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Mauritius
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General Information

MAURITIUS is situated in the Indian Ocean approximately 800 km east of Madagascar. The total area of the island is 2,040 square kilometres. The population is estimated at 1,200,206 (July 2002 est.). Port-Louis is the major city and the seat of Government. The official languages of Mauritius is English, however the Mauritian population is largely bilingual, being equally fluent in English and French.

Creole is also spoken and understood by everyone. 52% of the population practice Hindu, 28.3% are Christians (26% - Roman Catholics and 2.3% - Protestants), 16.6% are Muslims. The literacy factor is 82.9% (total population).

The island was discovered by the Portuguese in 1505. Subsequently Mauritius was held by the Dutch, the French, but in 1814 Mauritius, along with the Seychelles, were ceded to Great Britain under the terms of the Treaty of Paris. Political independence from Britain was achieved in 1968 and a republican form of government was adopted in 1992. Currently Mauritius is an independent republic within the British Commonwealth.

Mauritius is a parliamentary democracy. President is the Head of State and Commander in Chief (elected by the National Assembly for five-year terms). Full executive power rests with the Prime Minister who is the Head of Government (appointed by the president and is responsible to the National Assembly). The Cabinet of Ministers is appointed by the president on the recommendation of the prime minister. The legislative branch is represented by the unicameral National Assembly (66 seats - 62 elected by popular vote, 4 appointed by the election commission from the losing political parties to give representation to various ethnic minorities; members serve five-year terms). The j udicial power is executed by the Supreme Court.

The economy of Mauritius is based on three branches - tourism, agriculture (mainly sugar production) and textile industry. Sugarcane is grown on about 90% of the cultivated land area and accounts for 25% of export earnings. However the government's development strategy centres on foreign investment. The country has already attracted considerable foreign investment and has earned one of Africa's highest per capita incomes. The currency of Mauritius is Mauritian Rupee (MR), the exchange rate of which to dollar is as follows: US$1 = MR29.8.

Legal system of Mauritius is based on French civil law system with elements of English common law in certain areas. Corporate legislature is based on Common law. Constitution of Mauritius was adopted 12 March 1968 (amended 12 March 1992).

Mauritius has an extensive double tax treaty network which includes treaties with the following countries: Belgium, Botswana, China, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, UK and Zimbabwe. Treaties with the following countries are expected to come into effect soon: Lesotho, Russia, Rwanda, Bangladesh, Malawi, Croatia, Tunisia, Uganda, Nigeria and Zambia.

Incorporation in Mauritius

In Mauritius there are two types of companies used for international tax planning: the Global Business Company holding Category 1 licence (GBC1 company - formerly the Offshore Company), the Global Business Company holding Category 2 licence (GBC2 company - formerly the International Company). The Companies Act 2001 repealed and replaced the existing Companies Act 1984 and the International Companies Act 1994, which provided for incorporation of offshore and international companies, respectively.

The GBC Category 1 (GBC1) is used as a low tax, tax resident company that can avail itself of the provisions of the many Mauritius tax treaties.

The GBC Category 2 (GBC2) is similar to the BVI International Business Company (IBC) and is non-resident for tax purposes.

Incorporation, operation and taxation of Global Business Companies are governed by the provisions of the Companies Act 2001 and by the Financial Services Development Act 2001.

Each of the GBC1 and GBC2 can then be formed with various organisational structures, including a company limited by shares; a company limited by guarantee; a company limited by both shares and guarantee; or an unlimited company. All Mauritian companies must at all times maintain a Registered Agent and a Registered Office in Mauritius.

Name of a Mauritius company

The name of a Mauritian company cannot be identical or similar to any existing company name. The following suffixes may be used to denote limited liability: Limited, Corporation, Incorporated, Public Limited Company, Societe Anonyme, Societe Anonyme а Responsabilite Limitee, Sociedad Anуnima, Berhad, Proprietary, Naamloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or their relevant abbreviations: Ltd., Corp., Inc., S.A., A.S., AG and others.

The following names or their derivatives cannot be used: 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.

GBC 1 – general information

Under the FSDA 2001, a GBC1 company is defined as one engaged in any approved qualified Global Business, including those involving the raising of funds from the public and requiring investors’ protection. GBL1 can be active in fields such as banking, insurance, fund management or any activity involving public money, provided it has obtained the appropriate authorisations from the Financial Services Commission (FSC) and other authorities, where necessary. GBC1 companies must carry on their business in a currency other than the Mauritian Rupee.

