Facts you need to know about a Mauritius Offshore Company
August 11th, 2016
Port Louis, The Capital of Mauritius.
Mauritius has carved an enviable reputation as a thriving International Financial Center since the passing of the companies act in 2001. Its success as an International Financial Center is largely dependent on the country's wide pool of qualified professionals whose expertise is sort after by multi-national corporations as well as locally incorporated corporations.
There are a number of business types that are provided for by the Financial Services Act of 2007. This piece of legislation simplifies the regulatory system and combines the legislative frame work of the global business sector. Companies that are resident in Mauritius may want to expand their operations overseas. There is a form of business organization under the Financial Service Act of 2007 that allows for this. The company can apply for a Global Business license which will then allow the company to carry out business outside Mauritius. GBCs can undertake all kinds of business anywhere across the globe like investments in Africa and other parts of the world and carrying out trade in a similar scale.
What is a Mauritius Global Business Company 1 (GBC1)?
A GBC1 is a corporate entity registered in Mauritius that has a license from the Financial Services Commission as a Category 1 Global Business. With such a license the business is allowed to conduct business outside Mauritius.
A GBC 1 can either be a branch for a foreign company or a locally incorporated company. A foreign company can also be re-domiciled and continue operating as a GBC1 if the foreign law allows it. There is no minimum or maximum capital requirement for starting a GBC1 and the share capital is expressed in other currency other than the Mauritian Rupee. The finance act of 2010 changed things a bit for such corporations as they are not prevented from;
· conducting business in Mauritius
· trading with persons who are residents in Mauritius and,
· holding shares or other interests in a company that is resident in Mauritius
A GBC 1 company is also allowed to carry out any business to the extent that is not unlawful or working against public interest. The company’s business conduct should not also damage the good repute of Mauritius as a center for financial services.
Aside from the category 1 business type there is also another type of business license that allows a business to conduct their business away from Mauritius. This type of corporation is the Category 2 Mauritius Global Business. Both GBC 1 and 2 offer a high level of confidentiality and the choice between either of the two is usually determined by the specific needs of the business.
The Global Business Company of category 1 is resident in Mauritius for tax purposes this makes it eligible for the benefits that come with the double taxation treaties of Mauritius with other countries. The Global Business Company of category two on the other hand is tax exempt and therefore is mostly chosen where no tax benefits are sought.
Mauritius beach aerial view of Bain Boeuf Beach in Grand Baie, Pereybere North.
What is a Mauritius Global Business Company 2 (GBC2)?
A category 2 Global Business Company is a private entity that carries out business with non-residents. It provides opportunities for trading activities and investment holdings for the people it conducts business with. It does not require a large amount of initial capital to start and is applicable to any size of company.
The requirements for registering a Global Business Company of category 1
A GBC 1 can be formed as one of three forms of business entities namely; a Trust, Partnership or Societe. In other scenarios a GBC 1 can also be set up as a Protected Cell Company (PCC). The PPC is a legal framework that is composed of cellular and non-cellular assets. It allows for legal segregation of assets in each cell whether owned by individuals or corporations. The Protected Cell Companies (Amendment of Schedule) Regulations of 2005 outline a wide range of applications in which a PPC would be a viable choice.
The requirements for the registration of a GBC 1 are as follows;
· The corporation should have a minimum of 2 directors who reside in Mauritius who are aptly qualified for their positions and have the ability to exercise independence of mind and sound judgment.
· The company should have meetings for directors and include at least 2 directors from Mauritius.
· The corporation should maintain its principal bank account in Mauritius.
· The company should prepare its statutory financial statements and intends to have such financial statements audited in Mauritius.
· The company should keep its accounting records at its registered office in Mauritius at all times while it remains operational.
Some newer requirements for GBC 1
The FSC gave out new substance guidelines to be applied to global business companies and said guidelines were effected from 1st January 2015. In addition to the requirements above a global business company will also have to meet one of the following criteria;
· The corporation should have physical offices in Mauritius.
· The corporation’s constitution should have a clause whereby disputes are solved by arbitration in Mauritius
· The corporation’s shares should be listed on a securities exchange listed by the commission.
