planning landscape. Indeed, it has been used for structuring several high-profile investments into Europe as well as emerging markets in Asia (particularly China and India), Africa and the Far East.
Following the recent amendment and consolidation of the main legislative instruments – the Companies Act 2001, the Trusts Act 2001, and the Financial Services Development Act 2001, this legal framework around the IFC has now reached the highest standards desired by operators in the global financial services market. Moreover, the enactment of laws such as the Financial Intelligence and Anti Money Laundering Act gives to investors and their business partners the confidence of operating in a safe and properly regulated environment.
The tax framework is stable, clear, and very conducive for business operations. Thus, there is no withholding tax on dividends or interests paid by Mauritian companies to non-resident beneficiaries, no capital gains tax and no inheritance tax.
THE KEY IFC FOR GLOBAL BUSINESS OPERATIONS
The most frequently used vehicles in the Mauritius IFC are entities holding either a Global Business Licence category 1 (GBL1) or a Global Business Licence category 2 (GBL2) issued by the Financial Services Commission, the regulatory body.
The principal characteristics of a company holding a gbc2 are:
• The company is allowed to carry out “qualified global business activities” which include consultancy services, employment services, financial services, insurance, licensing and franchising, investment holding, asset management, aircraft financing and leasing, pension funds; trading amongst others
• As a tax incentive company, it is entitled to a nominal tax rate of 15%;
• The tax payable can be offset by an extremely generous scheme of tax credits regarding income derived from outside Mauritius, including the possibility of claiming a "deemed tax credit" equal to 80% of the income tax that would otherwise be payable on such income, reducing the payable tax rate to 3%.
• Subject to the company having its "effective management" in Mauritius, it can benefit from the wide network of very favourable double taxation avoidance treaties in place with tax territories in Europe (France, United Kingdom, Belgium, Luxembourg, etc), Asia (China, India, Singapore, etc), and Africa (Botswana, Mozambique South Africa, etc).
A gbc2-holder vehicle is not considered as being tax resident in Mauritius. The company is therefore not subject to Mauritian tax laws but, on the other hand, it cannot benefit from the network of tax treaties. Thus, such vehicle is generally used for transactions such as trading, and collection of royalties derived from intellectual property rights.
MAURITIUS OFFERS VARIOUS BENEFITS AND
TAX ADVANTAGES
• No withholding tax on interest, royalties and dividends.
• No capital gains tax
• Interest paid on deposits in Offshore Banks are tax exempt
• Dividend paid are tax exempt
• Royalties paid to non-resident are tax exempt
• No estate duty, inheritance, wealth or gift tax
• No stamp duties, registration duties, levy.
• Zero rated Value Added Tax for offshore business transactions
• Duty concessions on office equipment, furniture and motor vehicles and raw material and machines for Freeport, Offshore and tax incentive Companies.
• No exchange control and free repatriation of profits
• Global Business Category 2 Companies, Freeport Company and non resident trusts are tax exempt.
• Tax incentives Companies are taxed at 15 %.
• Foreign tax credit of 8 % on Offshore Companies.
• Relief of 50 % on personal income for expatriates.
• Tax holiday up to 2008 for specialized ICT operators.
• 10 year tax holiday for Regional Headquarters Companies on foreign sourced income.
• Grant of a permanent residence status for professional with possibility to acquire immovable property in the Financial and ICT sector (SAPES).
• Member of the COMESA, an east African free trade zone grouping a status.
• Signatory member of the Africa growth and opportunity Act which allow export to the United States of America free of duties and quota.
• Grant of permanent residence scheme for non citizens investing a minimum of USD 500,000 in a specific project or in Permanent Residence Investment Fund.
GLOBAL BUSINESS CATEGORY 2
GBC2
REGULATORY FRAMEWORK
Category 2 Global Business Companies (GBC2) which are similar to the BVI type International Business Companies are governed by the provisions of the Companies Act 2001. GBC2 companies are cost-effective, flexible and wholly tax-exempt vehicles for structuring of client’s investments. Information relating to a GBC2 are confidential and not available for public inspection.
KEY FEATURES OF A GBC2
A Mauritius GBCII:
may issue shares with or without a par value (sec.345) or fractional shares
all information on GBC2 are confidential and not available for public inspection
may have shareholders or directors who are corporate bodies or natural persons
may be limited by guarantee or limited by shares or unlimited
may be managed by its members or by a Board comprising one or more directors
may be set up with partnership-type characteristics e.g. limited life provisions
may but does not need to have a constitution or bye-laws
it does not require file annual returns or audited accounts
does not need to have local director, shareholder or secretary
the minimum number of shareholder and director required is one.
The GBC2 Company shall be a private company and shall at all times have a registered agent, and a registered office in Mauritius. We are licensed as a management company for the purposes of providing these services.
A GBC2 Company is prohibited from:-
Dealing with Mauritian residents or in the Mauritian Rupee;
Owning any interest in immovable property situated in Mauritius;
Having as beneficial owner any person resident in Mauritius; or
Holding shares or debentures or any interests in a domestic company.