Mauritius GBC1 can take advantage of the extensive network of Mauritius tax treaties. GBC1 companies are taxed on their income at the rate of 15%. However they can deduct the foreign taxes paid, up to the amount of tax due in Mauritius. In the absence of proof, the amount of foreign tax paid is presumed to be 90% (80% as from 1 July 2003) of the Mauritius tax, thus the maximum effective local tax rate is 1.5 % (3% as from 1st July 2003).

Procedure to incorporate a GBC1

The setting up of an GBC1 company involves the following:

  • An application must be submitted to the FSC by a duly licenced Management Company. Apart from completed and signed forms the application should include:
    • a certificate from a law practitioner practicing in Mauritius certifying that the application complies with the laws of Mauritius;
    • a detailed business plan including markets to be exploited, forecasts of the volume of business and returns, and expected cash flows;
    • details on the ultimate beneficial owners (and where the beneficial owners are bodies corporate, audited accounts of the previous years);
    • bank references on the ultimate beneficial owners;
    • a copy of the application for incorporation and all documents submitted to the Registrar of Companies (ROC).
  • Incorporation by the Registrar of Companies. Documents required for incorporation include:
    • Prescribed application form for incorporation;
    • Single written document representing the Constitution of the Company, duly signed and dated;
    • a certificate from a law practitioner practicing in Mauritius to the effect that the Constitution complies with the laws of Mauritius.
    • Name Reservation Certificate (names have to be reserved in advance with the Registrar of Companies through a Management Company);
    • Signed consent of the first directors, shareholders and secretaries and location of the registered office;
  • Licensing of the company by the FSC - the licence is issued upon acceptance of the proposed licensing conditions.

The government fees for incorporation of a GBC1 company are:

  • USD 200 to the Registrar of Companies
  • USD 500 to the Financial Services Commission
  • USD 1500 licence fee.
Share capital and shareholders of a GBC1 company

There is no minimum capital requirement for most businesses. However, management companies, investment and advisory companies, companies acting as trustees, qualified global banking businesses, qualified global insurance and reinsurance businesses do require a minimum initial capital.

GBC1 Company can issue registered, preference shares, redeemable shares and shares with or without voting rights. Bearer shares are not allowed. The minimum issued share capital is two shares of par value.

Category 1 Companies require a minimum of two shareholders who can be both individuals and bodies corporate. It is possible to have only one shareholder where the shares are held by a corporate body, including a GBL2 Company.

Details of the shareholders must be filed with the Registrar, but these details are not available for public inspection and cannot be retrieved by a company search at the Companies Registry, so confidentiality is assured.

The shareholders must hold a General Meeting annually. It is technically not necessary that this be in Mauritius, but in practice companies who wish to avail themselves of treaty benefits should hold this meeting in Mauritius.

Directors of GBC1 company

The minimum number of directors is one, who must be a natural person resident in Mauritius. However if the company would like to access DTAs it is required to have a minimum of two local directors. Corporate Directors are not allowed. A director is required to give his consent to act as director by filing a relevant form with the Registrar of Companies but these details are not available for public inspection and are protected by the confidentiality laws.

A GBC1 company must appoint a secretary who need not be resident in Mauritius. Secretaries may be individual or bodies corporate. A GBC1 company must also appoint a Management Company to deal with the Financial Services Commission and other public sector agencies.

Annual reports and payments for GBC1

GBC1 must file annual audited accounts with the Financial Services Commission within six months after the close of its financial year and non-compliance will entail a revocation of the licence. As was mentioned above Category 1 Global Business Companies are liable to taxes at a rate of 15%. In addition to this it must pay a fixed annual government fee of USD 1,570 (USD 70 payable to the Registrar of Companies, and USD 1500 payable to the Financial Services Commission 15 days prior to the licence date).

