By Cledina Ernest
Situated in the Indian Ocean, Mauritius has gained popularity as an offshore jurisdiction thanks to the benefits the country provides when it comes to business optimisation and expansion. This article discusses why it is right decision for start-ups to set up a business in Mauritius.
What is an offshore company?
A company whose main activities take place outside the territory of the country where it is registered is known as an offshore company. Tax incentives, regulatory environment and the ease of song business are among the main reasons why start-ups decide to be incorporated as an offshore entity in Mauritius.
What are the advantages of setting up an offshore company in Mauritius?
There are numerous advantages that encourage entrepreneurs and investors to register an offshore company in Mauritius.
The country has a stable political environment and a strong legal system that makes it a safe place to do business. Additionally, Mauritius is the home to many international banks and financial service providers, which can make it easier to access the capital you need to grow your business.
Additionally, the government of Mauritius offers a number of tax incentives to businesses that register as offshore entities, including an interesting tax rate, the absence of capital gains tax and withholding tax, as well as a wide network of Double Taxation Avoidance Agreements (DTAAs).
As a jurisdiction of repute and substance, Mauritius has a strict level of compliance regarding the establishment of an offshore company in Mauritius, which is aligned with international best practices.
For those looking to set up their company in Mauritius, it is advised to get in touch with professional service providers that are acquainted with the Mauritian legal system and who will be able to administer your structure so that your business is in line with local laws and regulations.
The economy of Mauritius has shown a stable progress in the recent years. The island has enticed a great number of foreign investors with its robust financial services sector. Moreover, Mauritius is being as ideal destination for start-ups to broaden their activities in Africa as it possesses a stable political environment and ranks first in Africa for Good Governance.
There are numerous advantages that you can have from establishing your business in Mauritius. The Mauritian government has put in place a number of benefits like improved custom duties and tax holidays for specific activities to entice more businesses to expand their activities in the country.
A skilled and bilingual labour force
Mauritius possesses a highly proficient and bilingual labor force. Although English is the official language, a large portion of the population is fluent in French, making it commonplace for both languages to be used in the business world. With a literacy rate exceeding 91%, the majority of workers possess undergraduate and postgraduate degrees, many of which are attained from renowned international universities in Europe and North America.
The information and communications technology (ICT)/business process outsourcing (BPO) industry is also a significant contributor to Mauritius’ economy. Boasting over 500 IT firms, the country provides IT outsourcing, software, and application development services to multinational corporations across the globe. The cost-effective nature of Mauritius further entices global companies to conduct business on the island.
How to proceed for the incorporation of a company in Mauritius
In order to establish a company in Mauritius, the following information must be submitted to the local authorities:
- Potential company name (if applicable);
- Business activity type;
- Applicable Due Diligence documents;
- Address of the registered business office; as well as
- Phone number and email address
The process of setting up a company in Mauritius is relatively straightforward and typically takes around three business days. However, the exact timeline and requirements depend on the specific type of company being registered. For example, if establishing a regional headquarters in Mauritius, it is necessary to determine the appropriate business structure for your operations and obtain approval from the Financial Services Commission.
Trade at international level
Additionally, Mauritius’ strategic location and network of Free Trade Agreements are attractive features for companies looking to penetrate the Asian, African and the Middle Eastern markets.
Mauritius maintains a flexible economic trade policy and favorable regulations with numerous nations. Being a World Trade Organization member and a signatory to the General Agreement on Tariffs and Trade, Mauritius is a renowned business and investment center in Africa, particularly for international commerce.
Located at the intersection of major maritime routes and in close proximity to countries with significant markets, Mauritius is an ideal destination for international trade, granting access to global markets comprising billions of prospective clients. Additionally, Mauritius participates in bilateral and regional trade agreements:
- As a member of COMESA, SADC, Indian Ocean Commission (IOC), IOR-ARC, and the African Continental Free Trade Area (AfCFTA), Africa is well-connected in trade
- Under the EU-East Africa Interim Economic Partnership Agreement, collaboration with the European Union (EU) is established
- The Mauritius-China Free Trade Agreement fosters trade relations between the two nations
- The United States-African Growth and Opportunity (AGOA) facilitates trade with the US
- Membership in the Generalized System of Preferences (GSP) offers additional advantages
- Over 43 countries in Europe, Asia, and Africa have Double Tax Avoidance Agreements (DTAAs) in place
- Over 20 countries have established a network of Investment Promotion Protection Agreements (IPPAs)
- The UK market provides duty-free access under the Economic Partnership Agreement
- The Comprehensive Economic Cooperation and Partnership Agreement ensures preferential market access with India.
Photo credit: Andrew Harvard (Pexels.com)
