Mauritius Company Formation Frequently asked questions (FAQs)

Here's a more comprehensive summary of the differences between GBC 1 and GBC 2 companies in Mauritius:

GBC 1 (Global Business Category 1) Companies:

1. Residency and Taxation:

• GBC 1 companies are considered residents of Mauritius for tax purposes.

• They are subject to a flat-rate tax of 15% on their chargeable income.

• They benefit from a Deemed Foreign Tax Credit (DFTC) of 80%, resulting in an effective tax rate of 3%.

• They can apply for a Tax Residence Certificate (TRC) and access Mauritius' network of Double Tax Treaties.

2. Requirements:

• GBC 1 companies must establish more substance in Mauritius, including having at least two directors residing in Mauritius who are qualified and independent.

• Their principal bank account must be in Mauritius.

• Accounting records must be maintained in the registered office in Mauritius.

• Financial statements must be prepared and audited in Mauritius.

3. Dealings with Mauritian Residents:

• GBC 1 companies may have dealings with Mauritian residents but require prior authorization from the Financial Services Commission (FSC).

4. Permitted Activities:

• GBC 1 companies can engage in a wide range of business activities, including those described in their business plan submitted to the FSC.

GBC 2 (Global Business Category 2) Companies:

1. Residency and Taxation:

• GBC 2 companies are not considered residents in Mauritius for tax purposes.

• They are not liable to be taxed by the Mauritian government.

• They are not eligible to benefit from the Double Taxation Treaties network.

2. Requirements:

• GBC 2 companies are expected to maintain a Registered Agent in Mauritius at all times, and only management companies can act as Registered Agents.

3. Dealings with Mauritian Residents:

• GBC 2 companies are prohibited from dealing with Mauritian residents.

4. Permitted Activities:

• GBC 2 companies are more restricted in the types of activities they can engage in. They are generally barred from engaging in certain activities, including banking, financial services, and holding or managing investment funds.

In summary, the main differences between GBC 1 and GBC 2 companies in Mauritius relate to their tax residency, tax obligations, requirements for substance in Mauritius, dealings with Mauritian residents, and permitted business activities. GBC 1 companies are residents, subject to a low tax rate, and have more flexibility in their activities, while GBC 2 companies are non-residents, exempt from taxation but have more restrictions on their operations. The choice between GBC 1 and GBC 2 depends on a company's specific objectives and tax planning requirements.