Starting a business in Mauritius: How to choose your company type and structure

Known as the Pearl of the Indian Ocean, Mauritius is attracting more and more foreign investors and entrepreneurs thanks to its business-friendly environment and booming economy. Before you embark on a new venture in Mauritius, whether you’re an entrepreneur or an investor, Magellan gives you an insight into the three main types of companies available, their characteristics and the benefits they provide.

Domestic Companies (DC): To develop your activities with Mauritian residents

Domestic Companies (DCs) are entities domiciled in Mauritius and providing services mainly to local residents. These are usually versatile companies and are suitable for a wide range of business activities, from trade to investment and consultancy. By creating a Domestic Company (DC), non-residents are able to hold shares in these companies, offering an investment opportunity to foreign partners.

Global Business Companies (GBC): For greater access to global markets

Global Business Companies (GBCs) are licensed by the Financial Services Commission (FSC). They can carry out transactions with Mauritian residents and non-residents. Previously categorized as GBC 1 and GBC 2, they are now grouped under a single name. Founders of GBCs must obtain a tax residence certificate to benefit from double taxation treaties signed by Mauritius with other countries. In short, GBCs can benefit from reduced tax rates as long as they meet specific requirements in terms of economic substance.

Mauritius Authorised Companies (MAC): A tax-efficient option

Mauritius Authorised Companies (MACs) are considered non-resident companies. Therefore, they benefit from significant tax exemptions. In fact, MACs are exempted from corporate income tax, capital gains tax and withholding tax in Mauritius. Governed by the Financial Services Act 2007, they are ideal for international business activities, investment holding, or intellectual property. In the case of MACs, it’s worth noting that their files and records are not accessible to the public.

How to choose the ideal company structure in Mauritius

In addition to the various types of companies that exist, Mauritius offers different legal structures for businesses:

• Partnerships limited by shares: Shareholders’ liability is limited to the amount outstanding on their shares;
• Companies limited by guarantee: Each member’s liability is limited to the amount they undertake to contribute to the company’s assets;
• Unlimited companies: Shareholders have unlimited liability for the company’s debts.

Limited-life companies: A project-specific option

Limited-life companies are formed with a defined lifespan, generally not exceeding 50 years. This structure can be beneficial for short-term projects or those subject to a specific contract period. However, companies can choose to extend their lifespan to 150 years if deemed necessary.

Single-member companies: An option for sole traders

Sole traders in Mauritius can opt to create a “single-member company”. However, in such cases, a secretary must be appointed to serve in case of the death or incapacity of the sole shareholder or director of the single-member company.

Dormant companies: An alternative for administrative management

Companies that do not wish to continue trading for a given period are allowed to declare themselves “dormant companies”. This helps reduce their administrative burden while retaining the company’s legal structure.

Choosing between public and private companies

Foreign businesses in Mauritius can choose to incorporate as :

• Public companies – whereby they need to have at least 25 shareholders and can sell their shares to the public to raise funds.
• Private companies – these can have a maximum of 50 shareholders and cannot offer shares to the public.

Factors to consider when choosing a company

When choosing the type and structure of a company in Mauritius, you need to consider several factors, such as:

• Tax considerations;
• Nature of the business activity;
• Financing requirements;
• Long-term business objectives.

Find the winning formula for your business in Mauritius with Magellan!

As you might have understood, Mauritius offers diverse company registration options, each with its advantages and specific features. Whether you want to focus on the local market or expand your activities worldwide, contact us now to define a formula tailored to your needs!