Setting up a commercial company in Mauritius

Companies Act 2001 handles all the legal aspects of companies, including creation, management and control, dissolution, and statutory obligations. Companies enjoy the status of separate legal entity, distinct and separate from its directors and shareholders. The local legislation provides for different form of companies, which can be enumerated as follows:

• Domestic companies (one or more person as director and shareholder)
• Limited-life companies
• Public companies
• Global Business Licensed companies – Category 1 (offshore business)
• Global Business Licensed companies – Category 2 (offshore business)
• Protected Cell companies
• Branch of foreign companies

Besides the Companies Act 2001, which handles the legal status of the companies themselves, there exist a wide set of rules and Laws that regulate business activities in themselves. Investors willing to set up business in the country need to understand both the provisions of the Companies Act 2001, and those of the governing laws applicable to their businesses. For example, the banking and insurance, information and communications, tourism activities.

The Registrar of Companies is the local body having a supreme authority on the Companies Act 2001, ensuring that the disposition of this Law is at all times observed by registered companies in Mauritius. With the centralized business points, the Registrar of Companies also handles the role of Registrar of Businesses, and thus its powers of authority are extended to reach all business forms in the country.

All business registrations are done at the Registrar of Businesses which maintains an information record link with other major authorities, for example: the Mauritius Revenue Authority and the National Pensions Fund.

Highlights of the Companies Act 2001

Any company shall have at least one director ordinarily resident in Mauritius. With such a provision, local authorities ascertain that at least one director is reachable and stand answerable for the company at all times. The nomination of a corporate secretary is not mandatory for companies with an annual turnover of less Rs 30 million, classified as Small Private. Beyond this turnover level, companies are required to nominate company secretaries and auditors, holding valid professional qualifications, acceptable to Mauritian authorities.

Every company should hold an Annual meeting of its shareholders, dealing ordinarily dealing with the following agenda:

• Approval of financial statements
• Election or re-election of the members of the board of directors
• Appointment of the auditors for the next financial year

Companies registered in Mauritius are required to file an annual return within 28 days following the annual meeting of shareholders to disclose the following:

• List of its current directors
• List of its current shareholders
• The amount of issued capital and number of shares
• Any transfer of shares effected since last annual meeting of shareholder
• The financial statements of the company

Types of companies

The Mauritian legislation and regulation have been designed in a way to promote investment and entrepreneurial skills. Creating a company is a rapid exercise limited to only the strict minimum of essential procedures. However, sensible activities like banking and insurance activities do include additional procedures, such as permissions and approval of the Ministry of Finance and the Financial Services Commission.

The following are types of companies and their respective features:

Basic requirements at incorporation

Any director, shareholder or agent authorised in writing may apply for the incorporation of a company. The following are basic requirements that any company needs to have prior to its incorporation:

• Name
• One or more shares
• One or more director(s)
• One or more shareholder(s)
• A registered office

The constitution is optional in Mauritius but compulsory in certain cases, for example in banking or insurance businesses.

Incorporation process

1. The first logical step in this field remains the identification of a preferred name, and confirmation of the availability of this particular name by the Registrar of Companies.

Forms to fill and sign
2. Form 1 - Application for incorporation form

3. Form 7 - Consents of every director

4. Form 9 – Consent of every shareholder

5. Form 8 – Consent of secretary (not compulsory)

6. Disclosure of the following information:

• The address of registered office of the company
• Type of company
• Class and number of shares and consideration paid by every shareholder for issue of shares
• Constitution (optional)
• Copy of utility bills of shareholders and directors as proofs of their addresses
• Nature of business and location
• Date of proposed commencement of activity
• Workforce
• Contact numbers.

Certificate of incorporation
The certificate of incorporation certifies the existence of a company as a separate legal entity and clearly specifies the date of creation. The Registrar of Companies issues this document within 24 hours following the successful completion of the incorporation process described above. The company is at the same time assigned a file number, as an additional identification apparatus for the authorities.

A business registration card is also issued with a unique business registration number, which allow a common identification with other relevant authorities such as tax and social security.

Global business license - Category 1 (GBL 1)
Companies operating under this category may select three types corporate vehicle, i.e.: public company, private company or foreign company. Typical business activities allowed and carried out under this category of license:

• Aircraft financing and leasing
• Asset management
• Consultancy services
• Employment services
• Financial services
• Funds management
• Information and communication technology services
• Insurance
• Licensing and franchising
• Logistics and / or marketing
• Operational headquarters
• Pension funds
• Shipping and ship management
• Trading
• Any activity qualified and approved by the FSC

GBL 1 companies enjoy full advantage of the double-taxation treaties signed by Mauritius and have access to further optimize their legal structures through implementation of protected cell, investment fund, captive insurance and private trust configurations. The tax rate applicable to GBL 1 is 15% while they are subject to zero-rate VAT, free repatriation of profits, exemption from capital gains tax, and no estate, inheritance wealth tax or gift tax.

The Protected Cell Company (PCC) is a very useful structure which enables a company to create cells within its capital and segregate its assets within that cell protecting itself against claims relating to other assets. PCC is very common in insurance business whether reinsurance or captive, and collective investment schemes.

Investment funds companies deal mainly in securities on the worldwide market and is often used for private fund management or investment purposes. It helps investors spread their risks while expecting a maximization of their returns. Investment funds are normally taxed at 15% but the rate may be lowered to an effective 3% through benefits of foreign tax credit regulations. This type of company requires the approval of the Commissioner of Income Tax to benefit from the double-taxation treaty agreements of Mauritius. Such companies are very popular in the country where there are no withholding tax on dividends, no capital gains tax and interest ; there are presently more than 200 investment funds registered locally with a n aggregate sum of more than US$12 billion.

Companies may create a Captive Insurance Company to insure and re-insure themselves. The name of the Captive Management Company and of its Representative have to be submitted to the FSC. Besides following the normal incorporation procedures like a GBL 1, captive insurances have to present a 3-year business plan highlighting the premium volume, reinsurance arrangements, profit margins, claim ration and projected cash flow. Actuarial reports should clearly show that the financing of the captive can easily cover both the technical reserves and the required margin of solvency. The FSC may request further document and comfort according to its appreciation of the project submitted.

Global business license - Category 2 (GBL 2)
The GBL 2 license offers greater flexibility and is appropriate for holding and managing assets, trading, invoicing and international contracts management. Unlike GBL 1 companies, GBL 2 are not allowed to maintain any bank account in Mauritian currencies. Holders of this license do not benefit from the double-taxation treaties and are neither taxed in Mauritius.

Typical activities of a GBL 2 would include non-financial consultancy, IT services, logistics, marketing, shipping, ship management, trading non-financial passive investment. Other activities may be carried out subject to approval of the FSC.

The table below provide a comparison of the main features differentiating GBL 1 with GBL 2 license holders.

GBC 1 / GBC 2 COMPARISON

FSC: Financial Services Commission
ROC: Registrar of Companies

More information in the Ebizguide Mauritius.