Global Business Company - GBC
A Global Business Corporation, commonly referred to as a GBC, as defined in the Mauritian Financial Services Act 2007, is a company conducting a qualifying global business conducted from Mauritius and having all its residents conducted in a currency other than Mauritius, doing business outside Mauritius.
A GBC is a tax resident company in Mauritius and benefits from various double taxation treaties that Mauritius has with multiple countries. To benefit from the tax treaty, the company must establish Mauritius tax residence and prove that the company’s central administration is located in Mauritius.
A GBC is generally prohibited from doing business with residents unless it has specific authorization from the Financial Services Commission (“FSC”).
The following global business activities can be carried out by a GBC:
○ Aircraft Financing and Leasing
○ Assets Management
○ Consultancy Services
○ Employment Services
○ Information and Communication Technologies
○ Insurance
○ Licensing and Franchising
○ Logistics and/or Marketing
○ Operational Headquarters
○ Pension Funds
○ Shipping and Shipping Management
○ Trading
○ Financial Services
○ Any other activity as may be approved by the Commission
CAPITAL, SHARES & SHAREHOLDERS
Capital
There is no minimum stated capital but we advise to keep a minimum of USD 1000.
> Capital can be denominated in any currency except Mauritian Rupee.
> GBC are subject to no restrictions as to the distribution of their assets. They may purchase their own shares or hold them as treasury shares upon satisfying certain conditions.
Shares & Shareholders
Registered shares, ordinary or preference shares, redeemable shares and shares with or without voting rights.
> Par value shares if any may be stated in more than one currency.
> Minimum of 1 shareholder and same rule applies if the company is a wholly owned subsidiary.> Shareholders may be an individual or a corporate entity.
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.
TAXATION ASPECTS
Taxation
GBC companies are resident in Mauritius for tax purposes.
> There are no capital gains tax, and no withholding tax on payment of dividends.
> No stamp duties or capital taxes.
> No inheritance tax.
> A GBC company is liable to corporate tax at the rate of 15% on its profits but has access to a partial exemption regime of 80% (therefore a maximum net effective rate of 3% only) subject to meeting conditions of substance or actual tax suffered upon receipt of the income which can actually reduce the tax liability to NIL if higher than the Mauritius tax liability.
Tax Situation
> Provided that the GBC owns at least 5% of an underlying company, credit will be available on foreign tax paid on the income out of which the dividend was paid (‘underlying foreign tax credit’).
> Mauritius has no thin capitalization rules.
> Interest and royalty payments paid by GBL companies are tax exempt.
> Tax sparing credits are available. Under this regime the effective rate of taxation in Mauritius can be reduced. A long-stop provision exists whereby GBL 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%.
TAX RESIDENCY & DOUBLE TAXATION AGREEMENTS
Tax Residency
Currently, the Financial Services Commission and the Mauritius Revenue Authority, consider the following when determining whether the conduct of business is managed and controlled from Mauritius:
The corporation shall have or has at least 2 directors, resident in Mauritius, who are appropriately qualified and are of sufficient calibre to exercise independence of mind and judgment.
> The corporation shall maintain or is maintaining at all times its principal bank account in Mauritius
> The corporation shall keep and maintain or is keeping and maintaining, at all times, its accounting records at its registered office in Mauritius
> The corporation shall prepare, or proposes to prepare or prepares its statutory financial statements and causes or proposes to have such financial statements to be audited in Mauritius.
> The corporation shall provide or provides for meetings of directors to include at least 2 directors from Mauritius
> A corporation which is authorized / licensed as a collective investment scheme, closed end fund or external pension scheme, is administered from Mauritius.
New Requirements as from 1st January 2015
The FSC issued new substance guidelines for global business companies and these are to be effective as from 1 January 2015. Going forward, in addition to the existing conditions, a GBC would need to fulfill at least one of the following criteria:
The corporation has or shall have office premises in Mauritius
> The corporation employs or shall employ on a full time basis at administrative/technical level, at least one person who shall be resident in Mauritius
> The corporation’s constitution contains a clause whereby all disputes arising out of the constitution shall be resolved by way of arbitration in Mauritius.
> The corporation holds or is expected to hold within the next 12 months, assets (excluding cash held in bank account or shares/interests in another corporation holding a Global Business Licence) which are worth at least USD 100,000 in Mauritius.
> The corporation’s shares are listed on a securities exchange licensed by the Commission.
It has or is expected to have a yearly expenditure in Mauritius which can be reasonably expected from any similar corporation which is controlled and managed from Mauritius.