The best route for investment into India is via offshore company formation Mauritius.
Company incorporation in Mauritius sounds like an unlikely option to those who are focused only on old World offshore centers like Switzerland or the Isle of Man!
There are many ways for offshore company formation in Mauritius:
1. Category 1 and 2 Global Business Companies.
2. Collective Investment Schemes – Funds
3. Management Companies and Other Service Providers
1. GLOBAL BUSINESS VEHICLES
The offshore company formation mauritius available to carry global business activities from within Mauritius are companies holding a Category 1 Global Business Licence (GBC1) , and companies holding a Category 2 Global Business Licence(GBC2).
Other entities available are Protected Cell Companies [PCC], Trusts and société which we shall cover elsewhere.
i. a) Category 1 Global Business License [GBC 1]
A Global Business corporation (Category 1) is an offshore company formation mauritius which undertakes any of the following activities listed in the Second Schedule of the FSDA 2001 which is carried on from within Mauritius with persons all of whom are resident outside Mauritius and which is conducted in foreign currency:
– Aircraft financing and leasing
– Assets management
– Consultancy services
– Employment services
– Information and communication technologies
– Licensing and franchising
– Logistics and or marketing
– Operational headquarters
– Pension funds
– Shipping and Shipping Management
– Any other activity as may be approved by the Commission
This type of company is qualified to take protection of the tax treaties to which Mauritius is a party if it comes within the definition of a resident under the taxation laws. Foreign direct investment into India has taken this route largely because of the highly successful double tax treaty between the two countries!
* A GBC 1 is required to file with the Financial Services Commission within six months after the close of its financial year, annual audited financial statements prepared in accordance with the International Accounting Standards or internationally recognised accounting standards.
* The GBC 1 may be set up by direct offshore company formation mauritius, or by registration of a branch of a foreign company, or by way of continuation where this is allowed by the law in the country of origin.
* A branch of a foreign company may have access to Mauritius’ tax treaties provided that the local tax authorities are satisfied that effective control and management of the foreign company is in Mauritius.
* The facility of continuing a foreign company registered in a foreign jurisdiction as a GBC 1, and so permitting existing holdings of the foreign company in a country with which Mauritius has a double taxation treaty to benefit from relief under that treaty, has proved attractive to a number of major investors.
* A GBC 1 may be unlimited or limited by shares or by guarantee.
* A GBC 1 may be registered as a Limited Life Company or a Protected Cell Company.
ii. b) Category 2 Global Business License – the simple offshore company.
A Global Business 2 offshore company formation mauritius which is carried on by a private company:
– which is a company incorporation in mauritius or registered under the Companies Act 2001
– which does not conduct business with persons resident in Mauritius nor conducts any dealings in Mauritius currency;
– which holds a Category 2 Global Business License.
– It is exempt from the provisions of the Income Tax Act and is declared as non resident for tax purposes.
– It is a suitable vehicle for holding and managing private assets.
– It is however not allowed to raise capital from the public or to conduct any financial services or to act as a fiduciary.
– The GBC 2 company incorporation in mauritius is not resident for tax purposes and therefore does not benefit from double taxation relief under tax treaties.
– The GBC 2 may either be limited by shares or by guarantee or limited by shares and guarantee or simply unlimited.
– A GBC 2 may also be structured as a Limited Life Company.