· The corporation should have or expected to acquire in the next 12 months, assets worth a minimum of $100,000 in Mauritius. This excludes interest from other corporations holding a global business company license or cash held in the bank account.
· The corporation should have a full-time employee at administrative/technical level who resides in Mauritius.
At the time of registering the company with the FSC the following documents must be provided;
· the application form appropriately filled in and signed
· verified supporting documents
· requisite processing fees and other fees
Trois Mamelles mountain over Curepipe on Mauritius.
Requirements to register a Global Business Company of category 2
Offshore trading services can use a Mauritius global business company of category 2 to run their business activities that are conducted outside the country. Global business companies of category 2 are required to have a registered agent at all times. A management company acts as the registered agent and represents GBC 2. Registration of GBC 2 takes about 3 to 4 days to complete. The criteria for registering GBC 2 are as follows;
· The names of beneficial owners and directors of the company should be disclosed to relevant authorities, however, the information is not disclosed to the public and a company can use nominee shareholders and directors for complete anonymity.
· The company should submit a summary of its business objective.
· The company is not allowed to have bearer shareholders
· The company is allowed to have corporate directors.
· Company registers, minutes and accounting records must be kept at the registered office or a place specified by the directors.
· Board meetings may be held in or out of Mauritius.
When the GBC 2 is ready to be registered the company must provide the following documents to the FSC, through the registered agent;
· A dully signed and filled in application form.
· Verified supporting documents.
· The processing fees and other relevant fees applicable.
The benefits of a Mauritius Global Business Company (GBC 1 and 2)
Available resources and supplies
As countries develop they present a chance for multi nationals to come in, invest and make huge profits. Such companies have the ability to move their raw materials around the globe and source them from around the globe too.
Increased revenue streams
The primary goal of going global is tapping into markets that had not been exploited before. When the opportunities at home dry up going global can be vital to keeping the company afloat. Success in different markets broadens the company’s customer base pushing revenues up.
Larger pool of talent
While streamlining the global work culture of a company is a difficult thing there is the benefit of accessing new talents. The ability to combine talents from different parts of the globe to work towards a common goal is a huge plus for the company. Having a diverse workforce helps the company penetrate more markets since employees are able to relate with many populations.
Aerial view of Port Louis, Mauritius.
What kind of business is a Mauritius global business?
Such a company is a tax resident of Mauritius, an advantageous position for investment and investment holding purposes. Aside from the tax treaties of Mauritius and other countries which benefit the company it also gains from reduced withholding taxes when it comes to payment of dividends and royalties abroad as well as the absence of capital gains tax. A GBC 1 can also be used to hold rights to intellectual property such as industrial designs, copyright rights, trademarks, patents, service marks and other collective marks. A shoe making company that seeks to take its brand further is a good example of such a company.
A GBC 2 allows for more flexibility and is ideal for holding and managing private assets. Such companies are usually formed for investment holdings and often function as investment companies for high networth individuals. The company also offers a lot of confidentiality as its financial records are filled with the FSC rather than the Registrar of Companies therefore the records cannot make it to the public eye.
Accounting requirements for GBC 1 and 2
Global business companies of the first category (GBC 1) are required by law to file annual returns which should at all times be kept at the office premises of the company in Mauritius. A global business company of the second category (GBC 2) is not required to file such returns and does not face any penalty should it go without filing.
Relevant acts governing a Mauritius Global Business Company
There are several regulations administered by the FSC which include the following;
· Financial Service Act of 2007
· Securities Act 2005
· Protected Cell Companies Act 1999
· Securities Act 2005
· Insurance Act 2005
· Captive Insurance Act 2015
Do Mauritius global business companies need registered agents?
A role of a registered agent is taken by a management company that acts as a representative of the global business company. Both the GBC 1 and 2 require a registered agent who helps out with registration of the company.
Requirements for starting a global business company
Minimum shareholders; 1
Minimum directors; 1, but 2 are required for tax treaty access
Company secretary required? Yes
Registered officer required? Yes
Disclosure of beneficial ownership to authorities; No
Minimum shareholders; 1
Minimum directors; 1
Company secretary required? Yes
Registered officer required? Yes
Disclosure of beneficial ownership to authorities; Yes
Contact us if you need assistance setting up a Mauritius Global Business Company (GBC 1 and 2)