GLOBAL BUSINESSES IN MAURITIUS URGED TO HEED TAX CHANGES
Investors holding shares in global companies registered in Mauritius should take heed of recent changes to the classification of companies.
Authorities have decided to abolish the Global Business Licence Category 2 regime from 1 January 2019 (although there are grandfather clauses applicable to certain category 2 companies, lasting to 30 June 2021 to allow for time to address these changes).
The classification of category 1 and 2 licences assigned to global companies will fall away. All remaining companies classified as such, will simply be known as Global Business Licence Companies (GBLC). A single tax regime will be applicable to such companies, with significant changes proposed to take effect from 1 January 2019.
Recently it was announced that Mauritius companies and partnerships that are majority foreign owned and which conduct international business will be required to register as GBLCs or apply to be regulated by the Financial Services Commission. Prior to this the trend had been for companies conducting global business only to cease using GBLC to establish operations in Mauritius. Rather they opted to establish standard domestic Mauritius resident companies as there was very little difference in the treatment of these vehicles.
It may now become necessary for these entities to approach the Financial Services Commission to obtain appropriate standing under Mauritius law (either a licence or some other form of regulation) and to appoint a duly authorised management company. The move is aimed at combating global threats such as money laundering, with seemingly considerable onus placed on the management companies to regulate such matters. Legislation should be available soon to clarify the application of these changes. Investors are cautioned to monitor the position.