Mauritius Special Licence Companies for South Africans
Mauritius is a preferred cross-border investment hub in the African region, positioning itself as a favourable jurisdiction for facilitating foreign direct investment. It offers a range of benefits and opportunities to South African taxpayers looking to protect their assets and optimise their tax planning.
While Mauritius is not a tax haven, it offers a competitive tax environment and a number of other fiscal incentives that make it highly attractive to international investors. Companies in Mauritius are generally subject to a flat corporate rate of 15%. However, there are several exemptions and special licences that serve to reduce this rate significantly depending on business activity.
Some companies qualify for an 80% tax exemption in relation to certain specified foreign-source income, which includes foreign dividends not allowed as deduction in source country and interest income. The tax exemption on interest earned by Collective Investment Schemes (CIS) or Closed End Funds is 95%.
Businesses can also benefit from 100% foreign ownership, no minimum foreign capital requirement, no tax on dividends or capital gains, free repatriation of profits, dividends and capital, accelerated depreciation on acquisition of plant, machinery and equipment, exemption from customs duty on imported equipment, and access to an extensive network of Double Taxation Avoidance Agreements (DTAs) that covers around 17 African nations, including South Africa.
Through our office in Mauritius, Sovereign can assist with the formation and administration of Special Licence Companies, which are tailored for international trade and investment. Licensed and regulated by the Mauritius Financial Services Commission (FSC), these companies offer flexibility, tax efficiency and access to double tax treaties, making them ideal for global operations.
What is a Special Licence Company in Mauritius?
Mauritius introduced the Global Business Licence (GBL) for foreign-controlled companies wishing to conduct business principally outside Mauritius in 2019. The island now offers over 60 special licences, catering to diverse industries such as investment, AI-powered services, e-commerce, shipping, warehousing, trade promotion, tourism and property development.
These licences typically offer tax benefits, further enhancing the attractiveness of Mauritius as a business hub. Tax holidays of five to eight-years in length are currently available to the following licensees: Global Headquarters Administration, Global Treasury Activities, Overseas Family Office (single), Overseas Family Office (multiple), Investment Banking, Global Legal advisory Services and Captive Insurance.
Companies licensed under the GBL, generally known as Global Business Companies (GBCs), are liable to tax at the rate of 15% but will qualify for an 80% partial tax exemption in relation to certain specified foreign-source income, to provide a maximum effective tax rate of 3%. Qualifying foreign-source income includes:
The 80% exemption is available to Mauritius GBCs that satisfy the substance requirements to qualify as tax resident in Mauritius. To qualify, a GBC must:
- Carry out its Core Income Generating Activities (CIGA) in or from Mauritius.
- Employ directly or indirectly, an adequate number of suitably qualified persons to conduct its CIGA.
- Incur a minimum expenditure proportionate to its level of activities.
It is also mandatory for a GBC to be ‘managed and controlled’ from Mauritius and administered by a licensed management company, such as Sovereign Mauritius, that holds a Management Company licence from the FSC.
A GBL that is tax resident in Mauritius can apply for a Tax Residence Certificate (TRC) from the Director General of the Mauritius Revenue Authority (MRA) should this be required by the tax authorities in the jurisdiction in which the company is conducting its business.
Entities holding a GBL wishing to benefit from treaty relief under a DTA must obtain a TRC from the MRA, which is generally issued within a period of seven days from the date of application, provided that the person has submitted the return required under the Income Tax Act (ITA) 1995.
A robust regulatory framework
Mauritius has established a robust regulatory and supervisory regime for the financial services sector that is compliant with international standards. The Bank of Mauritius is responsible for the banking sector and the Financial Services Commission Mauritius is responsible for non-banking financial services.
It is founded on a well-developed, enabling legal framework, and a range of laws covering banking, insurance, pensions, securities, trusts and anti-money laundering. The Companies Act governs incorporation of businesses.
The Mauritius legal system draws from both French civil law and British common law traditions. This combination provides a flexible but reliable framework in which businesses can operate. The highest court of appeal is the judicial committee of the Privy Council of England & Wales.
All businesses must register with the Corporate & Business Registration Department (CBRD). On completion of the registration process, the CBRD issues an electronic business registration card bearing a unique registration number and an e-certificate of incorporation.
Strong institutional and government support
The government of Mauritius is highly supportive of business development, with institutions like the Economic Development Board (EDB) playing a crucial role in facilitating business operations. The EDB provides valuable support and guidance to businesses, ensuring they can navigate the regulatory landscape effectively. This proactive approach by the government creates a business-friendly environment that encourages investment and innovation.
Mauritius is a member of the Common Market for Southern and Eastern Africa (COMESA) and the Southern African Development Community (SADC) free trade areas. The government has signed Double Taxation Agreements (DTAs) with 46 countries and is party to a series of treaties under negotiation.
Mauritius has also signed Investment Promotion and Protection Agreements (IPPA) with 46 countries. As well as attracting foreign direct investment from traditional markets like the UK, France and US, it signed a free trade agreement with China and a preferential trade agreement with India, both in 2021.
Mauritius is a thriving business hub that facilitates global expansion, particularly into Africa. Its blend of strategic advantages, strong economic foundations, competitive tax regime and supportive infrastructure makes Mauritius the ideal choice for businesses seeking growth and efficiency. Whether you’re a start-up or an established South African enterprise, Mauritius offers the tools, resources and environment to help your business flourish internationally.
Setting up a Global Business Company (GBC)
For South African clients wishing to set up a GBC in Mauritius, a GBC requires a minimum of one shareholder, who can be non-resident in Mauritius, and two local directors who are resident in Mauritius and must exercise independence and actively participate in decision-making to ensure the company is managed and controlled from Mauritius.
Sovereign Mauritius can be appointed to fulfil the requirement for two resident directors for a Mauritius GBC. We can also provide the physical registered address in Mauritius and the necessary company secretarial services.
Additionally, GBCs must:
- Maintain their principal bank account in Mauritius.
- Hold board meetings in Mauritius.
- Keep accounting records at its registered office in Mauritius.
- Prepare statutory financial statements that are audited in Mauritius.
- Meet with the minimum substance requirements in Mauritius.
An applicant for a Global Business Licence is required to submit the appropriate application to the FSC, channeled through a company, such as Sovereign Mauritius, that holds a Management Company (MC) licence from the FSC.
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
