The Global Business Corporation: an effective tool for international tax planning

A Global Business Corporation (GBC) is a resident corporation which proposes to conduct business principally outside of Mauritius and is licensed by the Financial Services Commission. A resident corporation is a body corporate formed or registered in Mauritius and may include any company, trust, société, partnership or any body of persons governed by the laws of Mauritius.

A GBC is an ideal structure to benefit from the Mauritius business friendly environment. Demonstrating substance in Mauritius and as a tax resident entity, a GBC benefits from Mauritius’ extensive double taxation avoidance treaty network.

A GBC is ideal to strategically manage and grow your operations. If you’re thinking of expanding your company operations overseas, then you should think about the Mauritius GBC as an effective tool for international tax planning.

A Mauritius GBC is liable to corporate tax at the harmonised rate of 15% but it will qualify for an exemption of 80% of the specific foreign source income or foreign tax credit. Such foreign source income include dividends, income derived by a Collective Investment Scheme, profit gained from a permanent establishment of a resident company abroad for example. In these cases, the effective tax rate is 3%.

 

The Global Business Corporation benefits from all the advantages of Mauritius as an International Financial Centre

Mauritius is a safe and well-regulated jurisdiction which adheres to international norms and regulations. It ranks 1^st in Africa and 13^th worldwide on the World Bank Doing Business Survey. It also ranks 1^st on the Mo Ibrahim Index of African Governance. The country also forms part of the African Union.

There are many reasons that make Mauritius one of the best offshore jurisdictions:

 

Requirements for setting up a GBC

The requirements for setting up and maintaining a GBC in Mauritius mostly include the following:

• A minimum of one shareholder
• A minimum of two qualified directors residing in Mauritius
• Board meetings must be held in Mauritius
• Main bank account to be held in Mauritius
• Have physical offices in Mauritius, where accounting records and statutory documents including register of members, debenture holders, and officers must be kept
• Appoint a local management company like Nexus Global Financial Services Limited, to act as liaison between the GBC and the Financial Services Commission (FSC)
• Must file audited Profit & Loss account and Balance Sheet annually with the FSC within 6 months of the financial year-end
• Tax returns must be filed with income tax authorities
• Have a company clause stating that disputes shall be solved by arbitration in Mauritius

 

The formalities, procedures and documentation prior to the formation of a GBC are generally completed within a week.

 

Uses of a GBC

The GBC is a versatile structure that can be used profitably for a host of uses.

Classical uses of the GBC include:

 

Investors can also open a GBC in Mauritius to be used for the conduct of financial services though additional licensing conditions are required to be fulfilled. Many GBCs are in fact used for financial management purposes. Such uses comprise:

• Asset management and treasury management
• Investment Advisory
• Fund Management
• Collective Investment Schemes (CIS)
• Credit finance
• Custodial services
• Leasing
• Factoring
• Occupational pension scheme
• Pension fund administrators and pension scheme management
• Retirement benefits scheme
• Registrar and transfer agent

 

The GBC works well for investors using Mauritius as they benefit from a business-friendly jurisdiction. Investors using Mauritius are able to take advantage of our international financial centre for the conduct of business with Asia and Africa.

 

Please read our other articles on setting up in Mauritius:

Setting up an Offshore Company in Mauritius

The Reasons why you will Set Up an Authorised Company in Mauritius