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Through our affiliated company in Mauritius, we provide company formation and administration services in Mauritius.
Mauritius is a sub-tropical volcanic island with an area of approximately 1,865 square kilometers. Situated in the Indian Ocean, approximately 2400 kilometers off the South East Coast of Africa, Mauritius has been both a French and a British colony. It became independent from Britain in 1968 whilst remaining a part of the Commonwealth. The multi-racial population of approximately 1.2 million comprises people of Indian, African, European and Chinese origin. English is the official language but most people are multi-lingual and fluent in English and French as well as their ancestral tongue, Mandarin and Hindi amongst others.
Mauritius is a multi-party democratic state based on the Westminster model. It is also one of the few countries with a hybrid legal system based on English and French law. Company Law is modeled on the British Companies Act 1984 and this is currently being reviewed and consolidated. The highest court of appeal is the Privy Council in London.
On 1 December 2001, new legislation relating to the financial services sector came into effect. The new legislation was passed to harmonise the laws relating to domestic and offshore companies, to ensure the development of the sector in a coordinated manner, to combat money laundering and further to make provision for the protection of investors.
In addition to its fantastic beaches, Mauritius is also gaining a reputation as an International Financial Services Centre. The island has a well-developed infrastructure and a thriving and vibrant economy. The workforce is well educated and has a sound work ethic. The professional business environment is served by a number of banks, law firms and accountancy practices. There are excellent telecommunication facilities including International Direct Dialing, Cellular and GSM telephone systems, and the Internet. Political and economic stability is another attraction of Mauritius too.
The government's long-standing policy is to encourage foreign investment. There are no exchange controls and the Financial Services sector is currently being reviewed to ensure that Mauritius is in line with International standards of legislation and regulation.
Mauritius offers two main types of companies for offshore investors. Its Category 1 Global Business Licence Companies (previously known as offshore companies) are normally used for accessing its double tax treaties. Its Category 2 Global Business Licence Companies (previously known as international companies) are flexible and easy to manage and can be a viable alternative to the BVI IBCs.
Mauritius New Legislation
The Companies Act 2001 and the financial Services Development Act 2001 passed in May 2001 came into force on 1 December 2001.
The Companies Act 2001 (“the Act”) repeals the Companies Act 1984 (the legislation governing Mauritius Offshore Companies) and the International Companies Act 1994. The Act amends and consolidates the law relating to all companies incorporated in Mauritius so that existing offshore companies, international companies and domestic companies as well as companies incorporated as from 1 December 2001 will henceforth have the same legal framework.
The Financial Services Development Act 2001 repeals the Mauritius Offshore Business Activities Act 1992 and the regulations made thereunder. Henceforth, the Financial Services Commission (“FSC”) will replace the Mauritius Offshore Business Activity Authority (also known as MOBAA) as the statutory body responsible for the regulation of all non-bank financial services. The FSC will have the power to issue guidelines and codes of practice for the proper conduct of business in the financial services sector.
Changes
* CLASSIFICATION
An Offshore Company is now known as a Global Business Licence Company – Category 1 (“GBL1”). An International Company is now known as a Global Business Licence Company – Category 2 (“GBL2”).
* LICENCE
A GBL1 will be issued with a Global Business Licence Category 1 and a GBL2 will be issued with a Global Business Licence Category 2. If the company does not pay its annual licence fee within one month of the due date, the licence will lapse.
* NAME RESERVATION
When the name/s proposed for checking is/are approved by the Mauritius Companies Registry (“Registry”), the name/s will no longer be automatically reserved at the Registry. The clients are required to choose the name/s they would like to reserve and a Certificate of Reservation valid for 2 months will be issued for each name reserved.
* INCORPORATION
An application to incorporation a GBL1 or a GBL2 needs to be certified by a law practitioner in Mauritius. The FSC is authorized to issue letters of intent stating the terms and conditions upon which a GBL1 or GBL2 may be issued. A company can only be incorporated if it has at least one director and a shareholder.
