Following the presentation of the national Budget Speech by The Honourable Pravind Kumar Jugnauth, Prime Minister, Minister of Finance and Economic Development on the 15th of June 2018, key budgetary measures have been put forward which will transform the Mauritian Financial Services Sector, and more specifically the Global Business Sector.
Whilst all these measures are subject to parliamentary debate and approval (and as such there remains items to which no concrete answers have been provided as of date), we, at Tri-Pro Administrators Ltd, have prepared this FAQ to clarify the numerous questions that our clients and stakeholders may have on the Global Business Sector.

1.   What will happen to the companies holding a Global Business Category 2 (GBC2) licence?

  • The Financial Services Commission (FSC) will stop issuing GBC2 licences to new applicants as from 1st January 2019.
  • Companies which have been issued with a GBC2 licence prior to 16th October 2017 will continue to benefit from the current regime until 30th June 2021.
  • Other companies who have been issued/will be issued a GBC2 licence after 16th October 2017 and until 31st December 2018 will eventually have to surrender this GBC2 licence to then choose one of the below options.

2.   What are the options available to any company holding a GBC2 after the 30th June 2021 cut-off?

  • As already, stated, companies holding a GBC2 licence will no longer benefit from the advantages of such a regime, and would thus have to either:    

(i)    Convert into a Global Business Licence company; or

(ii)   Convert into a Mauritian domestic company.

3.   What will happen to the companies holding a Global Business Category 1 (GBC1) licence?

  • GBC1 licences will be renamed Global Business Licences.
  • Enhanced substance requirements* will be imposed on entities holding a Global Business Licence (*not yet defined).
  • The Deemed Foreign Tax Credit regime (which was previously available to companies holding a GBC1 licence) will be abolished as from 31st December 2018, this regime having been flagged as potentially harmful by the Organisation for Economic Co-operation and Development (OECD).     

4.   How will companies holding a Global Business Licence (including ex-GBC1, ex-GBC2 & domestic companies) be taxed?

  • A “Partial Exemption Regime” will now be introduced as from 1st January 2019, whereby 80% of specified income will be exempted from income tax.
  • The Partial Exemption Regime will be granted to ALL companies in Mauritius, except banks, subject to the satisfaction of pre-defined substantial activities requirements of the FSC.
  • The existing credit system for the relief of double taxation will continue to apply where partial exemption is not available.

5.   What will be considered as specified income under the Partial Exemption Regime?

  • Specified income for the purpose of the Partial Exemption Regime shall include:

(i)  Foreign source dividends and profits attributable to a foreign permanent establishment;

(ii)  Interests and royalties; and

(iii)  Income from the provision of specified* financial services (*note that this has not yet been further defined).

6.   What will be the licence and administration fees payable in relation to a Global Business Licence company?

  • Licence and other statutory fees associated to the application for incorporation of a Global Business Licence company are yet to be disclosed by the FSC.
  • Updated administration fees shall be calculated when more information is sent out regarding this new regime.

7.   What about domestic companies?

  •  As stated above, domestic companies will, as from 1st January 2019, be eligible to the Partial Exemption Regime, subject to the satisfaction of the pre-defined substantial activities requirements by the FSC.
  • Hence, there will be a new harmonized fiscal regime for domestic and Global Business companies.
  • A Global Business Licence must be sought with the FSC through a Management Company by all domestic companies and partnerships incorporated/registered, (i) whose majority shareholdings are held by non-residents; and (ii) which conducts business mostly outside of Mauritius.

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