FISCAL REGIME
A GBC2 Company is non resident for tax purposes and is therefore not subject to any tax in Mauritius on its income, or dividends or interest paid to a non-resident or on any royalties, rents or compensation paid by the company. Moreover any gains or profits derived from the sale of shares, debt obligations or other securities of the Company are also exempt from tax.
A GBC2 company is exempted from the payment of any duty, levy (sec 42(4) FSDA 2001).
A GBC2 is not allowed to access the benefits available under the double taxation avoidance treaties.
INCORPORATION AND TIME-FRAME
A GBC2 company may be established fairly quickly – within three days. The procedure is to send us the duly signed Application Form with the required remittances and supporting documents
GENERAL OVERVIEW
A company holding a Category 2 Global Business License is often used for trading and investment. GBCII companies are not resident for tax purposes and do not have access to Mauritius' tax treaty network. Beneficial ownership is not disclosed to the authorities.
GENERAL INFORMATION
Mauritius is situated in the Indian Ocean approximately 800 km off the East Coast of Madagascar.
POPULATION
The population of the Island is approximately 1,200,000 made up principally by people of European, African, Indian and Chinese origin. Mauritius takes pride in the fact that these different cultures co-exist in peace and succeed in creating a cultural entity that is distinctly Mauritian.
POLITICAL STRUCTURE
The British ruled Mauritius for 158 years until 12 March 1968 when it became an independent country within the Commonwealth. The Republic of Mauritius is a Westminster style democracy. The President is the Head of State and Commander in Chief. Full executive power rests with the Prime Minister who is Head of Government. The Members of Parliament are elected every five years by popular vote and a number of political parties contest the elections, every five years, reflecting the country's firm commitment to a multi-party political system.
ECONOMY
Since independence in 1968, Mauritius has developed from a low income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourism sectors. For most of the period, annual growth has been of the order of 5% to 6%.
The government's development strategy centres on foreign investment. Mauritius has attracted more than 15,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over US$1 billion.
The economy in 2000 grew by 8.9% and the Gross National Income per capita at market prices reached 101,948 rupees. Unemployment rate for 2000 is estimated at about 8.0% while inflation stood at 4.2%.
LANGUAGE
English is the official language. However, the Mauritian population is largely bilingual, being equally fluent in English and French. Creole is also spoken and understood by everyone.
CURRENCY
Mauritian Rupee
EXCHANGE CONTROL
None
TYPE OF LAW
Common Law for corporate matters
PRINCIPAL CORPORATE LEGISLATION
The Companies Act 2001
Financial Services Development Act 2001
COMPANY INFORMATION
TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT
A Company holding a Category 2 Global Business License which is similar to a British Virgin Island International Business Company and is non-resident for tax purposes
PROCEDURE TO INCORPORATE
Submission of the Memorandum and Articles of Association 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. Finally, directors and shareholders must execute consent forms and these must be filed with the Registrar of Companies.
RESTRICTIONS ON TRADING
Companies holding a Category 2 Global Business License cannot trade within the Republic of Mauritius.
POWERS OF COMPANY
A company incorporated in the Republic of Mauritius has the same powers as a natural person.
LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
The legislation is in English and French whilst documentation may be expressed in any language but must be accompanied by a certified English translation.
SHELF COMPANIES AVAILABLE
Yes
NAME RESTRICTIONS
Any name that is identical or similar to an existing company or any name that suggests the patronage of the President or the Government of Mauritius
LANGUAGE OF NAME
Latin and other alphabets
NAMES REQUIRING CONSENT OR A LICENSE
The following names or their derivatives: assurance, bank, building society, Chamber of Commerce, chartered, co-operative, government, imperial, insurance, municipal, royal, state or trust or any name which in the opinion of the Registrar suggests the patronage of the President or the Government of Mauritius.
SUFFIXES TO DENOTE LIMITED LIABILITY
Limited, Corporation, Incorporated, Public Limited Company, Société Anonyme, Société Anonyme à Responsabilité Limitée, Sociedad Anónima, Berhad, Proprietary, Naamloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or the relevant abbreviations.
DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
No
COMPLIANCE
STATED SHARE CAPITAL
There is no limit to the number or value of shares that can be issued.
CLASSES OF SHARES PERMITTED
Registered shares, preference shares, redeemable shares and shares with or without voting rights.
TAXATION
A Company holding a Category 2 Global Business License does not pay any tax on its world-wide profits to the Republic of Mauritius authorities.
LICENSE FEES
US$ 135 per year to FSC
US$ 65 per year to the Registrar of Companies
FINANCIAL STATEMENT REQUIREMENTS
Companies holding a Category 2 Global Business License are required to maintain financial statements to reflect their financial position with the Registered Agent but are not required to file accounts with the authorities.
DIRECTORS
Minimum one, who may be natural person or a body corporate
COMPANY SECRETARY
Optional
SHAREHOLDERS
The minimum number of shareholders is one.
