Mauritius is situated in the Indian Ocean to the east of Madagascar. Since independence in 1968, Mauritius has developed from an agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. The government has developed strategies emphasizing on foreign investment. Mauritius is an attractive jurisdiction and has more than 15,000 offshore entities aiming to trade in India and South Africa. The official language in Mauritius is English but the population is fluent in both English and French.

There used to be one main source of 'offshore' regime in Mauritius, the Mauritius Offshore Business Activities Authority (MOBAA) constituted under the Mauritius Offshore Business Activities Act 1992 (MOBA Act 1992), which supervised almost all types of offshore entity. However after being listed as a jurisdiction that offer unfair tax competition, the Government passed a range of replacement legislation in 2001 including the Financial Services Development Act 2001, which set up a Financial Services Commission to replace MOBAA. As a result of the introduction of new legislation, Mauritius offers two types of offshore companies most frequently used by international investors: Global Business Company Category 1 (GBC1) and Global Business Company Category 2 (GBC2). Our package for a GBC 1 company is as follows:

MAURITIUS - global business company I           Our Fees £2750           Renewal £2500

In terms of the Financial Services Development Act 2001, a GBC1 is a company engaged in qualified global business and which is carried on from within Mauritius with persons all of whom are resident outside Mauritius and where business is conducted in a currency other than the Mauritian rupee. A GBC1 may be locally incorporated or may be registered as a branch of a foreign company. The business of a GBC1 Company must be conducted in foreign currency other than for day-to-day transactions; and GBC1 companies must not do business in Mauritius, other than to take professional advice, employ local labour, and to rent property. As per the Second Schedule of the FSD Act, a GBL1 can engage in the following Qualified Global Business Activities:

• Aircraft Financing and Leasing
• Asset Management
• Consultancy Services
• Financial Services
• Fund Management
• Information and Communication Technology Services
• Insurance
• Licensing and Franchising
• Logistics and/or Marketing
• Operational Headquarters
• Pension Funds
• Shipping and Ship Management
• Trading

It is the recommended structure for individuals, body corporate, trust or partnership including limited liability partnership or a societe for investment and other high profile business. A GBC1 may be locally incorporated or may be registered as a branch of a foreign company. Public companies, those engaged in banking, insurance and fund management, and companies wishing to benefit from the provisions of Double Taxation Agreements (DTAs), can only be incorporated as GBC 1 companies. A GBC 1 who wishes to access Mauritius' network of double tax treaties must have a Tax Residence Certificate (TRC). In order to prove to be a tax resident the company must demonstrate that effective management and control is in Mauritius. To satisfy this test applicant must:

1. Have at least two resident directors in Mauritius
2. Maintain a bank account with a local bank through which fund s must flow
3. Maintain a Registered office and all statutory records in Mauritius
4. Have a local qualified Company secretary
5. Have a local Auditor
6. Chair and initiate Board meeting in Mauritius

A GBC1 is mainly used by people who have an interest in India because of the following:

Resident: The treaty applies to any person who is resident in one or both states. Resident of a state means a person who is liable to tax under the laws of that state by reason of his domicile, residence, place of management or any other criterion of a similar nature. A person includes an individual, a company, and any non-corporate which is treated as a taxable unit under the taxation laws of the respective

Permanent Establishment : A person resident in a state and carrying on business in the other state will be taxed in the other state only if he has a permanent establishment there. Permanent establishment essentially means substantial presence, eg a place of management, a branch, an office, etc. It also includes a building site or construction or assembly project lasting more than 9 months.

Dividends: Dividends may be taxed in the source country at rates not exceeding: 5% if shareholding is at least 10%; 15% otherwise. However, Mauritius does not levy tax on dividends paid by resident companies.

Interest: Interest may be taxed in the source country at the rate applicable under its domestic law but is tax free under certain conditions, eg if paid to the government of the other state or its agencies or to a bank resident in the other state or if the debt-claim is approved. Under Mauritius tax law, interest paid by a company holding a Global Business Licence Category 1 or a bank holding a Category 2 banking licence to a non-resident not carrying on any business in Mauritius is tax exempt.

Royalties : Royalties may be taxed in the source country at the rate not exceeding 15%. However, under Mauritius tax law royalties paid by a company holding a Global Business Licence category 1 to a non-resident are exempt from tax.

