Company Report: Mauritius GBC1 Company
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Asset protection
Anonymous banking
Cyprus

Introduction

The Global Business Company Category 1 (GBC1) replaced the old Offshore Company under the Companies Act 2001.

A company incorporated under the previous Companies Act 1984, or a registered branch of an overseas company, used to be able to apply for Offshore Company status under the Offshore Business Activities Act 1992, which varied some of the terms of the 1984 Act and set up the MOBAA (Mauritius Offshore Business Activities Authority) to supervise the offshore sector. The 1992 Act listed the activities which MOBAA would approve:

• Aircraft leasing and financing;
• Authority approved activities;
• International consultancy services;
• International employment services;
• International financial services;
• International franchising and licencing
• International management of assets;
• International technology services including data processing;
• International trading;
• Offshore banking operations;
• Offshore management of funds including pension funds;
• Offshore insurance operations;
• Shipping operations including ship management;
• The operation of a headquarters.

MOBAA has now been abolished and replaced under the Financial Services Development Act 2001 by a Financial Services Commission; the existing legislation was largely ‘grandfathered’ into the new regime.

Because the Mauritius GBC I Companies are resident in Mauritius they are consequently subject to tax. However, they benefit from both tax credits and a longstop tax rate of 3%. Correctly structured and managed Mauritius GBC I companies may access Mauritius’ network of 28 tax treaties. Neither capital gains nor withholding taxes are levied. Consequently, Mauritius GBC I companies are used by tax practitioners and businesses to structure investments into Mauritius’ treaty partners, which include China, India, Luxembourg and Thailand.

GBC1 companies are suited to public financial operations such as fund management; for holding private assets, a GBC2 (International) Company or an Offshore Trust is more suitable.

Unlike a GBC 2 company, a GBC 1 company can also be licensed to provide services as an Collective Investment Scheme (Offshore Investment Fund), Fund Administrator, etc.

Regulation

Mauritius GBC I Companies are governed by The Companies Act, 2001 and regulated by the Mauritius Financial Services Commission. They are subject to compliance and reporting regimes similar to those of Hong Kong or UK companies.
All companies seeking to benefit from this status are granted licenses on a case by case basis by the regulatory authorities in Mauritius. This procedure demands the submission of a detailed business plan and disclosure of beneficial ownership.

Incorporation of the Mauritius GBC1 Company

Choosing a name

Any name that is identical or similar to an existing company or any name that suggests the patronage of the President or the Government of Mauritius will be rejected. The Company Name can be registered in English or French.

The following words cannot be used in English or any other language without consent or license: Authority, Bank, Chamber of Commerce, Chartered, Cooperative, Fund, Government, Insurance, Investment or Management Services, Mauritius, Municipal, National, Regional, Presidential, Republic or State. Names should end with Limited or Corporation.

The following suffixes to the company name are allowed:
Limited, Corporation, Incorporated, Public Limited Company, Société Anonyme, Société Anonyme à Responsabilité Limitée, Sociedad Anónima, Berhad, Proprietary, Naamloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or the relevant abbreviations.

Company requirements

The GBC1 Company must be incorporated and maintained in Mauritius by a licensed management company or law firm.

Incorporation time and procedure

Once name approval has been obtained, three copies of the Constitution are submitted, together with a notice of the First Directors, Secretary and location of the Registered Office, and consent forms signed by the Officers.

Normally it takes about three weeks to set up a Mauritius GBC I Company

Compliance

General

For the incorporation of a Seychelles IBC it´s necessary to use a registered office in Seychelles, which can be provided by the registered agent.
The registered office is used for communications with the local government. All government related mail, will be send to the registered office in Seychelles.
It is advised to appoint a secretary who is present at the registered office, so all requirements and responsibilities can be easily fulfilled.

Board members

The shareholders of the GB1 Company need to appoint at least one director who must be natural person. Treaty access requires a minimum of two local directors.

Company secretary

A qualified resident company secretary must be appointed.

Share capital

The usual authorised share capital is US$ 1 million with all of the shares having a par value. The minimum issued share capital is one share of par value.

Registered shares, preference shares, redeemable shares and shares with or without voting rights.

The permitted classes of shares are:

• Registered shares
• Shares with or without voting right
• Preference shares
• Redeemable shares
• and shares with or without voting rights

Administration

In accordance with Mauritius accounting and tax law, a Mauritius GBC1 is required to submit annual audited financial statements to the Mauritius Financial Services Commission and income tax authorities.

