MAURITIUS Law and Practice Contributed by: Fayaz Hajee Abdoula, Yashna Munbauhal and Yojna Beesoon, BLC Robert & Associates
Trusts A trust is treated as being tax resident in Mauritius if it is administered in Mauritius and a majority of the trustees are resident in Mauritius, or if the settlor of the trust was resident in Mauritius at the time the instru- ment creating the trust was executed. Foundations A foundation is tax resident in Mauritius if it is regis - tered in Mauritius or has its central management and A société or partnership is treated as a tax resident entity if its seat ( siège ) is in Mauritius and if it has at least one associate/partner ( associé ) or managing ( gérant ) resident in Mauritius. 1.4 Applicable Corporate and Individual Tax Rates control in Mauritius. Transparent Entities Subject to applicable credits and exemptions, incor - porated businesses are generally taxed at the rate of 15%. Companies engaged in the export of goods or manufacturing activities in a freeport zone are taxed at the rate of 3%. Partial Exemption Regime Under this regime, subject to fulfilling certain pre - scribed substance requirements, a company can benefit from a partial exemption of 80%, or 95% as applicable, on certain specified types of income. This would reduce the tax rate on these specified incomes to 3%. Foreign Tax Credit Where the incorporated business has derived income from abroad, it may claim tax credit in respect of for - eign tax paid against income tax payable in Mauritius on that foreign source income, provided the tax suf - fered abroad can be evidenced. Underlying Tax Credit Where a dividend is paid by a company that is not resident in Mauritius to a Mauritius-resident compa - ny that owns, directly or indirectly, not less than 5% of the share capital of the company paying the divi - dend, the credit allowed will, in addition to any foreign tax charged on the dividend, whether directly or by
treated as being tax-transparent and will therefore not be taxable in Mauritius. A limited partnership that is fiscally transparent will not be eligible to take advantage of any double taxation avoidance agreements to which Mauritius is a party. Trusts A trust is created under the Trusts Act 2001. It is rela - tively easy to establish, as registration, incorporation and corporate filings are not required. An instrument in writing is required containing certain information (including the trust property, name of the trustee, objects of the trust and beneficiaries/class of ben - eficiaries). A trust can have a maximum of four trustees, of whom one must be a qualified trustee. A qualified trustee is a management company or such other person resident in Mauritius as may be authorised by the Financial Services Commission to provide trusteeship services. The aforementioned entities are taxed as separate legal entities. 1.2 Use and Taxation of Transparent Business Structures Sociétés (partnerships), limited partnerships and lim - ited liability partnerships are the commonly used tax transparent entities in Mauritius. While sociétés are commonly used in commercial and property transactions at the domestic level, limited partnerships and limited liability partnerships are used as flexible investment vehicles in Mauritius by foreign investors to structure their investments from foreign jurisdictions. 1.3 Tests for Determining Tax Residence Companies A company is tax resident in Mauritius if it is incorpo - rated in Mauritius or has its central management and control in Mauritius. Note, however, that a company incorporated in Mauritius shall be treated as non-res - ident if it is centrally managed and controlled outside Mauritius
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