Tax Haven Mauritius

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In March 2009, Milan Meetarbahn, CEO of tax haven Mauritius Financial Services Commission expressed his pleasure in seeing professionals looking forward to ethical conduct in a time of financial difficulty. This statement was made in response to the recent efforts made by tax haven Mauritius to ensure that the island continues to develop its financial services sector as the leading offshore financial centre within the region and in accordance with international norms and guidelines.

Country Overview

Mauritius is an island located at about 560 miles east of Madagascar and includes islands such as St. Brandom, the Agalega Islands and Rodrigues. Tax haven Mauritius became an independent state in 1968 and developed an economy based on agriculture but has also diversified into areas such as finance, industry and tourism. Tax haven Mauritius is currently home to over 9,000 offshore entities which are actively involved in trade, commerce and banking within South Africa and India.

Mauritius has a large religious community, which is divided into several beliefs, including Hinduism – the main religion, Christianity, Islam, Buddhism and Chinese. The official language of tax haven Mauritius is English.

Mauritius Fiscal Incentives and Advantages

Tax haven Mauritius has in place an attractive taxation structure for businesses and established a modern Securities Act, 2005, which governs the island’s securities based on the recommended standards of IOSCO (International Organisation of Securities Commissions).

As a tax haven Mauritius offers many advantages including:

  • Investment protection and agreements with 15 countries
  • Gateway to Asia, middle-Eastern and African markets
  • High rate of literate and bilingual work force
  • No stamp duty
  • No customs duty on imported office items
  • Double taxation treaties with about 33 countries, including China, Luxembourg, Barbados, Cyprus, Luxembourg, France, Sweden, India, Italy, Seychelles, Malaysia, Germany and the United Kingdom
  • No estate duty
  • No inheritance tax
  • No capital gains tax
  • No withholding tax
  • Concessionary personal income tax rate specially designed for expatriate employees, or a specified native Mauritian employee of a company holding a category 1 Global Business License
  • No exchange controls
  • Free and tax exempt repatriation of profits

Mauritius Legislative Framework

According to CEO of the Mauritius Financial Services commission (FSC), tax haven Mauritius has a “legal framework that strikes the right balance between the need for regulation and business development”. The CEO emphasized on the necessary AML/CFT (Anti-Money laundering and Combating the Financing of Terrorism) codes that have been implemented by the FSC Commission in an attempt to comply with international standards recommended by regulatory organisations such as the IOSCO, International Association of Insurance Supervisors (IAIS) and the Financial Action Task Force (FATF). In the press conference held on January 6, 2009, Meetarbahn, CEO also gave a briefing on the various regulatory measures that tax haven Mauritius was looking forward to undertaking in the near future, while highlighting the robustness and stability of tax haven Mauritius as a well regulated tax haven. He also explained that as a tax haven Mauritius prioritizes customer confidentiality and offering a wide range of financial products, tax incentives, Double Taxation Agreements and investment vehicles.

Some of the laws regulating financial services and activities are:

  • The Securities Act, 2005 (amended 2007)
  • The Stock Exchange Act (repealed)
  • The Stock Exchange (Investment by Foreign Investors)
  • The Securities (Central Depository, Clearing and Settlement) Act, 1996
  • The Unit Trust Act, 1989 (repealed)
  • The Financial Intelligence and Anti-Money Laundering Act, 2002
  • The Prevention of Terrorism
  • The Prevention of Corruption Act, 2002
  • The Income Tax (Foreign Tax Credit) Regulations, 1996

Mauritius Offshore Financial Services

In collaboration with the FSC, the Mauritius Offshore Business Activities Authority works toward sustaining the economic growth and diversification of Mauritius as a tax haven. The Authority was formed in 1992 and oversees offshore activities like:

  • International licensing and franchising
  • International employment services
  • International financial services
  • Pension funds
  • Offshore insurance
  • Offshore pension funds
  • Offshore funds management
  • International trading and assets management
  • International consultancy services
  • Aircraft financing and leasing

Mauritius Financial Services Commission (FSC)

The Financial Services Commission of tax haven Mauritius was created in 2001 under the Financial Services Development Act 2001. The FSC regulates and supervises non-banks financial services including insurance, securities and global business, which were formerly regulated by the Insurance Division of the Ministry of Economic Development, Financial Services and Corporate Affairs, Stock Exchange commission and the Mauritius Offshore Business Activities Authority respectively. Under the Financial Services Development Act 2001, by putting all non-banking activities under the FSC, including activities not regulated by any specific legislation, any business or financial activity cannot be conducted without prior licensing by the FSC.

Recent Developments

On February 26, 2009, the FSC of tax haven Mauritius formerly launched its Risk-Based Supervision (RBS) Framework. The RBS Framework involves a campaign which will last until July 2009 and is aimed at sensitizing and informing players within the financial sector on matters relating to financial services in Mauritius as a tax haven. Mechanism for onsite and offshore supervision of companies are also in place for overseeing areas such as record keeping, codes and the enforcement of regulations.

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