Incorporating IBCs in Mauritius

In Mauritius, the legislation for offshore companies is mostly subject to the provisions of Companies Act 2001 and Financial Services Development Act 2001. A few administrative relaxations have been effected to suit the particular exigencies of the fast world of international finance.

Also, in order to provide incentives to offshore investors, some provisions of the domestic laws have been waived. Over 20,000 offshore and international companies have been registered in Mauritius, including 45 offshore investment funds. Offshore companies registered in Mauritius are tax free and there is no requirement to file annual returns or audited statements with government authorities

The time taken to incorporate a company in Mauritius ranges from 3 days to around two to three weeks.

Documentation

All incorporation documents are in English. The company name could be in Chinese, if desired, and the documents legalized by the Chinese Embassy in Mauritius.

An offshore company based in Mauritius may do business anywhere in the world. There is no requirement for Directors and Shareholders to be residents in Mauritius and they can be of any nationality. Meetings of Directors and Shareholders can be held anywhere in the world, either in person or by phone.

Mauritius has recently established itself as an offshore financial center, with the passing of the Companies Act in 2001. The form of offshore company is the Global Business Company (GBC) Category 2 which is similar to the British Virgin Islands IBC.

Corporate structure & administration

The directors may exercise all such powers of the company that are not reserved to the shareholders under the act, in the constitution or in a unanimous shareholders agreement. GBL1 companies can obtain a tax residence certificate and take advantage of the Mauritius double taxation treaty network. The board of directors at the offshore corporation shall consist of at least two residents to satisfy the requirements to obtain a tax residence certificate. Also, all meetings shall be initiated and chaired from Mauritius and all financial transactions channelled through bank accounts in Mauritius.

A GBL1 company is required to file audited financial statements within 6 months of its financial year end, with the FSC. The directors may exercise all such powers for the company that are not reserved for the shareholders under the act, in the constitution, or in a unanimous shareholders agreement. The board of directors shall consist of one of more persons who may be individuals or companies, and who need not be resident.

The identity of Directors and Shareholders must be provided to the Registrar of Companies through the filing of a Consent Form on incorporation. Confidentiality however, can be maintained through the use of nominee Directors & Shareholders, provided by Maritime International Ltd.

Taxation

A GBL1 company is liable to taxation in Mauritius but at a rate of 15% instead of the 25% rate applicable to domestic companies. However, a GBL1 company is entitled to a deemed tax credit of 80% or may opt to claim credit for actual tax suffered in another jurisdiction, if it's more favourable. The effective tax rate is low with a benefit of obtaining a tax residency certificate. A GBL2 company cannot transact business in Mauritian Rupees or with Mauritian residence.

A GBL2 need not have its accounts audited and accounting records required are those which the directors consider necessary to reflect the financial position of the company. All the income of a GBL2 is exempt from tax in Mauritius.

Benefits of IBCs in Mauritius

The most obvious benefits being offered by the offshore sector in Mauritius can be summarised as follows:

• Secrecy and confidentiality are guaranteed by law with regard to all information submitted to the FSC.

• There is no exchange control restriction and profits can be freely repatriated.

• There is no withholding tax on dividends, interest and royalties.

• There is no inheritance tax

• There is no compulsory participation of local investors in offshore companies.

Share capital is unlimited and there are no extra fees for high capitalization. The annual fees payable to the government in the case of GBLI companies cover 15% of profits in addition to USD 1,715. For GBL2 companies, its USD200.

International Business Companies in Mauritius cannot:

• Engage in Banking, Insurance, Trusts, or Trusteeship services.
• Engage in gaming.
• Raise capital from the public.
• Provide financial services, including financial consulting.
• Be a Fiduciary in an investment fund or any collective investment scheme.
• Be a Fund Manager.

Otherwise the company can engage in the usual commercial activities.

The names - Bank, Insurance, Assurance, Authority, Government, Mauritius, National, President, Presidential, Regional, Republic, State, Municipal, Chartered, Co-operative, Chamber of Commerce or any name which could suggest the patronage of any level of government in Mauritius or elsewhere, require the consent of the Minister.

The suffixes like Limited or Ltd, Limitee or Ltee, Corporation or Corp., Incorporated or Inc, Societe Anonyme or SA and virtually any others recognized by other countries could be used.

Procedures for incorporation

This usually involves submission of the Memorandum and Articles of Association and a Certificate from the Registered Agent confirming compliance with the requirements of the Ordinance. The application must be supported by a Legal Certificate issued by a local Lawyer certifying that local requirements have been complied with. Finally, directors and shareholders must execute consent forms and these must be filed with the Registrar of Companies. Annual licence fees of USD135 and USD65 must be remitted to FSC and the Registrar of Companies respectively. Companies holding a Category 2 Global Business License are required to maintain financial statements to reflect their financial position with the Registered Agent but are not required to file accounts with the authorities.

GOWEALTHY.COM © 2010
For comments: editor@gowealthy.com
For further information, write to enquiry@gowealthy.com
Source: fiduciary.com
Image source: Risevision.com