In an earlier article, we saw how easy it was to start a business in Mauritius and how advantageous it could be. We also talked about the different types of business structures over there, including a sole proprietorship, a general partnership, a limited partnership, a global business license Type 1 company (also known as GBC1), and an international business license type 2 company (also known as GBC2).

GBL (GBC1 and GBC2) company in Mauritius

That said, we paid special attention to the last two types, Mauritius GBC1 and GBC2, as they were the most pertinent to anyone who didn’t reside in Mauritius but wanted to start a business there all the same.

However, after joining the BEPS Inclusive Framework (opens in a new tab), the Mauritian government passed the Finance (Miscellaneous Provisions) Act 2018, changing how individuals can conduct business.

For one thing, the GBC1 label was changed to GBL, Global Business License, whereas the GBC2 category was abolished and replaced with the category of Authorised Companies.

Additionally, the new categories are subject to different laws and taxation requirements than their predecessors.

So, let’s take a look at what this all means for individuals planning to open a business on a small African island.

We’ll start with a quick refresher on the old system before looking at how the BEPS Inclusive Framework changed things.

After that, we will learn more about the new system and see what the requirements are for setting up shop over there.

GBC 1 companies and GBC 2 companies

Before the Mauritius National Assembly (opens in a new tab) passed The Finance Act 2018, Mauritius companies operating globally had to register for either a GBC1 license or a GBC2 license, and each license was suited for specific types of businesses and offered unique perks.

A Global Business Category 1 (GBC1) license has been issued to companies incorporated in Mauritius yet performed most of their business outside of the country.

According to the Financial Services Commission (opens in a new tab), FSC for short, to qualify for a Global Business Category 1 license, a business had to be residing in Mauritius and have a management company submit the appropriate applications and fees on its behalf.

It is worth pointing out that when we are talking about management companies, we are discussing special companies that received a Management Company License from the FSC.

Additionally, Mauritius companies applying for a GBC1 license were encouraged to establish more substance in Mauritius through the following actions:

  • The business had to have a minimum of 2 directors who not only resided in Mauritius but also were qualified enough to exercise independence of mind and judgment.
  • The business’s principal bank account had to be in Mauritius. TIP to read:Mauritius Banks how to
  • The business’s accounting records had to be kept as well as maintained in its registered office in Mauritius.
  • The business had to have its financial statements both prepared and audited in Mauritius.

In return for complying with all these requirements, Global Business Category 1 companies enjoyed several perks.

For starters, seeing as global business 1 companies were considered residents of Mauritius, there was a flat-rate tax of 15% on their chargeable income.

But, in an effort to be business-friendly and to stimulate foreign investment, the Mauritian government provided these same companies with a Deemed Foreign Tax Credit (opens in a new tab), DFTC for short, that reached 80%. TIP to read: The reasons to invest in Mauritius.

This meant that GBC1 companies effectively paid a tax rate of 3%.

Even better, these companies were able to apply for a Tax Residence Certificate, TRC, and upon receiving it, they profited from the network of Double Tax Treaties established by Mauritius.

On the other hand, Global Business Category 2 (GBC2) companies were not considered as residents in Mauritius.

Consequently, they were never liable to be taxed by the Mauritian government, but, at the same time, GBC2 companies weren’t eligible for profiting from the Double Taxation Treaties network.

Seeing as GBC2 companies weren’t residents in Mauritius, they weren’t subject to as many requirements as GBC1 companies were.

Nevertheless, GBC2 companies were expected to maintain a Registered Agent in Mauritius at all times, and only management companies were eligible for acting as Registered Agents.

There were several other major differences between GBC1 companies and GBC2 companies.

For instance, whereas GBC1 companies were allowed to have dealings with Mauritian residents provided that the company had the prior authorization of the FSC, GBC2 companies were prohibited from dealing with Mauritian residents at all.

Another difference was that GBC1 companies were confined to the activities they described in the business plan they submitted to the FSC when applying for their license, yet GBC2 companies were barred from engaging in several activities, including banking, financial services, and holding or managing investment funds.

The Finance Act 2018


BEPS (opens in a new tab) stands for Base erosion and profit shifting.

It refers to the unscrupulous tax strategies adopted by some multinational corporations to avoid paying taxes through the exploitation of gaps and loopholes in international tax rules.

There are multiple examples (opens in a new tab) of this behavior, and developing countries are the ones that are hit the hardest because they rely heavily on corporate income tax.

To combat this, the Organization for Economic Co-operation and Development, OECD (opens in a new tab) for short, along with the G20 introduced the Inclusive Framework on BEPS in 2013, which urges countries to implement several measures to reduce tax avoidance, to make international tax rules more coherent, and to establish a tax environment that is more transparent.

