The Republic of Mauritius is an island nation situated east of Madagascar off the southeast coast of Africa. Since its independence in 1968, Mauritius has continued to climb the economic ladder and has earned Africa’s highest income per capita. As the main financial hub for investment into Africa, its incessant economic growth, political stability, and improved infrastructure have made it rank 1st in Africa and 20th in the world for the ease of doing business, according to the 2019 World Bank Doing Business Report. Moreover, the island is one of the world’s most popular business destinations for international banking and company formation. The local government and regulatory authorities strive to offer foreign investors attractive tax incentives, fast and efficient services, commercially focused and pragmatic policies and a very user-friendly legislation catered to foreign enterprises.

Mauritius, under the Income Tax Regulations 2019, introduced controlled foreign company (CFC) rules, applicable to non-resident companies majorly owned by resident companies. Furthermore, the Republic is now a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and in general has greatly amended its regulatory framework to be more compliant with today’s international regulatory requirements and Directives. It is still however, considered to be a ‘greylist’ jurisdiction which significantly lowers the chances of opening a bank account for a Mauritius legal entity. 

Mauritius offers foreign investors two excellent financial instruments to conduct business: The Authorized Company and the Mauritius Global Business License Company. The Authorized Company (AC) is a standard tax-free International Business Company intended for business activities such asset protection, estate planning and global investment without the need for physical presence and tax residency in the jurisdiction. It is not permitted to carry out business activities related to banking, finance, trusteeship and fiduciary services. The Global Business License Company (GBC) on the other hand, is also considered an international company but of real substance and is treated as a fully-fledged tax resident of Mauritius with the advantage of relatively flexible requirements and appealing tax incentives. As an entity which conducts business outside Mauritius, but still a tax resident of the jurisdiction, a GBC is entitled to the partial exemption regime (PER) which is an 80% tax credit on the standard 15% corporate income tax rate, making its effective tax rate only 3%. It also benefits from double tax treaties signed with over 45 nations, allowing corporate tax exemption in other countries and zero withholding tax on interests and dividends. However, having said that, in order for a GBC to benefit from all the above-mentioned tax incentives offered by the jurisdiction it must fulfill the following substance requirements:

• Carry out its Core Income Generating Activities (CIGA) in Mauritius
• Management and control are primarily exercised in Mauritius
• Directly or indirectly employ a certain number of local skilled professionals
• Demonstrate minimum local expenditure comparative to its level of activities

Corporate Features of a Mauritius GBC and AC

Contact us and our corporate department will gladly provide you with more information on setting up any type of entity in Mauritius and can offer high-quality administration and management services including accounting and preparation of financial statements. Furthermore, we can assist you with bank account opening whether it be in Mauritius or another international financial institution, help you prepare a solid due diligence portfolio and assist with fulfilling the substance requirements should you wish to base your business in the country.