GBC 2 – general information

A company holding a Category 2 Global Business License is often used for trading and investment. The income of a GBC2 Company is treated as exempt from tax under the provisions of the Income Tax Act 1995 (as amended) and is not taxed in Mauritius. GBC2 Companies cannot obtain relief under Double Taxation Agreements in force in Mauritius. There are a few restrictions on the activities of a GBC2 company, and namely a GBC2 company may not:

  • carry on business with residents in Mauritius;
  • carry on any dealings in Mauritian currency;
  • own any interest in immovable property situated in Mauritius;
  • hold any shares, debentures or other interest in any domestic company or other Mauritius entities other than in an Global Business Company and
  • have as beneficial owner of its shares a person resident in Mauritius.
  • raise capital from the public;
  • carry on any banking, insurance or reinsurance business;
  • carry on the business of providing the registered office or of providing nominee services for companies or of providing any trusteeship services and
  • carry on the business of holding or managing a collective investment scheme as a professional functionary.
Procedure to incorporate a GBC2 company

Setting up of a GBC2 company involves four steps:

  • Reservation of a name with the Registrar of Companies (names must be reserved in advance with the Registrar of Companies through a Registered Agent).
  • Approval of application by the FSC.
  • Incorporation by the Registrar of Companies (ROC) - normally takes one day. Documents required for incorporation include:
    • Single written document representing the Constitution of the Company, duly signed and dated;
    • Prescribed application form for incorporation;
    • Signed consent of first directors, Shareholders and secretaries and location of the registered office;
    • Name Reservation Certificate;
    • a certificate from a law practitioner practicing in Mauritius to the effect that the Constitution complies with the laws of Mauritius.
  • Licensing of the company by the FSC (the Global Business licence is issued upon formal acceptance of the proposed licensing conditions and after the issue of the Certificate of Incorporation by the Registrar of Companies).

The government fees for incorporation of a GBC1 company are:

  • USD 65 to the Registrar of Companies
  • USD 135 to the Financial Services Commission.
Share capital and shareholders of a GBC2

For GBC2 company there are no minimum or maximum capital requirements. Normally GBC1 companies are incorporated with an authorised share capital of USD 100,000 divided into 100,000 share of US$1.00 each.

GBC2 can issue registered, preference shares, redeemable shares, shares with or wothout par value, shares with or without voting rights. Bearer shares are not allowed. The minimum issued capital is either one share of no par value or one share of par value.

Only one shareholder is required for a GBC2 company. Shareholders may be individuals or bodies corporate of any nationality and residency. Details of the shareholders must be filed with the Registrar, but these details are not available for public inspection and cannot be retrieved by a company search at the Companies Registry, so confidentiality is assured.

Shareholders may hold their meetings at such times and in such places in or outside Mauritius as the directors deem necessary or desirable. Meeting by telephone or other electronic means is allowed and shareholders may be represented by proxy.

Directors of a GBC2 company

Business and affairs of GBC2 companies are managed by a Board of Directors consisting of at least one director who may be a natural person or a body corporate of any nationality and need not be resident in Mauritius. A Register of Directors must be kept by the company and any changes to the Register must be filed with the Companies Registry, but as with the register of shareholders, this information is retained by the Registrar and does not form part of the public record of the Company. The directors must certify their fitness to act as such.

Directors meetings may be held by telephone and directors may be represented by alternates. Directors may appoint a secretary or any other officer or agent to assist them in their task. Such officers may be natural persons or bodies corporate of any nationality and need not be resident in Mauritius.

Annual reports and payments for a GBC2 company

A GBC2 is not required to file any statutory accounting or audit reports in Mauritius, however they are required to maintain financial statements to reflect their financial position with the Registered Agent. Only fixed annual fees must be paid to the Mauritius Government in the amount of USD 200 (USD 65 payable to the Registrar by the 20 th of January of every year and USD 135 payable to the Financial Services Commission 15 days prior to the licence date) and the Registered Agent to keep the company in good standing.

Mutual Funds

Investment companies including Mutual Funds are regulated by the Financial Services Commission (FSC). An investment company is defined in the Companies Act 2001, as a company whose business consists of investing its funds principally in securities with the aim of spreading investment risks and giving members of the company the benefit of the results of the management of its funds

An investment company must be incorporated as a company limited by shares holding a Category 1 Global Business Licence under the Companies Act 2001.

The procedure of establishing a mutual fund involves:

1) the fund submits its application for in principle approval to the FSC, accompanied by:

  • identity, track records and credentials of the investment manager, custodian and administrator, functionaries of the proposed fund (the FSC insists on the independence of the Manager and the custodian)
  • fund structure
  • objectives of the fund
  • investors and markets targeted
  • types of investment the fund will be dealing in
  • size of investment fund in monetary terms and a minimum subscription.

Once the FSC is satisfied with the above, it may give in principle approval and the constitutive documents may then be prepared and the company incorporated.