Specifically, the OECD’s action plan included 15 measures that were designed to help governments tackle BEPS, and more than 135 countries and jurisdictions are working alongside the OECD to implement the action plan.

Moreover, more than 85 countries and jurisdictions agreed to sign The Multilateral BEPS (opens in a new tab) Convention, committing themselves to carry out the 15 aforementioned measures. Mauritius is one of those countries.

Mauritius tackling BEPS:

It wasn’t long after joining the BEPS Inclusive Framework in November of 2016 that Mauritius started following through on its commitment.

In the Budget Speech for 2018-2019, which was entitled “Pursuing our transformative journey,” Mauritian Prime Minister Pravind Kumar Jugnauth announced that Mauritius would implement reforms in the financial sector as well as the business sector: To better comply with the BEPS Inclusive Framework, the prime minister declared that the Mauritian government would abolish the GBC2 license along with the Deemed Foreign Tax Credit, DFTC.

Pursuant to these announcements, the National Assembly passed the Finance (Miscellaneous Provisions) Act of 2018 on the 31st of July 2018.

The Act holds several provisions, most of which aim to implement the measures (opens in a new tab) the prime minister announced in his speech.

The new tax regime in Mauritius

Today, things are a little different. Aside from the abolishment of the GBC2 category and the DFTC, GBC1 has changed into a Global Business License.

Also, a new business category has been created: Authorized Company.

Let’s take a closer look at those two new categories, starting with GBLs.

Global Business License (GBL)

GBLs are very similar to their predecessor, GBC1 Companies.

To begin with, GBL’s are issued to companies that reside within Mauritius yet are owned or controlled by a foreigner and wish to conduct most of their business outside of Mauritius.

Also, just as GBC1 companies were expected to follow numerous requirements, a GBL company in Mauritius is required to abide by a few restrictions:

  1. This is called the enhanced substance requirement. The idea is that even though Global Business License holders conduct most of their business internationally, they are required to operate mostly from Mauritius, where they have to situate the majority of their income-generating activities, which prevents large corporations from profit shifting. This means that companies holding a Global Business License not only have to hire qualified personal, directly or indirectly, from Mauritius, but they also need to ensure that their expenditures within Mauritius are commensurate with their level of activities (opens in a new tab).
  2. In addition to operating from Mauritius, a GBL company in Mauritius is required to be both managed and controlled from Mauritius, and the administration of these companies will be carried out by a management company.

It is the FSC’s responsibility to ensure that GBL holders are complying with the above provisions.


The FSC has to ensure that GBL holders have hired directly or indirectly a reasonable number of employees, all of whom have the necessary qualifications to carry out the company’s core activities.

The minimum expenditure:

The FSC sets the minimum expenditure expected of each GBL holder in accordance with their level of activity.

Now, when assessing the management and control of a GBL company in Mauritius, which is the second provision laid out above, the FSC considers the following factors:

  • Whether the GBL holder has a minimum of two directors, both of whom reside in Mauritius and are qualified enough to exercise independence of mind and judgment.
  • Whether the GBL holder keeps its principal bank account in Mauritius.
  • Whether the GBL holder keeps at its registered office in Mauritius its accounting records and maintains them there
  • Whether the GBL holder prepares its statutory financial statements in Mauritius and has them audited there.
  • When conducting meetings for directors, whether the GBL holder will provide for said meeting a minimum of two directors from Mauritius.

Aside from the above requirements, any company applying for a GBL would do well to meet at least one of the following guidelines:

  • The business should have its office premises in Mauritius
  • The business should employ at least one Mauritian resident on a full-time basis and have said resident or residents work at the administrative/technical level.
  • The business’s constitution should contain a clause that specifies that all disputes arising out of the constitution will be addressed and resolved through arbitration in Mauritius
  • The business has or is expected to have by the following year assets that are valued at least at $100,000 in Mauritius. It should be noted that these assets cannot include cash held in a bank account and any shares held in another business carrying a GBL
  • The business has its shares listed on a securities exchange, one that is licensed by the FSC.
  • The business has an annual expenditure in Mauritius that is in line with what can be expected of a similar business controlled and managed from Mauritius.

It should be clear that some of the above guidelines are automatically satisfied by any company that meets the mandatory requirements mentioned earlier.

All that said, Mauritius companies holding a Global Business License are also different from GBC1 companies in a few main ways.

The first main difference is that the Deemed Foreign Tax Credit, DFTC, has been abolished, which means that GBLs aren’t entitled to an 80% tax credit.

Consequently, GBLs are taxed at a flat rate of 15%, just like any other Mauritian company.

