A Global Business Company (“GBC”) is a company incorporated under the Companies Act 2001 (as amended) of Mauritius and licensed by the Financial Services Commission (the “FSC”) of Mauritius under the Financial Services Act 2007 (as amended) of Mauritius (the “FSA”). GBCs are tax-resident entities in Mauritius, enabling their access to tax treaty benefits with countries that have a tax treaty with Mauritius.

Business Activities

GBCs are primarily established to conduct business activities predominantly outside Mauritius. According to the FSA, GBCs are authorised to engage in various legal business activities, including but not limited to:

  • investment holdings;
  • collective investment schemes;
  • leasing activities;
  • investment advisory services;
  • international trading;
  • consultancy services; and
  • other financial services activities.

Taxation of GBCs

GBCs are liable to tax under the Income Tax Act 1995 of Mauritius, at  a tax rate of 15% on their taxable income. However, a partial exemption regime was introduced from 01 January 2019, allowing companies deriving specific types of income to benefit from an 80% tax exemption of the specific foreign source income or foreign tax credit. In these cases, the effective tax rate is 3%.

Qualifying types of income for partial exemption include:

  • foreign dividends;
  • interest (excluding banks);
  • income from ship/aircraft leasing;
  • income attributable to permanent establishment which a resident company has in a foreign country;
  • income from Collective Investment Scheme (CIS) /Closed-End Fund/CIS manager/CIS administrator/adviser/asset manager;
  • reinsurance/reinsurance brokering activities;
  • leasing & provision of international fibre capacity; and
  • sale, financing, arrangement, asset management of aircraft, and aviation advisory services.

GBCs are also eligible for a range of tax benefits, such as no withholding tax on dividends and interest paid to non-residents and no capital gains tax on the sale of shares.

Substance Requirements

To qualify for partial exemption, GBCs must meet certain substance requirements, which entail:

  • employing a reasonable number of suitably qualified persons to conduct core income-generating activities in or from Mauritius;
  • maintaining a minimum level of expenditure proportional to its activities;
  • the need for GBCs to be managed and controlled from Mauritius, meeting criteria such as:
  • having at least 2 resident directors of sufficient calibre;
  • maintaining its principal bank account in Mauritius;
  • keeping accounting records at its registered office in Mauritius;
  • preparing statutory financial statements and auditing them in Mauritius; and
  • conducting meetings of directors with at least 2 directors from Mauritius.

GBCs must conduct core income-generating activities in or from Mauritius as per the Income Tax Act 1995 (as amended) of Mauritius which includes activities such as trading, investment holding, asset management, and intellectual property licensing. A GBC is not permitted to engage in business activities in Mauritius, except for incidental activities that are necessary for the company’s operations., and a GBC must at all times be administered by a management company.

This briefing is for informational purposes only and should not be construed as legal advice.