Global Business Category 1 (GBC1)
Principally governed under the Financial Services Act 2007 (FSA) and the Companies Act 2001, a Category 1 Global Business Licence Company (GBC1) is a Mauritian entity holding a valid global business licence and undertaking any lawful activity which is conducted outside Mauritius. A GBC1 falls under the supervision and monitoring of the Mauritius Financial Services Commission (FSC).
A GBC1 is considered to be tax resident in Mauritius and can enjoy benefits under the extensive Double Tax Agreement (DTA) network of Mauritius after the issue/renewal of Tax Residence Certificate (TRC) by the Mauritius Revenue Authority (MRA) provided the minimum criteria of substance in Mauritius is demonstrated.
Common Uses of a GBC1
- Investment holding
- Leasing activities
- Holding Intellectual Property Assets
- Financial Services
- International Licensing & Franchising
- Investment Holding & Commercialisation of Distribution Rights
- Purchase and Rental of Equipment
The effective management and control of a company needs to be demonstrated from its country of tax residency, a GBC1 needs to comply with the following basic criteria of demonstrating substance in Mauritius according to Section 71(4) of the Financial Services Act 2007 to enjoy the benefits under a treaty:
- Having at least two directors resident in Mauritius of sufficient calibre to exercise independence of mind and judgment.
- Providing for meetings of directors to include at least two directors from Mauritius.
- Maintaining at all times its accounting records at its registered office in Mauritius.
- Maintaining at all times its principal bank account in Mauritius.
- Preparing its statutory financial statements and have the same audited in Mauritius
- A GBC 1 is subject to a concessionary rate of income tax to a maximum effective rate of 3%
- A GBC1 must at all times have a registered office in Mauritius
- A GBC 1 is exempt from capital gains
- There is no withholding tax on payment of dividends, interests and royalties
- A GBC 1 is prohibited in dealing or transact with resident in Mauritius unless special derogation from the authorities
- Conversion from a GBC2 to GBC 1 is allowed and vice versa
- A GBC 1 must file audited profit & loss account and balance sheet annually with the Financial Services Commission, within 6 months of the financial year-end. The accounts must be prepared in accordance with internationally accepted accounting standards
- Annual tax return must be filed with the Mauritius Revenue Authority (MRA)
- An annual meeting must be held every year not later than 15 months of previous meeting and not later than 6 months after the balance sheet date of the company.
- A GBC1 should keep various records including minutes of all directors’ and shareholders’ meetings or resolutions, accounting records, share register, register of directors among others. Return and filing for a GBC1 with the Registrar of Companies are not opened to the public.
- Any change in the internal matters of a GBC 1 should be immediately filed with the authorities within prescribed time limit to avoid heavy penalties and sanctions.
- Only a licensed and qualified Management Company like SAB&T International Financial Consulting Ltd can provide registered office and act as secretary.
- A GBC 1 is generally used when income from overseas is derived mainly in the form of dividends, interest, royalties, capital gains and when tax treaty benefits need to be availed.
Global Business Category 2 (GBC2)
A Global Business Category 2 company is governed by the Companies Act 2001 and the Financial Services Act 2007. A GBC2 is a private company which conducts business with persons, all of whom are resident outside Mauritius, and in a currency other than the Mauritian rupee. A GBC2 provides for greater flexibility and is a suitable vehicle for holding and managing private assets.
It is a tax exempt company therefore has no access the network of Double Taxation Agreements of Mauritius. It cannot carry out business of company formation, administration and management or provide professional nominee or trusteeship services. A GBC2 may be locally incorporated or registered as a branch of a foreign company.
- Minimum of one director is required who may be a natural person or a body corporate
- Registered shares, preference shares, redeemable shares and shares with or without voting rights.
- There is no minimum capital requirement but at least one share must be issued and paid up.
- Par value shares may be stated in more than one currency
- Fractional shares are allowed
- Bearer shares are not allowed
- Shares may be subscribed by nominees
- Shareholders may be individual or corporate
- A GBC2 may acquire, redeem, reissue or purchase its own shares
- The Directors are required to ensure that the company meets the solvency test after making distributions. The solvency test is satisfied where the company is able to pay its debts as they become due and the value of the company’s assets is greater than the sum of the value if its liabilities and its stated capital.