* CONSTITUTION
A GBL1 and a GBL2 may choose whether or not to have a constitution. Where a company elects not to have a constitution, the rights, powers, duties and obligations of the company, the board, the directors and the shareholders are those set out in the provisions of the Act. Where a company has a constitution, the rights, powers, duties and obligations will be those set out in the provisions of the Act unless these provisions are specifically modified by its constitution.
The constitution need not set out the objects of the company. Where the constitution includes a statement of objects, there is deemed to be a restriction on carrying out activities that are not within the object.’
The Memorandum and Articles of Association (“M&A”) of an existing company will be its constitution. If a company wish to amend any provision of its M&A, it will need to replace the M&A by a single document into which it consolidates its constitution.
* CONFIDENTIALITY
Documents and registers kept by the Registrar of Companies will continue to remain unavailable for public inspection.
The two most popular Global Business Vehicles currently in use are the Mauritius Company with a Global Business Licence Company – Category 1 (“GBL1”), and the Mauritius Company with a Global Business Licence Company – Category 2 (“GBL2”). The GBL1 is most useful where the company is to be a public company, or wishes to take advantage of the benefits of Mauritius' extensive network of Double Taxation Agreements, or where it carries out banking, fund management, or insurance activities. The GBL2 is mainly used for international business transactions, invoicing and re-invoicing, collecting royalties or holding assets.
Advantages of using the Mauritius GBL2 Company include:
- Confidentiality guaranteed by law
- No exchange control restrictions; and profits can be freely repatriated;
- No withholding tax on dividends, interest and royalties;
- No Capital Gains tax and inheritance tax;
- No compulsory participation of local investors in offshore companies;
- Operating costs are relatively low;
- Ease in working in most time zones, (Mauritius is GMT+4 Hours)
- Tax incentives exist for companies in the offshore sector. (A GBL1 is liable to taxation at 15 per cent with foreign tax credits available for offset against the tax payable in Mauritius. The GBL2 is not liable to taxation in Mauritius and may not access double taxation agreements.)
- Network of Double Taxation Treaties (DTA) and Investment Promotion and Protection Agreements (IPPA). Concessions available under the Double Taxation Agreements signed by Mauritius are extremely attractive and usually include:
- Complete exemption from withholding tax on interest payments where the loan has been approved by the Government of that country.
- Complete exemption from Capital Gains Tax (both short and long term) on the sale by a Mauritian GBL1 Company of its movable property (including shares) except where there is a permanent establishment.
- Supertax on freight chargeable in certain Treaty countries is exempt for those shipping companies which are tax resident in Mauritius.
A credit against any Mauritius tax payable is available for any foreign taxes paid by the GBL1. There is also provision for a deemed foreign tax credit which currently amounts to 80% of the Mauritius tax payable, bringing the effective tax rate down to approx. 3%, as well as a Tax Sparing Credit. The Tax Sparing credit is available where the foreign source income is exempt from or taxed at a preferential rate in the source country under laws enacted to promote industrial, commercial, scientific, educational or other development in that country. In this case, tax is deemed to have been paid and may be credited against Mauritius Tax, even though no tax may actually have been paid.
The main features of a Mauritius GBL2 are:
| a) |
its ease of incorporation. A GBL2 may be incorporated in one day. To incorporate, we would require the following information/ documentation:
| name of company |
| authorized share capital required |
| details of shareholder(s)/director(s). There is no requirement for residency and they may be individual or corporate. |
| name of officers (optional) |
| number of shares to be issued |
| the intended business activity of the proposed company |
| the usual due diligence documentation |
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| b) |
There is no need to file annual accounts or returns |
| c) |
Lower cost |
| d) |
Confidentiality |
Details of the beneficial owner are disclosed only to the Registered Agent (i.e CTML) and to the company's bankers, if a Mauritius bank account is required. Although details of the shareholders, directors and officers are disclosed to the Financial Services Commission, these are not on public record and are protected by confidentiality clauses in the legislation. In addition, CTML/ CTL is able to offer nominee services, should you so require.
Our rules of professional practice require us to "know our client", either directly or indirectly. In this, as in other matters, our company adheres to the guidelines of the self regulating Association of Offshore Management Companies (AOMC) in Mauritius. For end-users of companies the requirements are quite simple. |
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