setting up a business in Mauritius

Setting up a business in Mauritius

1. Registering a Mauritius offshore company can be completed within two weeks, with a minimum of one shareholder and one director of any nationality, who both can be residing elsewhere than Mauritius. The minimum paid-up capital is US$1, you will be able to register a new business in Mauritius without traveling to the island;

2. Entrepreneurs investing in Mauritius can take advantage of several incentives available in Mauritius Export Processing Zones: their resident company can get an exemption from corporate tax for up to 10 years and custom duties on capital goods and selected raw materials;

3. Registering a Captive Insurance Savings company can offer several benefits including:

• Direct access to the wholesale reinsurance market which has more lucrative commissions and profits compared to retail reinsurance;
• A CIS license company is a lot less bureaucratic than a traditional insurance carrier.

Favorable legal and tax environment

4 Mauritius offers the highest degree of confidentiality, along with free repatriation of capital, no control on foreign exchange, and a sound banking framework;
5. The OECD has recognized Mauritius as a fully tax compliant jurisdiction and has positively rated it over UK, Luxembourg and the USA. Further, the country has recently signed the BEPS multilateral agreement and has adopted the CRS promoting the exchange of information between countries;
6. Mauricio Global Business Companies (formerly GBC1) allows its founders to legally minimize taxes on their global earnings because:

• The GBC companies of Mauritius are considered resident companies for tax purposes, but benefit from a low corporate tax at an attractive rate of 3% on their overall earnings;
• Interest and dividends remitted to a GBC are legally exempt from withholding taxes. As such companies have access to the 44 Mauritius double taxation agreements signed with countries that include i) Germany ii) Italy iii) United Kingdom iv) China v) France vi) India vii) Malaysia viii) Singapore and ix) the United Arab Emirates ;
• Mauricio GBC does not have to pay withholding taxes in Mauritius on interest earned and dividends remitted abroad to both corporate and individual owners;
• Mauricio GBC can conduct business with local clients and provide financial and insurance services, provided they obtain the corresponding license with the Mauritius Financial Services Commission;

7. A wide range of industries has the right to enjoy numerous tax incentives in Mauritius, which include:

• An exemption of corporate taxes for a period of 8 years on profits derived from innovation activities for the development of intellectual property assets. This incentive is applicable only to companies that have joined after July 2017;
• All companies working for the development of a marina are entitled to a corporate tax exemption for a period of 8 years;
• A 5-year tax relief for all P2P loan companies (approved by FSC) and EDB-certified e-commerce companies.

Strategic location

8. Mauritius is the ideal investment gateway to Africa, as it has a conducive business environment, low tax rates, low levels of corruption and bureaucracy as compared to its neighbors;

9. Mauritius offshore company formation is relatively easier to set up as compared to other jurisdictions.

Attractive location for e-commerce business

10. Mauritius has been actively working towards promoting the country as the headquarters for e-commerce activities in Africa and developing a center for Green Finance through its increased efforts in developing i) a Textile City in Madagascar; ii) an Industrial and Development Park in Naivasha, Kenya and iii) initiatives in the SEZs of Senegal, Cote d’Ivoire, and Ghana.

Problems with Mauritius company formation

1. From 1 January 2019 onwards, the Mauritius Government has replaced the GBC2 entity with an Authorised Company entity;

2. Thereafter the entity will need to be converted into either a GBC (subject to 3% corporate tax rate) or an Authorized Company;

3. Mauritius companies suffer from the island’s tax haven reputation. Clients establishing a Mauritius offshore company can attract additional scrutiny from tax authorities and banks;
4. The tourism industry is partially closed to foreign investors looking for business registration in Mauritius. For instance, foreigners cannot have a majority stake in a hotel with less than 100 rooms. They also need to make an initial investment of at least US$300,000 to open a restaurant in Mauritius;

5. Additional registrations required for trade license and data protection office will delay the engagement by 6 weeks;

Vulnerability to external shocks

6. The island country is extremely dependent on tourism for its economic well-being, which makes it more vulnerable to external changes and shocks;

7. While labor is easily available, it is difficult to get professionals in Mauritius, which is why there is a lot of untapped potentials which can delay the speed of development and growth in the country;
8. The legally tax-exempt Mauritius GBC2 license was abolished on January 1, 2019. An authorized company license will be given out instead.

• Best uses for a Mauritius business registry