Mauritius 2017-18 Budget Speech - Impact on GBC1s and other matters affecting international business
In his presentation of the 2017-18 Budget on 8 June 2017, the Mauritius Prime Minister reaffirmed his Government's recognition of opportunities that exist for his country with trade and cross-border investments in Africa.
The objective is to develop bilateral cooperation between Mauritius and a number of African countries, and facilitate the implementation of joint business and investment projects.
Equally of interest to the Financial Services sector, he referred to the opportunities born out the "new global economic order" spearheaded amongst others by the OECD and the EU.
Measures will be taken to reinforce Mauritius’s stance as a jurisdiction of substance. In this respect, it is proposed that GBC1 companies will in future need to satisfy at least two additional criteria of substance as set by the FSC, instead of one in the past. Rosemont considers that it is important that real substance is maintained for businesses operating an international environment nowadays, and is able to assist you to ensure that your business meets such obligations.
For information, the FSC's basic criteria of substance to establish management and control of the GBC1 in Mauritius are the following:
1. To have at least two appropriately qualified and experienced resident directors in Mauritius, who will also attend directors' meetings in Mauritius;
2. To maintain its principal bank account in Mauritius;
3. To maintain its accounting records in Mauritius;
4. To have its financial statements audited in Mauritius
The FSC has the following additional criteria, two of which will be required in future if these changes are enacted:
1. To have office premises in Mauritius;
2. To employ full time at least one Mauritius resident person;
3. To have in the company's constitution documents, a clause that states that disputes will be resolved by way of arbitration in Mauritius;
4. To hold at least USD 100,000 worth of its own assets in Mauritius;
5. To have its shares listed on a securities exchange licensed by the FSC;
6. To have a level of annual expenditure in Mauritius, that is considered reasonable for a company which is managed and controlled from Mauritius.
Furthermore, Global Business Companies (GBCs) will be reviewed in the light of the expected changes with international tax requirements over the next 10 years, taking care not to undermine Mauritius competitiveness.
Interesting tax incentives and other measures to benefit domestic companies are also proposed such as:
♦ A reduction in taxation to 3%, instead of 15%, on profits which derive from export of goods which are manufactured locally;
♦ The introduction of an 8 year tax holiday for new companies involved in the manufacturing of pharmaceutical, medical and high tech products, and income derived from intellectual property assets developed in Mauritius.
The establishment of an Economic Development Board was also announced, to be responsible for:
♦ The national and sectoral economic development planning;
♦ The investment and export promotion;
♦ The e-licensing business.
A further announcement is that the Mauritius Stock Exchange will work with Euroclear, at reviewing the local debt market and creating an international capital market, to attract to Mauritius African sovereign and corporate multi-currency bond issues.
Rosemont Management (Mauritius) Ltd is a licenced Mauritius Management company geared to provide a full range of Mauritius company and Mauritius Foundation formation, corporate structuring and administrative services to clients located principally in Africa, but also in the Middle East, Europe and Asia if and when appropriate.