Mauritius as a Global Offshore Financial Center
Renowned for its favorable tax laws, an open economy, and modern banking system, Mauritius has become an enticing tax haven for offshore investing. This tropical paradise in the Indian Ocean has maintained a stable democracy grounded in French and English law since gaining independence in 1968.
Mauritius boasts a robust, open, and fiscally reliable economy in the sub-Saharan African region. It’s an active participant in numerous international organizations, including the International Monetary Fund, World Bank, and the World Trade Organization, with strong economic ties to the African continent, European Union, India, and China.
Mauritius’ flourishing offshore financial sector offers a wide range of offshore formation structures, accounts, and licenses. The Mauritius Financial Services Commission oversees company formation and regulation, making it a lucrative hub for offshore investors and businesses seeking an offshore business center.
Why Choose Mauritius as a Tax Haven?
Tax Advantages
With one of the world’s lowest tax structures, Mauritius’ corporate and individual income taxes are fixed at a mere 15%. However, offshore businesses operating in Mauritius, which neither conduct business with Mauritian nationals nor use Mauritian currency, are exempt from these taxes.
Asset Protection and Investment Agreements
The country provides asset protection, having secured a position on the OECD ‘white list’ of countries suitable for offshore investments. This status comes from numerous government and financial sector reforms initiated in recent years.
Mauritius has active Investment and Protection Agreements with 18 countries, while 16 more agreements await ratification.
Global Business Opportunities
Mauritius is proactive in positioning itself as a wealth management center for sub-Saharan Africa and the Indian Ocean region. It stands tall among other offshore jurisdictions like Liechtenstein, Jersey, and Panama. The nation also enjoys preferential access to both developed and emerging markets, including the EU and USA.
Residency and Property Ownership
Foreign nationals residing in Mauritius for at least three years and drawing a salary above a certain minimum can obtain permanent residency, enabling them to purchase property on the island.
Mauritius: A Glimpse at Its Geographical and Political Structure
The Republic of Mauritius, comprising a group of islands in the Indian Ocean, is located 2,000 miles east of Africa’s southeast coastline and to the east of Madagascar. The majority of Mauritius’s inhabitants reside on the largest island, Mauritius, with its capital and largest city being Port Louis.
A former British colony, Mauritius gained independence in 1968. However, French influence remains strong due to its colonization by France in 1715. It adopted the Westminster model of government, becoming a republic within the British Commonwealth in 1992.
Economy and Infrastructure
With an estimated GDP of US$19.98 billion for 2012 and a growth rate of 3.3%, Mauritius has one of Africa’s highest per capita GDPs. Once heavily dependent on the sugar industry, Mauritius now boasts a diverse economy led by agriculture, food processing, textiles, mining, metal products, tourism, and financial intermediation.
Another thriving sector is information technology, with significant investments in software development, business process outsourcing, and call centers. Mauritius aims to transform into a leading information technology free-trade zone and a ‘cyber island’.
Mauritius also possesses one of Africa’s most sophisticated banking systems, inherited from the colonial era and refined by subsequent legislative reforms. International banks like Barclay, Deutsche Bank, HSBC Bank, and South Africa’s Standard Bank have branches in Mauritius.
Exchange Control and Legal Framework
Although Mauritius has abolished exchange controls, the government requires proof of the monetary origin for repatriation and profits from foreign investment.
Mauritius’ legal system is based on French civil and English common law, with offshore business laws under the jurisdiction of the Mauritius Financial Services Commission (FSC). The FSC ensures the investment safeguards align with best international practices, providing protection to offshore investors.
Corporate Legislation and Tax Codes
The Companies Act, No. 57 of 1984 and the International Companies Act 1994 established the rules under which Offshore and International Companies can operate in Mauritius, respectively.
Mauritius has a corporate tax rate of 15%. However, for Global Business Companies (GBC), the tax rate could be as low as 3% after tax rebate.
Conclusion
With its political stability, robust economy, and attractive tax incentives, Mauritius continues to be an appealing destination for offshore investing and business operations. However, like any investment decision, it’s important to seek professional advice and understand the complexities involved before diving in.