Capital Gains : Gains from the sale of shares are taxable only in the country where the shareholder is resident. While Mauritius does not levy capital gains tax, any gain or profit from the sale of securities or units is specifically exempt from Income tax.

Relief from Double Taxation: Double taxation is avoided by means of a tax credit allowed for tax paid in the other state. The treaty as well as Mauritius tax law provide for credit in respect of underlying tax relating to dividends and tax sparing relief for tax exemption or reduction granted by a state.

Name of the company: Mauritius GBC names must end with Limited, Corporation, Incorporated, Public Limited Company, Society Anonyme, Society Anonyme Responsibility Limited, Sociedad Anonima, Berhad, Proprietary, Naamloze Vennootschap, Besloten Vennootschap, Aktiengesellschaft or the relevant abbreviations to denote limited liability. 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 are not permitted. The following names to be used, require licensing: assurance, bank, building society, Chamber of Commerce, chartered, co-operative, government, imperial, insurance, municipal, royal, state or trust or any name which in the opinion of the Registrar suggests the patronage of the President or the Government of Mauritius.

Memorandum and Articles of Association: After the name approval has been obtained, three copies of the Constitution (Memorandum and Articles of Association) must be submitted, together with a notice of the First Directors, Secretary and location of the Registered Office, and consent forms signed by the Officers. A GBC 1 can undertake banking or insurance business or solicit funds from the public, if the relevant authorities have licensed them. The documentation may be in any language but must be accompanied by a certified English translation.

Shareholders : A GBC 1 requires a minimum of one shareholder and the same rule applies if the company is to be a wholly owned subsidiary. Shareholders may be individual or corporate entity. Shares may be subscribed by nominees but beneficial owners should be disclosed to authorities but not to the public.

Directors of the company : A GBC1 require a minimum of one Director who must be a natural person. Treaty access requires a minimum of two local directors.

Company Secretary : A qualified resident company secretary must be appointed.

The share capital : The usual authorized share capital is US$ 1 million with all of the shares having a par value. The minimum issued share capital is 2 shares of par value.

Registered office and Agent : A GBC must at all times have a registered office in Mauritius. Accounting records and statutory documents including register of members, debenture holders, and officers must be kept there. It is recommended that a Register of Charges and Register of Interests be kept. It is also required to have a registered agent who must be qualified, such as a Lawyer, licensed Management Company.

Taxation : GBCs are tax resident and are liable to taxes at the rate of 15% , but with an automatic tax credit making the effective rate 1.5% (3% as from 2003) and if they are correctly structured and managed may access Mauritius' tax treaty network. Tax sparing credits are available. Under this regime the effective rate of taxation in Mauritius can be reduced. A long-stop provision exists whereby GBL1 companies may elect not to provide written evidence to the Commissioner of Income Tax showing the amount of foreign tax charged and therefore enjoy a deemed taxation at 80% of the normal tax rate of 15%. Thus, the use of this long-stop provision in isolation would reduce the effective rate of tax in Mauritius from 15% to 3%.

Double Taxation Agreements : Mauritius has an extensive network of Double Taxation Agreements (' DTA') which include: Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India, Indonesia, Italy, Kuwait, Luxembourg, Madagascar, Malaysia, Mozambique, Namibia, Nepal, Oman, Pakistan, Rwanda, Senegal, Singapore, Sri Lanka, South Africa, Swaziland, Sweden, Thailand, United Kingdom, Zimbabwe and Uganda. The network provides for interesting tax planning opportunities thereby enhancing the image of the jurisdiction as a tax planning centre.The attractive concessions provided by those treaties include:

1. Elimination of double taxation through tax credit equivalent to Mauritian tax
2. Reduction in withholding taxes on dividends, interest and royalties.
3. Exemption from capital gains.
4. Possible exemption on interest payments on loans

Audit and financial returns : A GBC1 need not make annual returns, but must file audited profit & loss account and balance sheet annually with the Financial Services Commission, within 6 months of the financial year-end. The accounts must be prepared in accordance with internationally accepted accounting standards. Tax returns must also be filed with Income Tax Authorities.

Meetings : Annual meeting must be held every year not later than 15 months after previous meeting and not later than 6 months after balance sheet date. Meetings need not be held in Mauritius.