Offshore company (private, public, limited life, international companies, or partnership)
The Mauritian income tax act is based on English income tax law. The income tax year in Mauritius starts on July and ends in June of the following year. Companies are liable to pay income tax on their income from any sources at a flat rate of 35%. A company that is incorporated in Mauritius or has its controlling interest in Mauritius, is considered for tax purposes to be a resident company. Shareholders of resident companies, whether they are themselves resident or non-resident, are liable to be taxed on dividends received. Dividends distributed by non-resident companies to their shareholders are not taxable unless that shareholder is a Mauritian citizen.
There are other forms of taxation namely sales tax, registration duty, land transfer tax, land development tax, campment site tax, national pension fund, capital gains (morcellement) tax.
Individuals are taxed on income (after deductions) derived as follows: Mauritian Rupees (MUR):-
5% of the first 15 000;
15% on the next 20 000;
25% on the next 20 000;
30% on the remainder.
RESTRICTIONS ON FOREIGN INVESTMENT
Mauritius generally welcomes foreign investment and has recently abolished exchange controls. However, under the Non-Citizen Property Restriction Act, any foreigner must obtain the prime minister's approval before holding or acquiring any immovable property or share in a Mauritian company.
Protection is provided by statute.
MAURITIAN OFFSHORE COMPANIES
The Mauritian Offshore Business Activities Act (MOBAA), which came into force on 13 July 1992 is the body through which applications to set up offshore companies are channelled.
The MOBAA provides that only those statutorily approved business activities may be carried out by companies. These include inter alia, offshore banking, offshore insurance, offshore funds management.
INCENTIVES FOR OFFSHORE COMPANIES
There is no withholding tax on dividends paid from income derived from an offshore activity. A company deriving income from its offshore activities is liable to tax at 0% or may opt to pay tax in Mauritius up to a maximum of 35%. Ex patriate staff on offshore companies are granted a reduction of 50% on the income tax payable on emoluments derived by them from the company. Offshore companies are exempt from paying duties, levies or fees in terms of the Land Act, Licensing Act, Local Government Act, Registration Duty Act, Stamp Duty Act and Transcription and Mortgage Act.
OFFSHORE FOREIGN COMPANY
A foreign company incorporated under the laws of any country other than Mauritius may, where it is authorised by the laws of that country, apply to the Registrar of Companies to be registers being continued in Mauritius under the Companies Act. Various documents need to be lodged in order to register as a foreign company.
DOUBLE TAXATION TREATIES
Mauritius has double taxation agreements with various countries including France, United Kingdom, Malaysia, South Africa, Germany, Zimbabwe, Sweden, India and Swaziland. Double tax treaties have been signed by Mauritius and are awaiting ratification with South Africa, China, Pakistan and Namibia. In order to benefit from the treaties, the ordinary status offshore company must obtain a tax residency certificate. Certain requirements need to be fulfilled before such certificate is granted.
OPEN SHIP REGISTRY
In the wake of the offshore legislation, the Merchant Shipping Act was amended so that shipping could also benefit fully from the advantages offered to offshore businesses. The main feature of the new legislation was the introduction of an open registry, the parallel registration of ships and bare boat chartering, and the regulation of mortgages of ships.
The source of trust law in Mauritius is entirely statutory. When launching the offshore centre, the Mauritian authorities realised it was essential to introduce new legislation for offshore trusts providing the necessary flexibility and confidentiality to the new institution. The Offshore Trust Act of 1992 was passed which governs the creation of offshore trusts.
Legal Disclaimer: This information is not intended for use without professional advice.
For further information please contact:
Werksmans Chambers, 22 Girton Road, Parktown, Johannesburg 2193
P.O. Box 927, Johannesburg 2000 South Africa
Enquiries: Mr Charles Butler
Telephone 27 (011) 488-0000
Telefax 27 (011) 484-3100/3200
E-Mail Address Click Contact Link
Or visit the Werksmans web site, at Click Contact Link
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