Mauritius

Overview

Mauritius has built one of the most sophisticated international financial services sectors on the African continent, underpinned by a genuine regulatory framework, strategic geographic positioning between sub-Saharan Africa and Asia, and an unmatched tax treaty network giving access to markets that pure secrecy jurisdictions simply cannot reach. An effective corporate tax rate as low as 3% — achieved through the partial exemption regime applied to qualifying income — makes Mauritius one of the most tax-efficient substance-respecting jurisdictions anywhere in the world.

Unlike the BVI or Seychelles, Mauritius is a treaty-access jurisdiction, not a secrecy jurisdiction. Its value lies in the combination of a low effective tax rate and the ability to use that rate in conjunction with 45+ bilateral tax treaties to significantly reduce withholding taxes on income flowing through the structure. This is why Mauritius has been, and remains, the primary routing jurisdiction for institutional and private investment into India and sub-Saharan Africa.

The Global Business Company (GBC)

The Global Business Company, established under the Companies Act 2001 and regulated by the Financial Services Commission (FSC), is the primary vehicle for international structures. The GBC must satisfy genuine substance requirements to qualify for treaty benefits and the partial exemption regime.

Substance requirements for a GBC:

• At least two resident directors of adequate calibre (typically directors with appropriate professional qualifications based in Mauritius)
• Resident company secretary
• Main bank account held in Mauritius
• Accounting records and board meetings held in Mauritius
• At least one board meeting per quarter held physically in Mauritius with quorum
• Audited financial statements prepared and filed with the FSC annually

These requirements mean the GBC is not a letterbox structure — it requires genuine, albeit proportionate, economic substance in Mauritius. This substance is what justifies the treaty claims and is what Mauritius tax authorities and treaty partners expect to see.

Partial Exemption Regime — ~3% Effective Rate

Mauritius's headline corporate income tax rate is 15%. However, the partial exemption regime exempts 80% of the following income categories from taxation:

• Foreign-source dividends
• Interest income (from approved sources)
• Royalties
• Foreign-source capital gains (on disposal of shares in non-resident companies)
• Leasing income

The resulting effective tax rate on qualifying income is 15% × (1 - 80%) = 3%. This is not a theoretical rate — it is the rate routinely applied to qualifying GBC income when the required substance conditions are met and returns are properly filed.

Tax	Rate
Headline Corporate Tax	15%
Effective Rate (qualifying income)	~3%
Capital Gains (non-resident companies)	0% (80% exemption on gains)
Withholding Tax on Dividends (to non-residents)	0%
Personal Income Tax	15% (flat rate)
VAT	15%

Treaty Network

Mauritius has concluded over 45 bilateral tax treaties, including with jurisdictions that are otherwise difficult to access through offshore structures:

Key treaty partners:

• India (revised DTAA, 2016)
• China
• South Africa
• Kenya, Uganda, Zimbabwe, Rwanda, Madagascar, Senegal, Mozambique, Botswana, Lesotho, Namibia, Swaziland, Tunisia, Egypt, Morocco
• Singapore, Japan, South Korea, Malaysia, Thailand
• UK, France, Germany, Luxembourg, Belgium, Netherlands, Sweden, Italy, Spain
• Barbados, Zambia, Bangladesh, Pakistan

The breadth of African treaty coverage is particularly significant — no other offshore jurisdiction comes close to Mauritius's treaty network on the continent. For fund managers and investors routing capital into African operating companies, a Mauritius GBC as the holding layer substantially reduces the withholding tax friction on dividends repatriated from African subsidiaries.

India Investment Gateway

Mauritius was for many years the dominant routing jurisdiction for foreign direct investment into India, due to the capital gains exemption under the original India-Mauritius DTAA. The 2016 amendment to the treaty changed the position: capital gains from disposal of Indian shares acquired after 1 April 2017 are now taxable in India. However:

• Dividends from Indian subsidiaries flowing through a Mauritius GBC still benefit from reduced withholding under the revised DTAA
• Interest flows benefit from a reduced withholding rate
• Pre-April 2017 acquisitions remain grandfathered under the old treaty
• Mauritius remains the practical preferred vehicle for Indian deal structures due to the combination of residual treaty benefits, familiarity of Indian counterparties and counsel with Mauritius structures, and the FSC's acceptance of typical Indian investment structures

HPT advises clients on current India-specific treaty positions as part of any Mauritius structuring engagement.

