Mauritius is widely known for its Global Business Licence companies and its wide network of double taxation treaties within the framework of a well regulated International Financial Centre. It is a favoured investment route, particularly for investment in Asia and in Africa.

The Government of Mauritius, with a view to giving a new boost to the island’s non-banking financial services sector, is currently adopting new laws such as the Securities (Amendment) Act 2007, the Financial Services Act 2007 and the Insurance (Amendment) Act 2007.  These reforms aim at further opening the Mauritian economy to foreign investors by attracting more “business of substance” in the global business sector.

The Global Business Sector

As a major International Financial Services Centre, the Republic of Mauritius attracts many foreign investors, given its strategic location, excellent telecommunication facilities, its political and economic stability, the adoption of a forward-looking and business-oriented approach, its dual legal system (Common and Civil law), its strategic time zone between Europe and Asia and a well educated, efficient and bilingual workforce. It offers investors with modern products and services best suited for their needs in various sectors such as international commerce, consulting, tax planning, asset protection, wealth management, insurance, securities among others.

Any non-resident wishing to set up a company under the laws of Mauritius, but not active within the island, will incorporate a Global Business entity. It will either hold a Licence Category 1 (GBL1) or 2 (GBL2). A GBL1 benefits from the 33 double taxation agreements (DTA) Mauritius has established; it is taxed at the rate of 15 percent. Through tax credits, the effective tax rate can be reduced to zero percent. There is neither capital gains tax nor withholding tax on dividends and interest paid to non-residents. A GBL2 is not subject to any taxation. It is equivalent to the Seychelles IBC which AAMIL also sets up through its recently established office in the Republic of Seychelles.

The Mauritius Private Trust Company

The laws of Mauritius also provide for the possibility of setting up a Private Trust Company (PTC) either as a GBL 1 or a GBL2. A PTC is a company formed by an individual, whose purpose is to act as trustee to one or to a limited number of trusts, for the benefit of a single family or of different branches of a family or for distinct (but related) family groups. As opposed to a licensed ‘qualified trustee’ under Mauritius law, such a PTC can not act as trustee by way of business, i.e., to the public in general. It can only act as trustee for specified high net worth families or family groups who are able to evaluate and assume the financial risks and economic consequences of their investments.

The administration, investment management services or investment advice required in connection with the trusts can be outsourced to licensed service providers. Since the activity of a PTC is generally reduced to that of an investment holding company, it will operate under the form of a GBL1 or GBL2. As a GBL2, the PTC offers unique characteristics: it will not be subject to any regulatory controls, it can be set up very quickly and confidentiality is ensured since there is no public register of directors and shareholders of the PTC, nor mandatory registration of the individual underlying trusts.

From an administrative point of view, the major advantage of the Mauritius PTC is the possible involvement of the settlor or a family member or personal advisor on the board of the PTC. This will allow a greater degree of direct control, as compared to a standard trust.

A PTC must be incorporated through a Mauritius Licensed Management Company such as AAMIL Ltd. The Management Company is accountable towards the Financial Services Commission and responsible for the PTC’s conduct of business.

Conclusion

These are some of the possibilities when using Mauritius as an International Financial Services Centre. Mauritius provides the needed stability and legal protection to ensure a sound structuring of one’s assets, even spanning over several generations… and not to forget some out of this world’s best beaches!

The author is Managing Director of AAMIL Ltd, corporate financial services provider. The Group also provides trustee and asset management services. Its offices are in Port Louis (Mauritius), Geneva (Switzerland), Victoria (Seychelles), London (UK), Grand-Duchy (Luxembourg) and Mumbai (India).

Head Office

European Office

Suites 340-345 Barkly Wharf
Le Caudan Waterfront
P.O. Box 1070, Port Louis
Republic of Mauritius

8, Place du Bourg de Four
P.O. Box 3627
CH-1211 Geneva 3
Switzerland

Tel. (230) 210 1000
Fax. (230) 210 2000

Tel.: (41) (22) 818 61 00
Fax: (41) (22) 818 61 01

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.