With a financial system endorsed by the World Bank and IMF, Mauritius is proving itself to be a competent and resourceful international financial centre.
Mauritius has enjoyed substantial economic growth averaging 5% for the past two decades. The centre has a diversified economy and revenue streams which is based on tourism, textile manufacturing, agriculture, financial services and Information & Communication Technology.
The jurisdiction has carved a solid international reputation for the level of service of its qualified professionals, its user-friendly legislation governing companies and trusts, its fiscally attractive environment and for the quality of its regulation which is seen as firm but at the same time commercially friendly. It is recognized as a leading regional centre for investment holding and structuring given its network of attractive Double Taxation Agreements with several African, Asian and European countries.
The country's adoption of international best business practices and sustainable development policies has been acknowledged by international agencies such as the Organisation for Economic Cooperation and Development (OCED), the Financial Action Task Force (FAFT) and the World Bank (WB).
Attractive Features of Mauritius
- It is sovereign and independent.
- An efficiently regulated financial services centre committed to investors protection with a progressive regulatory framework modelled on the industry’s “best practice” principles and compliant to internationally accepted norms of supervision including those of the Basel Committee on banking Supervision.
- Guaranteed confidentiality for those engaged in legitimate business through express provisions and customary laws governing relationships between banks and customers and between professionals and clients.
- Political stability guaranteed by parliamentary democracy based on the Westminster model.
- Hybrid legal system based on English and French laws. The highest court of appeal is the Privy Council in the U.K.
- No exchange control - profits can be freely repatriated.
- With a population of close to 1.3 million inhabitants, the jurisdiction benefits from a large pool of available graduates, qualified lawyers and accountants. Abundance of qualified professionals – population of 1.2 million people bilingual in English & French
- Well established banking institutions and an international stock exchange.
- Mauritius has also signed Investment and Promotion and Protection Agreement (IPPA) with a number of countries in Africa
- It is a member of the COMESA, SADC and the Indian Ocean Rim Association for Regional Corporation.
- Membership to the International Court of Justice; the International Centre for Settlements of Investments Disputes; and the Multilateral Investment Guarantee Agency.
- Strategic Time Zone (GMT+4). Business can be conducted with the Far East in the morning, Europe around mid-day and the USA in late afternoon.
- State-of-the-art telecommunication facilities. Connected to the SAFE and LION cables.
- Low operational costs.
- Security and safety.
- Pleasant living conditions.
- No withholding tax on dividends, capital gains and interest.
- Network of Double Taxation Agreements.
Fiscal Incentives of Mauritius
- Low tax rates (0% - 3%).
- No withholding tax on remittance of branch profits.
- No withholding tax on interest, royalties and dividends.
- No capital gains tax.
- Carry forward of losses limited to 5 years except for losses attributable to annual allowances.
- Royalties, interest and service fees payable to foreign affiliates are allowable as expenses provided they are reasonable and correspond to actual expenses incurred.
- No estate duty, inheritance or wealth taxes.
- No stamp duties, registration duties and levy.
- Zero rated Value Added Tax for global business transactions.
- Trusts can elect to be non–resident and be tax-exempt in Mauritius.
- Trusts can hold GBC1 licences and avail of DTA benefits.
FOREIGN TAX CREDIT IN MAURITIUS
GBC1 companies are liable to taxes at the rate of 15% but provided that the GBC1 owns at least 5% of an underlying company, credit will be available on foreign tax paid on the income out of which the dividend was paid (‘underlying foreign tax credit’).
When a company not resident in Mauritius, which pays a dividend, has itself received a dividend from another company not resident in Mauritius (a ‘secondary dividend’) of which it owns either directly or indirectly at least 5% of the share capital, such dividend will be allowable as foreign tax credit and an underlying foreign tax credit will also be available.
Tax relief is available within the network of DTAs, whereby a GBC1 holding a Tax Residency Certificate may be relieved of 80% of the normal tax rate of 15%, thus bringing the effective rate to 3%.
MAURITIUS DOUBLE TAXATION AGREEMENTS 'DTA'
Mauritius has focused the development of its global business sector on its continuously expanding Double Taxation Agreement network. With a widespread treaty network, Mauritius offers investors greater opportunities to plan their investments abroad through the use of the Global Business Company Category 1 (“GBL1”). The DTA network provides for interesting tax planning opportunities thereby enhancing the image of the jurisdiction as a tax planning centre.
The attractive concessions provided by those treaties include:
- Elimination of double taxation through tax credit equivalent to Mauritian tax.
- Reduction in withholding taxes on dividends, interest and royalties.
- Exemption from capital gains.
- Possible exemption on interest payments on loans.
Management & Control
In order to access the DTA, a GBL1 company should ensure that effective management and control is in Mauritius. On application to the Mauritius Revenue Authority for Tax Residency Certificates, the following conditions shall be fulfilled:
- At least two directors are resident in Mauritius;
- All Board meetings are chaired from Mauritius;
- All statutory records and books of the company are maintained at its registered office;
- The Company Secretary is resident in Mauritius;
- All funds shall flow through the main bank account of the company in Mauritius;
- Accounts are audited in Mauritius.
Treaties Awaiting Ratification
Russia, Lesotho, Kenya, Nigeria
More information on Mauritius Double Taxation Agreements