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Through this article, BBCIncorp will provide you with essential information about the Mauritius Global Business Corporation model to assist you in determining the best strategy for your company’s success. Let’s explore the key aspects of the GBC structure and unlock its potential for your business.
Introduction to Global Business Corporation (GBC) in Mauritius
A Global Business Corporation (formerly known as GBC1) is incorporated under the Companies Act 2001 of Mauritius and licensed by the Financial Services Commission.
GBCs are authorized to carry out a wide range of activities including but not limited to trading, investment holding, intellectual property holding, fund management, and other related activities. The records of all GBCs are classified and are not open to the public for assessment.
Foreign investors typically open this type of entity for financial services (with additional license requirements) and investment holding businesses (especially when their overseas income originates from dividends, interest, and capital gains).
What are other common business entities in Mauritius?
Apart from Global Business Corporations, there are two typical types of companies in Mauritius:
- Domestic Companies
Incorporated under the laws of Mauritius, a domestic company primarily intends to carry out business activities within the country. These companies are required to register with the Registrar of Companies and to comply with the provisions of the Companies Act 2001.
- Authorised Company (AC)
Authorised Companies are incorporated in Mauritius but it does not carry out business activities within the country. These companies are primarily used for holding assets, investments, and international business transactions.
Foreign entrepreneurs should consider a Mauritius Authorised Company as a potential investment option.
Benefits of doing business as a GBC in Mauritius
What does a GBC offer that other entities don’t?
Mauritius is an advantageous business location for both onshore and offshore companies, but what differentiates a Mauritius Global Business Corporation from others?
Flexible corporate structure
GBCs can be structured in various ways, including as a limited company, a partnership, or a trust. This provides flexibility for investors to choose the business type and tailor their corporate structure that best suits their needs.
The most common structure for foreigners is the Limited Company (LC).
A capability to conduct business both inside and outside Mauritius effectively
GBCs are obliged to conduct business outside Mauritius and can only carry out business operations within the country with Mauritian residents in certain cases given that the laws permit. You are allowed to sign contracts with local clients and invoice them following particular legal regulations.
In contrast, an Authorised Company, owned by a non-Mauritius citizen, tends not to operate inside Mauritius, and it is managed and controlled remotely from outside Mauritius as well.
Special tax regimes
Although the rate of tax for Global Business Corporations stands at 15%, they can benefit from a partial exemption regime (applicable for certain qualified income activities) whereby 80% of the income streams will be debarred from tax, subject to meeting substance requirements.
GBCs are also eligible for a range of tax benefits, such as no withholding tax on dividends and interest paid to non-residents and no capital gains tax on the sale of shares. They are tax residents of the jurisdiction and benefit from the double taxation treaties after attaining the required Tax Residence Certificate.
Moreover, companies engaged in the export of goods are liable to be taxed at the rate of 3% on the chargeable income attributable to exports based on a prescribed formula.
Overall, GBCs are subject to a more robust regulatory framework, and as tax residents, they may be eligible for more tax treatment offered by the Mauritius jurisdiction than Authorised Companies.
Considering between GBCs and ACs for a Mauritius offshore company is common for newcomers. Ultimately, the choice between a GBC, an AC, or a Domestic Company will depend on your business’s needs and circumstances.
General advantages for entrepreneurs doing business in Mauritius
Mauritius is a small island nation located in the Indian Ocean, known for its beautiful beaches, tropical climate, and diverse culture.
In recent years, it has also emerged as a hub for business and investment, offering an ideal environment for entrepreneurs looking to start or expand their businesses.
Business-friendly regulatory environment
The government has implemented policies to attract foreign investment and create a favorable business environment.
For example, to provide financial support to Small and Medium Enterprises (SMEs), Mauritius has established several institutions, including the Mauritius Business Growth Scheme (MBGS) to provide funding, training, and mentoring to eligible SMEs.
Political stability and economic growth
Mauritius rules as a parliamentary democracy with the head of state being the president and the head of government being the prime minister. In addition to a multi-party system and tradition of political stability, the country has consistent economic policies and respect for human rights.
Experienced and reliable workforce
The workforce in Mauritius is known for its skilled labor, proficiency in English and French languages, and good work ethic. The country has a remarkable literacy rate of over 90% and a good number of graduates from universities and technical colleges.
The government has also implemented policies and programs to promote employment and develop the workforce.
Access to international markets
Mauritius has signed many trade agreements with other countries and regions. Not only that, the country provides a well-developed port and airport infrastructure for businesses to import and export goods efficiently. The strong ICT infrastructure in Mauritius facilitates the interaction of Mauritius businesses with global companies and partners.
Want to know more about what Mauritius can provide as a jurisdiction? Feel free to go through our dedicated article on why doing business in Mauritius for more insights.
Requirements for setting up a GBC in Mauritius
Several requirements need to be met to set up a Global Business Corporation (GBC) in Mauritius. Some of these typically include:
A GBC in Mauritius is primarily used for conducting business activities outside of Mauritius, but your enterprise is still regarded as a tax resident of the country. With this feature, what are the noticeable checkpoints when incorporating a Mauritius global business corporation?
- Registered office
The company must have a registered office in Mauritius, which is the company’s official address for legal and administrative purposes.
- Tax residency
As a tax resident in Mauritius, your GBC must be managed and controlled from Mauritius. You will be eligible for the favorable tax regime offered by Mauritius to GBCs.
- Business activities
A GBC must operate its core income-generating activities inside or from Mauritius. This includes activities such as trading, investment holding, asset management, and intellectual property licensing. The company should not engage in business activities in Mauritius, except for incidental activities that are necessary for the company’s operations.
