Located in the Indian Ocean, Mauritius is a popular destination among foreigners looking to relocate and do business. Mauritius is an attractive investment destination because of its stable political environment and its location between Africa and Asia. Mauritius also has a high standard of living and is well regarded internationally for its secure living environment. In this article, we depict how using Mauritius can help you maximize the value of your business.
The Reasons for Setting Up in Mauritius
Mauritius is the ideal location for entrepreneurs and businesses from all over the world. The island nation’s conducive business environment and world-class infrastructure make it the perfect place to do business. The jurisdiction offers:
- 100% foreign ownership;
- No minimum capital is necessary to set up a company in Mauritius;
- A country that is friendly to businesses and investment, ranking first in Africa on the World Bank’s Doing Business index;
- Political stability, economic prosperity, and social cohesion;
- Fluent bilingual population (English and French);
- Skilled and qualified workforce ;
- Affordable company registration and office costs;
- Good governance (1st on the Ibrahim Index of African Governance);
- Presence of reputed local and international service providers including banks, brokers, Investment Managers, pension funds, insurers, rating agencies, lawyers, and advisory firms;
- Located between Africa and Asia;
- Strategic time zone (GMT+4) for international transactions.
An efficient corporate structuring solution in Mauritius can help you optimize and maximize the value of your company while doing business globally. The type of activities your company carries out will determine its corporate structure. The corporate structures in Mauritius include:
- Global Business Company (‘GBC’)
- Authorized Company (‘AC’)
- Global Headquarters Administration
- Protected Cell Company
- Trust (Discretionary/Purpose/Charitable/Spendthrift)
- Private Trust Company
- Investment Funds (Open-ended funds/Mutual Funds and Closed-Ended Funds)
- Trading Company
- Freeport Company
In Mauritius, experienced local business and advisory service providers, such as Sunibel Corporate Services, can help you in the setting up of the appropriate corporate structure and accompany you in its administration and optimization.
A Trading Platform Ideally Located to Connect Africa and Asia
With their presence and operations in Mauritius, entrepreneurs and corporates have access to the country’s network of Double Taxation Agreements (DTA) and Investment Promotion and Protection Agreements (IPPA), subject however to certain substance requirements being met. Indeed, Mauritius has signed DTA and IPPA with over 40 countries. Furthermore, Mauritius is a safe investment platform in Africa, with 50% of new businesses established in Mauritius being involved in investments in Africa.
In addition, Mauritius has Free Trade Agreements with African (through the African Continental Free Trade Area – AfCFTA) as well as Asian (China, India, and Pakistan) countries, making the island a major trade and investment platform between both continents.
By doing business in Mauritius, entrepreneurs and multinationals from all over the world can have access to these Free Trade Agreements. They give them access to a market of over 2 billion people, whose Gross Domestic Product exceeds USD 30 trillion (Power Purchase Parity). Those Free Trade Agreements would be useful to Trading and Freeport companies and enable them to target a larger pool of potential customers.
Furthermore, Mauritius is a member of The Common Market for Eastern and Southern Africa (21 members) and the Southern African Development Community (16 members), allowing operators to set up on the island, and import and export goods to and from Mauritius, to be exempt of customs duties.
A Competitive Fiscal Environment
A transparent jurisdiction of repute, economic and political stability, and the island attracts thousands of foreigners – including High-Net-Worth-Individuals, professionals, investors, and retirees – each year. About 20,000 companies are currently using Mauritius to optimize their company structure and enhance their Enterprise Value and Shareholder Value.
When it comes to taxation, Mauritius adopts a territoriality principle, meaning that both businesses and individuals pay taxes principally on their Mauritius-sourced income. The Mauritian tax system has the following characteristics:
- No Capital Gains tax;
- Individual Income Tax, Corporate Income Tax, as well as Value Added Tax, harmonized at 15%;
- No double taxation in a number of countries thanks to a large network of Double Taxation Avoidance Agreements;
- Dividends, capital, and profits can be freely repatriated;
- Dividends are tax-exempt;
- Inheritance is tax-exempt;
- 80% tax exemption on certain types of foreign income incurred by corporates, subject to meeting specific requirements, bringing the effective corporate tax rate to 3%;
A Globally Recognized International Financial Centre
In its World Investment Report, 2020, the United Nations Conference on Trade and Development (UNCTAD) acknowledged the credibility of the Mauritius International Financial Centre, describing the country as an important player in driving investments of quality towards African and Asian countries, as well as improving investment flows in the region.
Mauritius has strong policies and measures in place to comply with the highest international standards in terms of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT). Mauritius is compliant with the Financial Action Task Force’s (FATF) recommendations and is one of the signatories of the OECD’s Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports.
These initiatives reflect the determination of the Mauritian government to establish and reinforce the position of the country as a transparent International Financial Centre that attracts capital flows and ensures the security of assets. These features are proof that Mauritius is a great place for businesses and investors to operate.
A Popular Destination to Relocate
Mauritius is a popular destination for international investors and expatriates, with many looking to relocate, live, work and invest on the island. There are over 20,000 expatriates in Mauritius, originally from South Africa, France, the United Kingdom, Germany, Switzerland, and many other countries.
The following reasons explain the strong demand for relocating to Mauritius from High-Net-Worth Individuals, professionals and their families, and retired non-citizens:
- Favorable and safe living environment;
- Lifestyle and culture;
- Position among the top-rated countries in Africa;
- Strong and diversified economy;
- Simple and attractive tax regime;
- Effective programs to attract international investors and professionals;
- Residence-by-investment program; and
- Wide choice of Anglophone and Francophone private (primary, secondary, and tertiary) institutions for children, amongst others.
Mauritius is also an attractive jurisdiction for real estate investment. With an investment of, at least, USD 375,000 in dedicated real estate projects, the buyer receives the residence permit. Assets, such as real estate, are one of the most popular methods of securing and growing wealth while planning for one’s succession.