A company holding a Global Business Licence Category 1 may either be locally incorporated or be registered as a branch of a foreign company. A foreign company may be re-domiciled and continue as a Mauritian GBC 1 if the foreign law so permits.
GBC1 companies, as tax incentive companies, are subject to taxation at a rate of 0–3%. However, they can structure their affairs to take advantage of a series of tax credits, which may significantly reduce the effective rate of taxation, or they may elect to pay a higher rate of tax to satisfy controlled foreign company legislation in the country of residence of a parent company.
A GBC1 can conduct both financial services and non-financial services. A specific licence is required for different types of "financial services" and "financial services business". "Financial business activities" are defined to include:
Distribution of financial products
Occupational pension scheme
Pension fund administrators
Pension scheme management
Retirement benefits scheme
Registrar and transfer agent
Such other financial business activity as may be specified in FSC rules
A GBC1 demonstrating substance can benefit from access to Mauritian Double Taxation Agreements. The main requirements are:
Minimum of 2 resident directors capable of exercising independence of mind and judgment;
Holding of board meetings in Mauritius and demonstrating that central management and control is in Mauritius;
Maintenance of all accounting records;
Audited financial statements must be filed with the FSC within six months of the balance sheet date;
The use of local bankers;
Local substance supported by having local corporate secretary and administrators, auditors, office and communication facilities and staff;
The Financial Services Commission has given effect to additional requirements for determining ‘Management and Control’ of a GBC 1 for the purposes of tax residency. A GBC 1 must satisfy AT LEAST ONE of the following:
Has office premises in Mauritius; or
Employs on a full time basis at an administrative/technical level, at least one person who shall be resident in Mauritius; or
Its constitution contains a clause whereby all disputes arising out of the constitution shall be resolved by way of arbitration in Mauritius;
It holds or is expected to hold within the next 12 months, assets (excluding cash held in bank account or shares/interests in another corporation holding a Global Business Licence) which are worth at least USD 100,000 in Mauritius;
Its shares are listed on a securities exchange licensed by the Commission; or
It has or is expected to have a yearly expenditure in Mauritius which can be reasonably expected from any similar corporation which is controlled and managed from Mauritius.
Careful structuring and on-going management is required to benefit from tax treaties.
CATEGORY 2 GLOBAL BUSINESS COMPANY (GBC2)
The GBC 2 is a tax exempt, low cost vehicle but does not benefit from the Mauritian tax treaties. It is the ideal for a company which intends to carry on trading and asset holding. It cannot however conduct financial services business.
Must have a registered office and agent in Mauritius, and its register of members, directors and secretary as well as particulars of charges must be filed;
Should submit an outline of the business objective and identity of the promoter, beneficial owner and ultimate beneficial owner must be provided to the FSC;
Is allowed to have Corporate directors;
Is not allowed to have bearer shares;
May hold board meetings in or outside Mauritius;
Must file an annual unaudited financial summary with the FSC within six months of the balance sheet date;
Must keep accounting records, minutes and registers at the registered office or at such other place determined by the directors
A foreign company may be re-domiciled if the foreign law so permits and thereafter continues as a Mauritian global business company.
Mauritius has asserted itself as a jurisdiction for funds domicile by combining the relatively low rate of domestic taxes, competitive cost structures and attractive network of Double Taxation Agreements with African and Asian countries.
The Companies Act, the Partnership Act and the Securities Act and Rules permit establishment of open and closed ended schemes, retail, professional, hedge, private equity and venture capital funds.
Funds may also be established as protected cell companies.
Government encourages the setting up of local fund management and advisory companies with local presence. Low cost professional and administration support combined with treaty benefits enable efficient operation of funds from Mauritius.
PROTECTED CELL COMPANY
The Protected Cell Company (PCC) in accordance with the Protected Cell Companies Act 1999, is a distinct legal structure made up of cellular assets or non-cellular assets or a combination of both cellular and non-cellular assets.
The PCC structure is particularly attractive for global business funds, both collective investment schemes and closed-end funds, as the cellular assets attributable to a cell will only be affected by the liability of the company arising from transactions attributable to that cell. Although the PCC is recognized as a single legal entity, this ring-fencing of assets provides increased protection to investors of individual cells.
There is no limitation as to the number of cells a PCC can create. It is a very flexible structure which provides significant cost effectiveness prospects. PCCs can also be used for asset holding, structured finance and insurance business.
Limited Partnership is an ideal and flexible vehicle to carry out investment activities. It carries the additional advantage of being structured as a look-through vehicle for tax purposes if so desired.
The Mauritian Limited Partnership (LP) combines features of both a company and of a partnership. It can have separate legal personality just like a company while at the same time enabling some partners, known as limited partners, to contribute and participate in the returns of the LP without being engaged in the day to day management of the LP. The General Partner is responsible for managing the business and affairs of the Limited Partnership and is personally liable for the debts of the partnership. A LP is required to have a registered agent in Mauritius.
LIMITED LIFE COMPANIES
Companies can be incorporated as or converted to Limited Life Companies and, where properly adapted, can fulfill the functions of a limited partnership. The Limited Life Company is widely used for private equity funds and management companies.