Taxation

General

Companies pay a fixed annual licence fee of US$ 1,500 and a one-off licence application fee of US$ 500 to the Financial Services Commission. On incorporation a once-off fee of US$ 200 is payable to the Registrar of Companies. Thereafter a further US$ 200 is payable annually. Companies are resident in Mauritius for tax purposes. There is no capital gains taxation in Mauritius and there are no withholding taxes on the payment of dividends, interest or royalties from Companies. There are no stamp duties or capital taxes. Companies holding Category 1 Global Business License are liable to taxes at a rate of 15%.
Provided that the Company holding a Category 1 Global Business License owns at least 5% of an underlying company, credit will be available on foreign tax paid on the income out of which the dividend was paid (“underlying foreign tax credit”).

When a company not resident in Mauritius, which pays a dividend, has itself received a dividend from another company not resident in Mauritius (a “secondary dividend”) of which it owns either directly or indirectly at least 5% of the share capital, such dividend will be allowable as a foreign tax credit and an underlying foreign tax credit will also be available.
Mauritius has no thin capitalisation rules.
Interest and royalty payments paid by Companies holding a Category 1 Global Business License are fully tax deductible in Mauritius.

Tax sparing credits are available – Under this regime the effective rate of taxation in Mauritius can be reduced as a long stop provision exists whereby Companies holding Category 1 Global Business License may elect not to provide written evidence to the Commissioner showing the amount of foreign tax charged and enjoy deemed taxation at 80% of the normal rate of 15%, i.e. 12%. Thus, use of this long stop provision in isolation would reduce the effective rate of taxation in Mauritius from 15% to 3%.

There are no stamp duties, registration duties or other levies.

Residency/Tax Residence Certificate

In order for a GBC1 to benefit from the Double Taxation avoidance treaties, it must be liable to taxation in Mauritius and be in possession of a Tax Residency Certificate. The application for a Tax Residency Certificate takes approximately 3 weeks. To qualify therefore the Company needs to fulfill the “place of management” test as follows:

• The Company has at least two Mauritian Resident Directors
• The Company holds its board meetings in Mauritius, however telephonic participation by non-Mauritian Directors is permitted provided that the meeting is chaired and initiated in Mauritius
• The Company has a local bank account through which investment funds flow
• The Company has a qualified Company Secretary
• Accounting records must be maintained in Mauritius in accordance with the Companies Act 2001 and international accounting standards

Privacy

Confidentiality is strictly observed in terms of the Financial Services Act 2007. No person or body is authorised to disclose information or present documentation to any court, tribunal, committee of enquiry or other authority in Mauritius unless ordered to do so by a Court of Law on application by the Director of Public Prosecutions for enquiry into the trafficking of narcotics and dangerous drugs, arms trafficking or money laundering as defined under existing legislation. On application to the FSC for incorporation total disclosure of beneficial ownership and Company business needs to be made.

Operating from a Mauritius GBC1 Company

A GBC1 may only conduct activities classified as Qualified Global Activities in the Financial Services Act 2007.

• Aircraft Financing and Leasing
• Consultancy Services
• Financial Services
• Information Services
• Insurance/Pension Fund
• Logistics and Marketing
• Shipping and Ship Management
• Assets Management
• Employment Services
• Funds Management
• Communication Technology Services
• Licensing and Franchising
• Operational Headquarters
• Trading
• Investment Advisory
• Investment Holding

For more information about the possibilities of the Mauritian GBC1 Company please contact us.

Summary main characteristics of the Mauritius GBC1 Company

Factor
Description
Income and business tax in Seychelles
None
Conduct business internationally
Yes, non residents company taxfree
Conduct business within Cyprus
Yes, 10% taxes
Official language / language of documents
Greek
Minimum paid-up capital
1000
Optimum amount of authorized capital
No limitation
Government license fee
CYP 100
Bearer shares
Allowed
Minimum number of directors
One
Minimum number of Members (shareholders)
One
Non-resident directors
Allowed
Corporate directors
Allowed
Registered Agent and Address in Cyprus
Required
Register of Directors
To be kept by the Registered Agent, and filed at registrar
Register of Members
To be kept by the Registered Agent
Register of Members filed for public record
No
Disclosure of beneficial owners to Registrar
Yes
Disclosure of beneficial owners to Registered Agent
Yes (confidential due diligence)
Holding of Annual General Meeting
Required
Convention of Meetings of Directors / Members
In Cyprus
Corporate Minutes and Resolutions
To be kept by the Registered Agent
Corporate Seal
Required
Keeping of accounts
Not required
Auditing of accounts
Required
Filing of accounts
Required
Access to double-tax avoidance treaties
Available
Subject to currency controls / restrictions
No
Redomicile a foreign company into Seychelles
Yes
Redomicile a Cyprus company abroad
Yes
Net time to incorporate
1-2 business days
Ready-made (shelf) companies
Available