- Substance requirements
The GBC must have a certain level of the substance in Mauritius, which means that they must have a physical office space, local employees, and incurring operating expenses in Mauritius that are proportionate to the level of activities undertaken by the company.
You are obliged to obtain a Global Business License from the Financial Services Commission (FSC) to be regarded as a GBC and conduct business activities.
On top of that, depending on the nature of your business and the type of activities you plan to undertake, other necessary licenses and permits might be required as well, so make sure to prepare carefully beforehand.
- Management requirements
A GBC must be administered by a Management Company, the bridge between your company and the FSC. You will need to assign two local directors, residents of Mauritius who possess qualified expertise, integrity, analytical skills, communication skills, etc.
You will typically need a qualified company secretary (either a qualifying firm/ corporation as regulated in the Sub Part G, part XI of the Companies Act 2001 or an individual) who is a Mauritius resident for smooth operations, so consult with local professionals in advance.
The following steps are generally involved in setting up a Global Business Corporation in Mauritius:
- Decide on the name and submit a reservation form
- Prepare documents, including the Memorandum and Articles of Association, the director’s consent form, the shareholder’s consent form, and other relevant documents.
- Submit necessary documents to the Registrar of Companies
- Pay the required fees at the time of submission of the application.
Once the application is received, the Registrar of Companies will review it and approve it if all requirements are met through a letter of intent. After approval, the GBC will be registered and a Certificate of Incorporation will be issued.
Your company must then apply for a license from the Financial Services Commission (FSC) to conduct its business activities as a Mauritius Global Business Corporation.
What requirements should be kept in mind when opening a company in Mauritius? Understand how to open a company in Mauritius while complying accurately with the legal regulations through our dedicated article
There are no specific minimum capital requirements for setting up a GBC in Mauritius. However, the GBC must have adequate resources to undertake its business activities and meet its obligations.
The level of capital required would depend on the nature of the GBC’s business activities, the scale of its operations, and the level of risk involved. Generally, the GBC must have enough capital to cover its operating expenses, such as rent, salaries, and other administrative costs, as well as any potential liabilities arising from its business activities.
Who should set up and run a Global Business Corporation
A Global Business Corporation in Mauritius can be set up by individuals, partnerships, trusts, or corporations. The individuals or entities that may find GBCs suitable for their needs include:
- International companies
International companies looking to expand their business globally and access new markets can set up a GBC in Mauritius. In addition to having a favorable tax regime, Mauritius has double taxation treaties which make it a popular location for international offshore businesses.
- Small and medium enterprises
Entrepreneurs looking to set up a new business venture can also consider a GBC. The flexible corporate structure and ease of doing business, along with various SME-centered incentives do make Mauritius an attractive location for startups and small businesses.
- Investment funds
Mauritius has established itself as a hub for investment funds, and GBCs can be used to hold and manage investments on behalf of investors.
- High-net-worth individuals
A Global Business Corporation in Mauritius is also recommended for high-net-worth individuals. This entity can be a valuable tool for high-net-worth individuals looking to manage their wealth efficiently while reducing their tax liabilities and benefiting from the ideal level of confidentiality.
It is important to note that the specific applications of GBCs may vary depending on the needs and objectives of the individual or entity. Take your time navigating through the information and decide what structure would fit your company the most.
Several applications of Global Business Corporations in Mauritius
GBCs in Mauritius are commonly used for International Trading, Investment Holdings, Intellectual Property Holdings, Fund Management, Shipping, Aviation and Consultancy Services, Asset and Treasury Management, Credit Financing, Leasing, Occupational Pension Schemes, Retirement Benefits Schemes, Transfer Agents, etc.
GBC accounting and auditing requirements in Mauritius
To maintain its status as a Global Business Corporation, the entity must comply with certain operational and filing requirements. Here are the key accounting and auditing requirements that GBCs must comply with:
- Bookkeeping: The GBC must maintain proper books of accounts of the last 7 completed accounting periods of the company, which must reflect the financial position and performance of the company. This data must be kept under the International Financial Reporting Standards (IFRS).
- Financial statements: Your company must prepare financial statements (in Mauritius currency unless otherwise approved by the Registrar), including a profit and loss account, a balance sheet, and a cash flow statement, on an annual basis following the requirements from IFRS.
- Auditing: You must appoint an auditor registered with the Financial Reporting Council (FRC). The auditor must provide an audit report that complies with the International Financial Reporting Standards, which must be submitted along with the financial statements to the Financial Services Commission.
- Annual return: The GBC must file an annual return with the Registrar of Companies unless exempted by laws (if any), which must include a list of directors, shareholders, and other relevant information.
Compliance with anti-money laundering regulation
Global Business Corporations (GBCs) in Mauritius are required to comply with the anti-money laundering (AML) rules under the Financial Intelligence and Anti-Money Laundering Act, the Prevention of Terrorism Act, and relevant regulations.
For their status to remain valid, GBCs must adhere to all Mauritius’ accounting and auditing requirements. Non-compliance with these requirements can result in penalties and the revocation of GBC status.
In conclusion, setting up a Global Business Corporation (GBC) in Mauritius can provide numerous benefits for individuals and businesses looking to expand their international operations.
The favorable tax regime, political and economic stability, strategic location, and business-friendly environment make Mauritius the right destination for foreign investment. With proper planning and execution, a GBC in Mauritius can provide a tax-efficient and legally compliant structure for international business activities.
If you are planning to set up an offshore company in Mauritius to conduct business outside the jurisdiction only, consider establishing an Authorised Company instead. Contact BBCIncorp for more information and practical advice via firstname.lastname@example.org.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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