2) Incorporation. In addition to the information provided when incorporating a GBC1 Company, the following must be included:

  • Prospectus / placement memorandum ( this must include information on the basis of the net asset value circulation, the type and legal status of the fund, the investment policy by class of fund, including the use of financial instruments, the remuneration of the investment managers, investment advisors, directors, custodians and administrators, conditions for the issuance and redemptions of shares including their frequency and the different class rights, the tax status)
  • Custodian agreements
  • Investment management/advisory agreements
  • Administration agreements
  • Secretarial agreements
  • Detailed business plan.

Government Fees of US$ 2000 are payable in advance as for GBC1 companies.

Local requirements include the following:

  • The fund must have a local administrator
  • a local custodian (generally a banking institution. The main custodian may delegate certain of its activities to an approved third party but retains its responsibilities)
  • a local auditor
  • issues and redemptions of shares must be carried out in Mauritius (foreign intermediaries may however, still participate in the placing and redemption operations as distributors or nominees)
  • calculation of the Net Asset Value (NAV) must be carried out in Mauritius.

Reports of the mutual fund to be submitted include:

  • quarterly accounts including details of the NAV at each month end, the change in NAV and the proceeds from issues and payments for redemptions of shares to be submitted to the FSC within 15 days of each calendar quarter
  • half yearly unaudited report to be submitted to the FSC
  • audited annual report prepared in accordance with International Accounting Standards to be filed with the FSC within 6 months of the balance sheet date.

The half yearly and annual reports must include a statement of assets and liabilities including the number of shares outstanding and the calculation of the NAV per share.

Funds are liable to tax in Mauritius on their chargeable income at the rate of 15%. Howe ver, the Income Tax Regulations of July 1996 introduced elaborate provisions on the calculation of net foreign source income and foreign tax credits. This system is quite generous and may substantially reduce Mauritian income tax payable, in many cases to zero. GBC1 companies may also benefit from the network of Double Taxation Agreements.

INSURANCE COMPANIES IN MAURITIUS

Insurance business in Mauritius may only be conducted by Companies holding a Category 1 Global Business Licence (GBC1). Insurance companies are currently governed by the Companies Act 2001 and the Financial Services Development Act 2001 (FSDA2001) as amended by the FSDA regulations.

Insurance business is classified as follows:

  • captive insurance means insurance business where the insured is a related corporation of the insurer
  • long term insurance, means insurance business of any or substantially any of the following classes-
    • life assurance
    • pensions
    • permanent health insurance
  • general insurance, means insurance business other than long term insurance business
  • Reinsurance means a contract whereby an insurer insures the risk insured by him, or part of that risk with another insurer.

The capital requirements and solvency margins are also set according to the type of insurance business.

Type of insurance

Minimum stated capital

Margin of solvency

General insurance

US$ 200,000 or its equivalent

***E is the greater of US$ 200,000 or 15% of the net premium income

Long term insurance

US$ 250,000 or its equivalent

Value of admitted liabilities in respect of policies issued shall not exceed the amount of its long term insurance fund

Reinsurance

US$ 300,000 or its equivalent

***E is the greater of US$ 200,000 or 15% of the net premium income

Captive Insurance

US$ 100,000 or its equivalent

***E is the greater of US$ 100,000 or 15% of the net premium income

*** where E = excess of admitted assets over admitted liabilities

The share capital does indeed need to be fully paid up for an insurance company.  

Steps involved in establishing an insurance company:

  • Name Reservation (the same as for company GBC1)
  • Application – completed Application forms together with other documents trequired for application are sent to the FSC
  • The FSC approves applications through its Technical Committee which meets on a weekly basis.
  • Upon acceptance of the conditions imposed by the FSC in their letter of intent, the FSC would arrange for the incorporation and licensing of the Company. These conditions may specific to each company contingent on the application proposals and undertakings. The Certificate of Incorporation and the Global Business Certificate should be ready within 3 days.
  • Application for TRC - the Income Tax Authorities must be satisfied that all the conditions to demonstrate effective control and management from Mauritius are met. This may take up to 3 weeks.

The application for Qualified Global (Insurance) Business activities is made to the FSC. In addition to the normal documentation required for setting up a GBC1, the following should be submitted in support of the application:

  • A detailed business plan
  • Background on Company’s principal business activities and investment objectives.
  • Name of the appointed Captive Management Company
  • Details and evidence of good character and standing of the shareholders, and the ability, integrity and experience of the directors and managers and officers.

