In the 2018/2019 Budget, the Prime Minister and Minister of Finance announced several reforms to support and strengthen the Global Business Sector in Mauritius and to ensure that developments in the country are in accordance to international standards.
One of the decisions announced is that the FSC will stop issuing Category 2 Global Business licences (GBC2). This was implemented in January 2019. To replace this, the Financial Services Act was amended to introduce a new section 71A. It is titled ‘Authorised Companies’. This is a new type of company whose business activities and places of Management are outside of Mauritius. This implies that the company’s (other than a bank) majority of shares, voting rights or its the legal or beneficial interests are shared or controlled by someone who is not a citizen of Mauritius. This type of company, henceforth known as an Authorised one, is considered as a foreign company for tax purposes. Such a company will therefore not be subject to tax on foreign derived income. However, it does not have access to the Double Tax Avoidance Agreements networks of Mauritius.
If foreign investors wish to set up an Authorised company in Mauritius, they should apply for an authorisation from the FSC via a Management company. The latter is commissioned to act as a permanently-registered agent that is responsible for the administration of the company. What is its duty towards the non-Mauritian investor? The Management company is responsible for
- filing of any return or document required under relevant Acts in Mauritius,
- receiving and forwarding of any communication from and to the Financial Services Commission, the Mauritius Revenue Authority or the Registrar,
- undertaking measures on combating money laundering and the financing of terrorism and related offences as required by guidelines issued by the Commission,
- keeping of records, including board minutes and resolutions, transaction records and other such documents that the FSC may require,
- and dealing with other services that the FSC might need.
Additionally, besides from having a registered agent to deal with the above-mentioned operations, the holder of an Authorised Company License must file a financial summary with the Commission once every year. It should also file the Company Tax Return with the Mauritius Revenue Authority every year (Authorised companies are tax-exempt in Mauritius but annual return has to be filed with the Tax Authority).
What are the activities carried out by an Authorised Company?
The FSC has already delivered more than 859 Authorised Company Licences. What are these firms appropriate for? If you implement an Authorised Company in Mauritius, you will be able to carry out operations such as
- investment holding,
- property holding,
- international trade,
- management and consultancy,
- IT services,
- shipping and ship management or
- One-off transaction using a Special Purpose Vehicle.
Nonetheless, the Financial Services Act state that Authorised Companies cannot perform financial services like banking; they cannot hold, manage or deal with a Collective Scheme (or Fund) as a professional administrator; they cannot provide registered office facilities, nominee, directorship or secretarial services and they are not allowed to provide trusteeship solutions. Moreover, they cannot conduct operations that may harm Mauritius’ reputation as an International Financial Centre and that are in contradiction to public interest.
Should you be interested in knowing more about Authorised Companies, feel free to contact us.