Another difference revolves around a partial exemption regime, where a GBL company in Mauritius is entitled to an income tax exemption of 80%.

However, to qualify for this exemption, the company has to meet the enhanced substance requirements, and the income in question has to have come from one of the following sources:

Foreign source dividend:

  • This category of income can enjoy the tax exemption so long as it hasn’t already been used as a deduction in the country of source.
  • Foreign source interest income.
  • Profit attributable to a permanent establishment in a foreign country

Income derived by these activities:

  • A collective investment scheme (CIS), closed-end fund, CIS manager, CIS administrator, investment adviser, and asset manager. According to the Financial Services Act, any company performing these activities needs to receive the proper license and accreditations from the FSC.
  • Income derived by companies that provide ship and aircraft leasing.

It is important to point out that companies that claim the aforementioned tax exemption are not allowed to benefit from Mauritius’s network of Double Taxation Treaties, DTTs.

This means that any company that claims partial exemption cannot receive tax credits for its foreign taxes.

Authorised companies

The other new category of business in Mauritius is the Authorised Company. The Authorised Company structure was created to replace the GBC2 license. For one thing, an Authorised Company is a business entity that neither resides nor operates in Mauritius.

Additionally, they are owned and controlled by non-Mauritian citizens.

As a result, these Mauritius companies are treated as non-residents, which means that while they aren’t taxed by the Mauritian government, they are ineligible for the benefits provided by the DTTs.

Over and above, Authorised Companies need to have a registered agent in Mauritius, and this registered agent has to be a management company.

Authorized Companies need to make two filings every year: They need to file a financial summary with the FSC, and they need to file the Company Tax Return with the Mauritius Revenue Authority, MRA (opens in a new tab) for short.

So, even though Authorised Companies are tax-exempt, they are required to file their annual returns with the Tax Authority.

It is important to point out that Authorised Companies are barred from carrying out the following activities:

  • Banking
  • Financial Services
  • Holding or managing a collective investment fund or scheme as a professional functionary
  • Providing trusteeship services
  • Providing registered office facilities, directorship services, secretarial services, nominee services, and any other services for corporations
  • any activity that is determined by the FSC to be injurious to the pristine reputation of Mauritius as a center for financial services.

Under the Authorised Company regime, the fees for the new applications are the following:

  • A processing fee which amounts to $150 USD
  • An annual fee which amounts to $350 USD
Company Mauritus written on white background, in the middle the mauritius flag in the background to the skyline of Mauritius, under it, in black letters written GBL (GBC and GBC2)

Transitioning into the new regime

Any company that applies for registration today will have to either apply for a GBL or apply as an Authorised Company. However, what about businesses that were already registered as GBC1 or GBC2 companies in Mauritius before the Finance Act 2018 passed?

Global Business Category 1 companies

Any company that received its GBC1 license on or before the 16th of October, 2017 will be grandfathered until June 30, 2021. In other words, these entities will stay governed by the provisions set out in the Financial Services Act 2007, giving them all the benefits enjoyed by GBC1 companies. Once their time has elapsed, these companies will become GBL holders instead. Conversely, any company that received its GBC1 license after the 16th of October, 2017 will be grandfathered until December 21, 2018. This means that these entities have already become GBL holders.

Global Business Category 2 companies

Similar to what was said above, any GBC2 license given out on or before the 16th of October, 2017 will be grandfathered until June 30, 2021. But, once this date arrives, GBC2 companies will have two main choices: Either they can apply for a Global Business License or they can apply as an Authorised Company. Their third option is to dissolve the company. And, any GBC2 license given out after the 16th of October, 2017 will be grandfathered until December 31, 2018.

This means that these companies have already become Authorised Companies, have applied for and received GBL, or have been dissolved.

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Protected cells

One more thing that we should talk about is the concept of protected cell companies.

Thanks to the Protected Cell Companies Act 1999, a GBL company in Mauritius can structure itself as a Protected Cell Company, also known as a PCC.

A PCC is a legal entity that may be segregated into different cells, where each cell has its own assets and liabilities, and these assets and liabilities are separate from those of other cells.

This option is ideal for companies that hold a lot of assets or operate in the finance sector as it simplifies the administration of the said company and reduces its operating costs.

For instance, if any single cell becomes too indebted to a creditor, the creditor cannot go after the assets of the other cells as recompense. This insulates each cell and protects it against contagion.

Black written letters saying GBL company Mauritius, with the skyline of mauritius and the Mauritius Flag

Questions & Answer

Differences Between GBC 1 and GBC 2

Both do not exist anymore. GBC 1 has changed to GBL and GBC2 has been abolished.

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