Mauritius Offshore Company Formation

Offshore companies incorporated in Mauritius are now known as ‘global business companies category 1’ or GBC1 for short, and they are entities used increasingly by non-resident Indians (or NRIs) for tax friendly investment into India.

Mauritius offshore company formation can be tricky and time consuming compared to incorporation in other tax efficient jurisdictions, but because of a series of unique advantages offered by a GBC1 to many people, not just NRIs, it can be well worth the commitment and time investment to set up an offshore company structure in Mauritius. 

Company law in Mauritius is mainly derived from English law and the handling of offshore or global business companies is regulated under the Companies Act 2001.  Mauritius is considered to be an economically and politically stable jurisdiction and its main ‘offshore’ attraction is that GBC1 companies can be established as being tax resident in Mauritius. 

Because Mauritius has double taxation treaties with Belgium, Botswana, China, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Russia, Singapore, South Africa, Sri Lanka, Swaziland, Sweden, Thailand, U.K and Zimbabwe those who wish to invest in any one of these countries could make use of a GBC1 through which to invest and then remit all investment profits made back to Mauritius and legally avoid at least the majority of withholding tax.

It is for this reason alone that non-resident Indians who have a special investment status in India use Mauritius offshore companies.  India is a country in which it is still difficult to invest and yet a country where investment opportunity is currently unsurpassed; NRIs have an advantage over other expatriate or international investors when they apply for investment approval from the Reserve Bank of India because their applications are usually processed far more quickly.  As long as an auditor in Mauritius can present an Overseas Auditor’s Certificate to prove that the GBC1 has at least a 60% NRI ownership then investment approval is usually given swiftly.

After Mauritius offshore company formation has taken place the rate of taxation such an entity will be subject to depends on a number of factors.  Currently new GBC1 companies have to pay 15% tax on profits but are entitled to an 80% foreign tax credit.  Companies can be established by a single shareholder but must have a director who is ordinary resident in the jurisdiction.  There is an annual reporting requirement which is enforced and references, passport copies and possibly details of business and financial records will be required for shareholders and directors.

Mauritius offshore company formation costs in the region of USD 2,000 and can take around 10 working days.  There is an annual government fee of USD 1,500 to pay and usually those who incorporate a global business company category 1 in Mauritius require domiciliary services as well which start from around USD 1,000.