Mauritius, a tropical island nation located in the Indian Ocean, has emerged as a popular jurisdiction for setting up businesses. Its strategic location, stable political environment, and favourable economic policies have made it an attractive destination for investors as well as rife with opportunity on the domestic market. Whether you are Mauritian or an Expat, the local regulations can be tricky to navigate without in depth understanding of the annual cycle of compliance.
The Importance of a Local Company Secretary in Mauritius
While it’s possible for a foreign company to establish a subsidiary in Mauritius, having a local company secretary is highly recommended. A local company secretary can provide invaluable guidance and support in navigating the Mauritian regulatory landscape, ensuring your company remains compliant and minimizing the risk of penalties or legal issues.
Key Benefits of a Local Company Secretary:
- Regulatory Expertise: A local company secretary possesses in-depth knowledge of Mauritian corporate laws and regulations. They can provide expert advice on compliance matters, ensuring your company adheres to all relevant requirements.
- Regulatory Updates: The regulatory environment can change over time. A local company secretary can keep your company informed of any new regulations or changes that may affect your operations.
- Local Relationships: A local company secretary has established relationships with government agencies and regulatory bodies. These connections can facilitate communication and expedite processes, saving your company time and effort.
- Market Entry Support: When entering a new market, having a local company secretary can be invaluable. They can assist with market research, identify potential business partners, and provide guidance on local customs and practices.
The Role of a Company Secretary in Mauritius
A company secretary plays a crucial role in ensuring compliance with corporate laws and regulations. Their responsibilities include:
- Maintaining statutory records and registers
- Ensuring compliance with corporate governance requirements
- Providing advice on corporate matters
- Acting as a liaison between the company and regulatory authorities
Mauritius offers a compelling proposition for domestic companies seeking a stable, efficient, and tax-friendly environment. With its strategic location, favourable regulations, and skilled workforce, Mauritius has become a popular destination for businesses looking to expand their operations.
Basic Regulatory Requirements:
- Resident Director: Your company must have at least one resident director based in Mauritius. This requirement ensures that there is a local individual responsible for the company’s affairs.
- Registered Address: Your company must have a registered office address in Mauritius. This is the official address where legal documents and notices are served.
- No Restriction on Shareholding: There are no restrictions on the nationality or residence of shareholders of a Mauritian company. Foreign individuals and entities can freely own shares in Mauritian companies.
Benefits of Setting Up a Domestic Company in Mauritius
- Strategic Location: Mauritius’s geographical position offers easy access to markets in Africa, Europe, and Asia.
- Stable Political Environment: The country has a stable political system and a strong legal framework, providing a conducive environment for businesses.
- Favourable Tax Regime: Mauritius offers a competitive tax regime, with a corporate tax rate of 15%. There are also various tax incentives and exemptions available for certain industries such as 0% tax on dividends, capital gains and inheritance.
- Double Taxation Avoidance Agreements: Mauritius has a vast network of double taxation avoidance agreements (DTAs) with various countries, which can significantly reduce the tax burden for businesses operating internationally (look out for our future article on the DTA’s and their benefits across jurisdictions vis-a-vis Mauritius).
- Skilled Workforce: Mauritius boasts a skilled and multilingual workforce, making it an attractive destination for businesses seeking a talented pool of employees. Many global enterprises outsource their staff compliment via Business Process Outsourcing options offered by local companies such as Temple (Corporate Support Services).
- Efficient Regulatory Framework: The Mauritian government has implemented efficient regulatory frameworks to facilitate business operations and offers impressive tax and other incentives for local businesses, startups and SME’s.
Key Regulations for Domestic Companies
- Companies Act 2001: This is the primary legislation governing the formation and operation of companies in Mauritius. It outlines the requirements for incorporation, financial reporting, and corporate governance.
- Financial Services Commission (FSC): The FSC is the primary regulator of the financial services sector in Mauritius. It oversees the activities of banks, insurance companies, and other financial institutions and focuses on Global Business.
- The MRA is responsible for the administration of taxes in Mauritius. It ensures compliance with tax laws and collects tax revenues.
Tax Implications for Domestic Companies
- Corporate Tax: The corporate tax rate in Mauritius is 15%.
- Dividends: Dividends paid to shareholders are not subject to tax.
- Capital Gains Tax: There is no tax on capital gains in Mauritius.
- Value-Added Tax (VAT): VAT is levied on the supply of goods and services within Mauritius at 15%. All entities with an annual turnover exceeding Rs6m are obligated to register for VAT.
- TDS (3-15%): Tax Deduction at Source requires the payer to deduct tax at the time the payment is received or credited to the account of the payee and requires the filing of a TDS return with the MRA (exempt for companies with a turnover less than Rs6m per annum with some special circumstances which may apply)
A local company secretary plays a vital role in ensuring the success of your business in Mauritius. Their expertise, local connections, and regulatory knowledge can help you navigate the Mauritian business environment and new market entry effectively. By complying with the basic regulatory requirements and engaging the services of a local company secretary, you can lay a solid foundation for your company’s operations in Mauritius.
Contact our dedicated team at Temple by email for a free consultation on [email protected] or visit www.temple.mu for more information.
About the authors:
Esmarie Swanepoel
Director and Head of Corporate & Immigration
