The Mauritius Advantage

Let’s Talk About Foundations in Mauritius

Trusts and foundations in Mauritius are taxed at a flat rate of 15% on their chargeable income, similar to companies. Prior to July 1, 2021, certain trusts and foundations could file a declaration of non-residence with the Mauritius Revenue Authority (MRA) to be exempt from income tax for that year, provided specific conditions were met, such as the settlor/founder and all beneficiaries being non-residents or holding global business licenses under the 2007 Financial Services Act (FSA).

However, the Finance Act 2021 repealed the non-residence declaration, although existing trusts and foundations prior to June 30, 2021, can still benefit from this exemption until June 30, 2024, during a grandfathering period. During this period, no exemptions can be claimed for new assets or activities initiated after June 30, 2021.

Following the amendments, trusts and foundations will be considered non-resident if they are centrally managed and controlled outside Mauritius, as per Section 73A of the Income Tax Act (ITA). The MRA has outlined criteria for determining central management and control, which includes the residency of trustees/beneficiaries for trusts and the founder/beneficiaries for foundations.

Once a trust or foundation qualifies as a resident, it will be taxed on its worldwide income at 15%, but may claim an 80% partial exemption on certain income categories if substance requirements are met. Capital gains are not taxed due to the absence of a capital gains tax in Mauritius. Charitable trusts and foundations are exempt from tax.

Distributions to beneficiaries are classified as dividends, which are not subject to withholding tax. Resident individual beneficiaries are exempt on dividends up to MUR 3 million, with excess amounts subject to a 25% solidarity tax capped at 10% of leviable income. Non-resident beneficiaries are taxed according to their country of residence.

Resident trusts and foundations are subject to tax on their worldwide income, whereas non-resident trusts and foundations are liable only on income sourced from Mauritius. To determine the residency of a trust or foundation, one needs to examine the test of central management and control. The determinants of central management and control are to ensure substance in the post-base erosion and profit shifting (BEPS) era.

Distributions made by a trust or foundation are termed dividends and there is no withholding tax on dividend distribution in Mauritius.

Let’s Explore the Personal and Corporate Income Tax Structure in Mauritius

Mauritius has a favorable and straightforward tax system that attracts global investors. The key components of this tax structure include a corporate tax rate of 15%, which creates an appealing environment for businesses. Individuals benefit from a progressive income tax system, with rates ranging from 10% to 25%.

Value-added tax (VAT) is set at a standard rate of 15%, although certain sectors may enjoy reduced rates or exemptions. Notably, Mauritius does not impose capital gains tax, inheritance tax, or withholding tax on dividends, further enhancing its reputation as a tax-efficient jurisdiction.

This combination of low corporate tax, absence of capital gains tax, and various exemptions positions Mauritius as an attractive destination for international business and investment.

How Can You Be A Citizen of Mauritius

1. Good Character: The applicant must demonstrate good character.
2. Language Knowledge: The applicant must have adequate knowledge of English or any other language commonly used in Mauritius and understand the responsibilities of a citizen of Mauritius.
3. Residency: The applicant must have resided in Mauritius for five years or a shorter period (not less than twelve months) as accepted by the Minister in special circumstances, immediately preceding the application date.
4. Intent to Reside: The applicant must intend to continue residing in Mauritius if registered.

Let’s Talk About Forming A Company and Work Permits in Mauritius

• Proposed name of the company
• Full names, former names, residential addresses, and service addresses of all directors and secretaries
• Business occupations and directorships held by each director in public companies or subsidiaries. If a director serves on multiple subsidiaries within a single group, it suffices to state the holding company name followed by “group.”
• Shareholders’ full names, residential addresses, service addresses, number of shares taken, and amounts paid
• Whether the company is limited or unlimited, private or public
• Registered office address
• For one-person companies, the name of the secretary nominated by the proposed director to call a meeting of heirs in the event of the sole director’s death
• Business activities and location as per the Business Registration Act
• A declaration confirming the truthfulness of the information provided
• Full name of the applicant

1. A copy of the company’s constitution, if applicable, certified by at least one applicant
2. Signed consent from each proposed director or secretary, confirming they are not disqualified from holding office
3. Signed consent from each proposed shareholder, indicating the number and class of shares taken and the amount paid for those shares
4. For companies limited by guarantee, a document signed by each member signifying their consent to be a member and the amount they undertake to contribute in the event of the company’s winding-up
5. If documents are signed by an agent representing a shareholder or member, a proxy form authorizing the agent to act on their behalf

• Issue a certificate of incorporation
• Enter the company’s particulars in the Register
• Assign a unique company number

1. Original Certificate of Reservation (if any)
2. Photocopy of the passport for non-resident directors
3. Copy of the residence permit if the only director is a foreigner
4. Proof of the director’s address (e.g., utility bill)
5. Proof of the secretary’s address in the case of one-person companies

• At least one director must be a resident of Mauritius
• For companies holding a Category 1 or 2 Global Business License, incorporation is only effective after receiving approval from the Financial Services Commission

Corporate Tax in Mauritius: Nuances and Rebates