Mauritius Limited Partnerships
Why use a limited partnership?
The limited partnership is preferred to a company for the limited liability it provides to its limited partners and the flexibility it offers to the parties concerned when defining the terms and conditions of the partnership agreement.
Limited partnership provides a high level of confidentiality in Mauritius as the partnership agreement and names of the limited partners are not available for public inspection. Limited partnerships are prominent and widely organised in Mauritius as private equity funds, real estate holdings, employee incentive schemes and other asset holdings for foreign individuals, institutions, families and high net-worth individuals.
A limited partnership is made up of one or more general partner (GP) and an unlimited number of limited partners. The GP is responsible for the day to day management of the operation.
Preferential rates under 44 DTAAs
No capital gains tax in Mauritius
80% partial exemption
No Withholding Taxes
Formation
A limited partnership may elect to have a legal separate personality so it can own the assets of the partnership in its own right and be taxed in the same manner as a company holding a global business licence (GBL).
Where a limited partnership does not elect to have a legal separate personality, it will be deemed to be established as a look-through (tax transparent) vehicle and its limited partners will be taxed in their personal capacity on the profits derived from the limited partnership’s operation.
The time frame for the incorporation of a limited partnership is highly dependent on the nature of the activities to be carried out and varies according to its legal personality.
Liability
The general partner (GP) is liable, jointly and severally with any other GP involved in the management of the limited partnership, for all debts and obligations incurred by the limited partnership. For this purpose, GPs are mostly established as corporate entities to enjoy the protection conferred on limited liability entities.
Limited partners wishing to provide services to the limited partnership will not be considered to be involved in the conduct or management of the limited partnership and will thus enjoy limited liability protection if the services offered fall within the activities allowed under the safe harbour clause (section 28(5) of the LPA 2011).