Global Business Company Category 1 (GBC 1)
Incorporated under the Mauritius Companies Act 2001 GBC 1 companies, those holding a category 1 Global Business License, are treated as residents of Mauritius for the purpose of taxation. Therefore unlike GBC 2 companies GBC 1 entities are liable to pay taxes on their earnings. As a resident of Mauritius they are entitled to the benefits of the extensive tax treaties. A GBC1 may be locally incorporated or may be registered as a branch of a foreign company. The business of a GBC1 Company must be conducted in foreign currency and GBC1 companies cannot engage in business in Mauritius.
Features of GBC 1
- The minimum paidup capital is US$1 and the usual authorized share capital is US$ 1 million with all of the shares having a par value. The minimum issued share capital is 2 shares of par value. While the USD is the standard currency, any currency is permitted except Mauritius Rupees.
- Registered shares, preference shares, redeemable shares and shares with or without voting rights are permitted.
- Requires minimum of one Director who must be a natural person, and access to treaty benefits need at least two local directors.
- A minimum of one shareholder is required, who can be of any nationality and need not be resident in Mauritius. Corporate shareholders are permitted.
- A qualified resident company secretary must be appointed.
- Accounting records and statutory documents including register of members, debenture holders and officers must be kept at a registered office in Mauritius.
- A qualified registered agent must be appointed.
- Required to file audited annual accounts within six month of the financial year end.
- Meeting of directors can be held anywhere but must be held in Mauritius for access to benefits of treaties.
- Meeting of shareholders must be held in Mauritius and Proxies are allowed.
Merits of GBC 1
- GBC 1 companies are subject to 15% tax on income, but with tax credits the effective tax rate drops to as low as 3%.
- Neither capital gains nor withholding taxes are levied.
- Change in domicile is permitted.
- Subject to possession of a Tax Residency Certificate, GBC 1 companies have access to benefits of over 24 DTAs, some of the important partner countries include China, India, Luxembourg and Thailand.
- No limit on the carry forward of tax losses.
- Royalties ,interests and service fees payable to foreign affiliates are allowed as expenses provided they are backed by genuine records.
- Interests paid on deposits in Banks are tax exempt.
- Dividends paid by a GBC1 are tax exempt.
- No stamp duties, registration duties or levies
- Expatriate staffs are allowed and there exists a concessionary personal income tax rate for expatriate staff
Limitations of GBC 1
- A license must be obtained to undertake banking or insurance business or solicit funds from the public
- Beneficial owners must be disclosed to that authorities but it is not made available to public
- GBC1 companies cannot engage in business in Mauritius