Mauritius has demonstrated to be the ideal destination for your African investment. Mauritius, a volcanic island nation in the Indian Ocean, is best known for its beaches, lagoons and reefs. However, the island nation in the Indian Ocean, about 2,000 km’s off the southeast coast of the African continent, has emerged as an International Financial Centre of choice due to its robust regulatory and qualified labour force.
The people of Mauritius are multiethnic and multicultural. Most Mauritians are multilingual; Creole, English, French, and Mandarin are used. The island’s parliamentary system is modelled on Westminster, due to its past history as a French and British colony. The island has also retained the Judicial Committee of the Privy Council as its final court of appel and is highly ranked for democracy and for economic and political freedom.
Mauritius has demonstrated a high commitment in setting OECD norms and ensuring active collaboration with other jurisdictions by exchanging information. In this context, the Financial Services Commission of Mauritius (FSC) has signed various Memorandums of Understanding with both international, regional and national regulators and various associations.
The island has earned the trust of global investors through its recognition by international bodies such as IOSCO, IAIS, FATF and IFSB. It was among the first jurisdictions to be included back in April 2009, on the White List of OECD.
As at date, Mauritius has signed and ratified 42 Double Taxation Avoidance Agreements (DTAA) based on the OECD model, with developed countries as well as the emerging African economies. A DTAA is an agreement between two countries with an objective to avoid taxation of the same income in both countries.
Mauritius Global Business Companies
There are two types of Global Business companies namely the Category 1 Global Business Company (“GBC1”) and the Category 2 Global Business Company (“GBC2”). Both company types are regulated by the FSC.
Both entities offer confidentiality as no party information is publicly available. The choice between which company type to set-up will depend on various factors, depending on the proposed activities of the entity and where the actual operations shall take place. Global Business Companies can undertake activities ranging from investments in Africa and other parts of the world to trading. While the GBC1 is resident for tax purposes in Mauritius and can thus take advantage of the benefits of the DTAA’s Mauritius is party to, GBC2’s are tax exempt and are characteristically used where no treaty benefits are sought.
How does it work?
A GBC1 is deemed to be resident in Mauritius and benefits from the network of DTAA’s. This GBC1 is liable to tax in its resident country, that is, Mauritius at a flat rate of 15%. However, the GBC1 is entitled to a deemed foreign tax credit of 80% on its foreign source income. This effectively reduces the tax liability to a maximum of 3%. For more information, please download our factsheets at our product section.
Mauritius is party to various DTAA’s with various African parties namely; Botswana, Lesotho, Madagascar, Mozambique, Namibia, Rwanda, Senegal, South Africa, Swaziland, Tunisia, Uganda, Zambia and Zimbabwe
Furthermore, the island has entered into Investment Promotion Protection Agreements (IPPA) with 36 countries throughout the globe, especially with 17 African countries which are opening a new window of opportunities, namely Benin, Botswana, Burundi, Cameroon, Chad, Comoros, Ghana, Guinea, Madagascar, Mauritania, Mozambique, Rwanda, Senegal, South Africa, Swaziland, Tanzania and Zimbabwe.
These IPPAs offer full protection of all foreign investments through Mauritius with respect to expropriation and social unrest in the contracting states. Provisions also cover arrangements for settlement in case of any dispute between the investors and the contracting states.
Mauritius as an International Financial Centre
Several other factors have contributed to the emergence of Mauritius as an International Financial Centre. Amongst them, a highly-efficient banking system where the major international Banks are present, together with international Law Firms and the free repatriation of foreign currencies.
The island is also conveniently located in the time zone at GMT+4, thus, enabling commerce and business to be achieved within a single day with the major markets in the United States, Europe or Asia.
Mauritius remains the preferred jurisdiction for a rising number of global investors who rely on its efficient, safe and secure platform. This is testified in 2015 by the World
Bank – Doing Business 2015: Going Beyond Efficiency Report, which ranked Mauritius 1st in Africa and 28th globally for the ease of doing business; in 2015, Mauritius topped the list of African countries in the Mo Ibrahim Index of Corporate Governance.