Individual shareholders and directors – have to provide their names and proof of residential addresses (a utility bill, bank or credit card statement would be acceptable) along with a notarized copy of their passports. A minimum of one shareholder is required (natural person or a body corporate). Corporate shareholders have to provide a notarized copy of the Certificate of Incorporation and Corporate details.

  • Track record of ultimate beneficial owner including a copy of the passport duly certified as a true copy by a banker or a notary, as well as a full CV setting out the name and residential address, main occupation / activity, main source of revenue, details of any other businesses owned/managed. Where the ultimate beneficial owner is a corporation with a large shareholder base, the FSC would require a Certified true copy of the Certificate of Incorporation, corporate details, group structure, latest published accounts and annual report as well as sample promotional material.
  • Letter of Reference from a bank of international repute on the ultimate beneficial owners addressed to the Registered Agent or the Financial Services Commission (FSC).
  • Consent of an approved auditor in Mauritius to act as auditor of the applicant.
  • Name and address of the Company’s banker in Mauritius (There is no requirement to open a Mauritius account for all companies, but those wishing to benefit from the DTA network need to have one in order to demonstrate "effective management" from Mauritius).

Business Plan of an insurance company should include:

  • Source of funds invested
  • 3 year estimate of :
  • amounts to be invested
  • sectors of the economy targeted by the business
  • expected income and expenses (Pro Forma Income Statement)
  • Annual cashflows
  • A five year projection including anticipated risk exposure and asset base at the end of each year during the period;
  • The type and source of business
  • Anticipated premium income
  • An overall assessment of the risk factors and, if appropriate, an analysis of proposed reinsurance;
  • An assessment of the expected ratio of claims to premiums written with a statement explaining the rationale applied.
Insurance manager

The insurance company may also have to appoint a resident manager regulated by the Financial Services Commission (FSC). The manager’s duties are essentially to watch out for any difficulties or irregularities that may arise in any of the licenced companies under his management. There are certain functions that the manager must carry out in order to do this. These consist mainly of keeping basic information regarding the accounts, any formal meetings and all insurance and reinsurance transactions. An Insurance Manager can offer many other services that are of value to his clients including the following:-

  • assistance with incorporation and licensing
  • bookkeeping and accounting functions, including periodic reports;
  • setting up reinsurance programmes;
  • advice on policy rating, wording and issuance;
  • claim administration and loss control;
  • audits (through a recognized accounting firm);
  • advice on actuarial services;
  • asset management and investment services, including operation of local bank accounts;
  • statistical and management reports;
  • advising on and operating underwriting procedures.

The fees charged by the Mauritius Insurance Managers are normally calculated as a percentage of gross premium and are scaled according to premium volume.

The rates may be as follows but also depend on the volume of transactions:

  • Premium USD 0-1 million:Fee 4-5%
  • Premium USD 1-5 million: Fee 2-4%
  • Premium exceeding 5 million: Fee 1-2%

The Mauritius Insurance Managers would normally take 10% of the investment income in respect of retained premium in the captive.

Tax Residence Certificate

In order to qualify for benefits under the various Double Taxation Treaties (DTA) available, the Company must apply for a Tax Residence Certificate (TRC). The following criteria are applied in order to satisfy the test of effective management and control from Mauritius.

  1. There must be a minimum of TWO directors resident in Mauritius
  2. Board meetings should be initiated and chaired in Mauritius, where held by telephone or other electronic means. It is recommended that at least one physical board meeting be held in Mauritius every year.
  3. The company should route its investments and other transactions through a bank account in Mauritius.

The Company may be incorporated with the two nominee Mauritius resident directors acting as first shareholder. Upon incorporation, the non-resident directors may be appointed by resolution of the members and the transfer of shares from nominee shareholder to the real Shareholders may be effected at the First meeting of the Board of Directors.

The reporting requirements include filing the following annual documents with FSC:

  • audited financial statements
  • Certificate of margin of solvency
  • Certificate of liquidity ratio
  • Actuarial valuation of adequacy of premiums and loss reserves (for long term business)

 

Jurisdictions

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FAQ
What is offshore?

The word "offshore" has no precise legal dictionary definition, it simply means "situated or operating in a foreign country or at some distance from the shore" and reflects the fact that most low tax jurisdictions are islands.

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Portfolio of Laws
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