- November 23, 2023
- Posted by: Aurélie
- Category: Investment
Nestled in the Indian Ocean, Mauritius has emerged as an attractive investment hub over the past decades. More and more foreign investors are seeking to benefit from the various benefits it offers, including a business-conducive environment and tax incentives. But before you get started in such a new venture, it’s important to decide on the ideal business structure for your company. Partnerships are a common type of structure for investors in Mauritius; however, they have certain nuances. So let’s dive into this type of business structure to help you decide on the most appropriate one for your business.
What is a Partnership Company, and how does it work?A Partnership Company is a form of business constituted by two or more individuals who agree on sharing the business’s responsibilities, profits, and losses. Mauritius distinguishes different forms of Partnerships, each with its set of characteristics and legal implications.
General partnerships (GP)
In the case of general partners, the latter manage the business and have unlimited liability for the partnership’s debts. This type of structure is more suitable for small businesses and ventures between trusted partners, as responsibilities are shared evenly.
Limited Partnership (LP)
Limited Partnerships comprise limited partners who contribute to the company’s capital but have limited liability, meaning their personal assets are not at risk.
Limited Liability Partnership (LLP)
Limited Liability Partnerships are hybrid structures whereby partners have limited liability. This means that the partners’ assets are free from the business’ debts. This type of structure is suitable for different business models, as partners can define their roles and responsibilities.
It’s worth noting that Partnership Companies in Mauritius are not separate legal entities from their owners. Overall, partners’ are equally responsible for the partnership’s obligations and debts.
This type of business structure is open to foreign investors looking to start a business in Mauritius. However, it is recommended that you are aware of any regulations and restrictions in force regarding this type of venture in the country.
Blue Azurite is here to guide you, from choosing the appropriate form of partnership to securing all the relevant documentation and managing your business.
What are the benefits of setting up a Partnership Company in Mauritius?
The best thing about Partnership Companies in Mauritius is that they are not subject to corporate income tax. In fact, partners benefit from the company’s profits, and they are subject to personal income tax instead. Besides, as mentioned above, the country boasts a favorable tax system and provides various incentives for foreign investors who can also benefit from Double Taxation Agreements (DTA) signed with their countries of residence. While Partnership Companies in Mauritius have to be registered with the Corporate and Business Registration Department, the process is quite straightforward, provided you submit the required documentation, such as partnership agreements and identification documents, and pay the fees applied.Another benefit of setting up a Partnership Company in Mauritius is that investors are allowed to customize their partnership agreements according to their business needs. Partners are also free to decide on the distribution of the company’s profits and losses, which ensures control over the business’ financial outcomes.
Factors to consider before creating a Partnership Company in Mauritius
Now that you have understood the implications of each form of Partnership Company, here are some tips to help you choose the ideal structure for your business:Ensure you properly understand each partner’s financial commitments, as LPs and GPs may have different requirements in terms of capital contribution. For instance, GPs often involve equal sharing of financial obligations and responsibilities among partners, while LPs provide for greater flexibility.In the case of GPs, decision-making is shared, which means that all partners have an equal say in the business operations. On the other hand, LPs are more flexible in decision-making. While limited partners may be less active in the company’s day-to-day operations, general partners are granted more control. Therefore, make sure to assess your preferences in terms of involvement and control when deciding on the ideal partnership structure.The choice of a partnership structure is crucial when it comes to the level of liability and risk tolerance. In the case of LPs, specific partners are liable for the company’s debts and responsibilities. This means their personal assets are risk-free. It might be the most suitable option if you want to remain protected against unforeseen circumstances.Mauritius boasts a favorable tax regime, it’s important for foreign investors to fully understand their tax responsibilities. In fact, LPs, GPs and LLPs each have distinct tax implications that you need to be aware of to ensure regulatory compliance.
The importance of seeking help
While starting a Partnership Company in Mauritius is a new venture full of prospects, it’s important that you gather all the necessary information and surround yourself with experts. Contact us now to get started!