Authorised Company

For clients who do not require treaty access and prefer a lighter-touch, lower-cost structure, the Authorised Company (AC) is available. The AC is incorporated under the Companies Act but does not qualify for treaty benefits and is not required to maintain the same level of substance as a GBC.

The AC can be used for:

• Holding investments in jurisdictions where no treaty benefit is sought
• Operating businesses that do not require treaty-reduced withholding
• Acting as a feeder vehicle into a GBC or a separate operating structure

Annual FSC fees for an AC are significantly lower than for a GBC, and the substance requirements are minimal. The effective tax rate for an AC on offshore income can also be 0% under certain configurations, though this requires careful structuring advice.

Investment Funds and Financial Services

The FSC licences a comprehensive range of financial services activities, including:

• CIS (Collective Investment Scheme): open and closed-ended fund vehicles regulated under the Securities Act 2005
• Global Schemes: fund structures for sophisticated investors with assets sourced and managed internationally
• Expert Funds and Specialised Collective Investment Schemes: tailored vehicles for professional investors
• Investment Advisers and Dealers: licensed under the Securities Act
• Insurance: captive insurance vehicles for international groups
• Global Headquarters Administration (GHA): for multinational groups establishing Mauritius as the principal holding and management location

The Mauritius International Derivatives and Commodities Exchange (MINDEX), established to provide commodity and derivatives trading infrastructure, adds further depth to the financial services offering.

Trusts and Foundations

The Trust Act 2001 provides for the establishment of international trusts in Mauritius. Features include:

• Protector role expressly recognised
• Firewall provisions protecting trust assets from foreign forced heirship
• Up to 99-year duration
• Purpose trusts available for commercial structures
• Strong STEP-member professional trustee community based in Port Louis

The Foundations Act 2012 provides a civil law alternative for clients who prefer a foundation structure, with legal personality, foundation charter-based governance, and FSC registration.

Banking

The principal commercial banking infrastructure in Mauritius includes:

• Mauritius Commercial Bank (MCB) — largest bank; significant private banking and trade finance capabilities
• State Bank of Mauritius (SBM) — state-owned, significant regional network in Africa
• AfrAsia Bank — private banking focused, strong cross-border African and Indian credentials
• Standard Bank Mauritius — African banking giant's Mauritius operations
• Absa Bank Mauritius

Corporate banking for GBCs is generally accessible, particularly where beneficial ownership is clear, the business purpose is credible, and source of funds can be documented. MCB and AfrAsia Bank are routinely used for GBC account relationships. Timeline for account opening is typically 4–8 weeks.

Regulatory Environment

The FSC operates a rigorous but commercially oriented regulatory regime. It is a member of IOSCO (International Organisation of Securities Commissions), the Group of International Finance Centre Supervisors (GIFCS), and other international bodies. Mauritius is FATF compliant and participates in CRS and FATCA.

The FSC publishes detailed guidance on substance requirements and conducts substance reviews. Structures that cannot demonstrate genuine management and control in Mauritius risk losing treaty access and the partial exemption — making the substance requirements non-negotiable from both a compliance and a commercial planning perspective.

HPT's Assessment

Mauritius is HPT's recommended jurisdiction for clients seeking a treaty-access holding structure for investments into India, sub-Saharan Africa, or other treaty partner markets. The combination of the ~3% effective rate, genuine (not excessive) substance requirements, a well-regulated FSC environment, and deep treaty access makes it uniquely positioned.

It is not suitable as a low-cost offshore holding layer for clients who simply want a cheap structure with no substance — that is what Seychelles is for. But for clients building a proper treaty-access holding architecture, Mauritius delivers a quality-to-cost ratio that is hard to match anywhere in the world.