Mauritius is located in the Indian Ocean, east of Madagascar, near the French overseas territory of Reunion, and has an Anglo-French colonial past.
The official language of this country of almost 1.4 million inhabitants is English. Mauritius consists of the main island of 2000 km² and several small islands.
Among African countries, Mauritius occupies a leading position in many respects. The country has hardly any corruption, the inflation in Mauritian rupees is low (1 Euro = 40 MUR) and the population is the richest in Africa.
In the Freedom House Index of Freedom, Mauritius ranks 15th in the world and shares with Seychelles the highest human development in Africa (value 0.781 out of 1).
The multicultural island is known for its excellent links with India, since a large part of the population comes from there and Hinduism is the largest religious group, with about 48%. But also Christians (approx. 33%) and Muslims (approx. 17%) have a presence on an island that, because of its size and its mountainous regions, offers not only a warm and tropical climate.
But why is Mauritius a great discovery?
Well, in addition to offering excellent air connections with Europe, it stands out for having a relatively simple immigration process, combined with an attractive tax system that is quite interesting, and not only for online entrepreneurs.
Oh, and an important fact for home schoolers: school education is compulsory only in primary school. Moreover, this does not apply to foreigners.
The Mauritian tax system
Mauritius is the Malta of the Indian Ocean, at least as far as the tax system is concerned.
As an English colony, Mauritius has a non-dom tax system that is fixed on money brought into the country (remittance base). The system in Mauritius is similar to that of Malta.
Non-Dom means “not domiciled” and describes a status in English common law that is not known in Roman law.
A person’s domicile is usually in the country where his father came from and where he has lived most of his life. Usually, but not always, this is the country of nationality.
In general, you do not lose your initial domicile until you renounce your nationality or after 17 years have passed without stepping foot in the country where you were domiciled.
Any person who is not domiciled, but who resides in a country with a non-dom system, can benefit from a special form of taxation, based on the money transferred or received (remittance base).
Under this system, foreign income is exempt from tax as long as it is not used in the country.
Contrary to what is generally believed, this does not only concern transfers to the country, but also, in general, any money either in cash or in any other form (withdrawals or credit card payments) used or deposited in the country.
Consequently, non-dom are never completely exempt from taxes (except in the Cyprus non-dom program, which works differently). They will always have to pay taxes on the money introduced to cover the cost of living, a cost which must be credible.
Be that as it may, foreign income or investment used for travel abroad is not subject to tax.
Tax residence in Mauritius is based on the 183-day rule. Spending 270 days during 3 years is enough to obtain a tax certificate. This will be necessary, for example, to be able to benefit from the excellent network of double taxation agreements in Mauritius, which can bring great advantages, especially to investors.
Mauritius is particularly interesting for investors and traders of all kinds because of its unconditional tax exemption on capital gains.
Cryptocurrencies are legal on the island, but largely unregulated, which offers even better conditions.
Mauritius is particularly known for its double taxation agreement with India, but also for its other 45 IDCs, which is not common in a low tax country.
- The double taxation agreements with Germany, France and Sweden reduce taxes at source by about 15% (shares) and 5% (shares in companies above 10%).
- The income tax on national income and foreign income used or brought into the country is a fixed tax of 15%.
- The social security contribution of the employees is quite bearable: the employee puts in 4% of the gross salary and the employer puts in 8.5%.
- The tax-free amount depends on the number of family members and is approximately 7,000 euros (73.676,49 NOK – 70.659,29 SEK – 52.072,85 DKK – 8.580,24 USD – 10.973,70 CAD) for a single person
- And 131.565,16 NOK (126.177,30 SEK – 92.987,23 DKK – 12,500 euros – 15.321,86 USD – 19.595,90) for a family of four. There is no inheritance tax.
Mauritius as a paradise for entrepreneurs
Domestic dividends are not taxed either, which makes it very attractive to set up a company in Mauritius. Here a distinction must be made between the two types of company GBC1 and GBC2.
The Global Business Company 2 is a classic offshore company, which cannot do business in Mauritius. Tax free, no obligation to file accounts and anonymous. It combines the advantages of the typical offshore jurisdiction with some country-specific prerogatives.
Mauritius enjoys a higher reputation than other comparable jurisdictions and is on the OECD white list. Mauritius, for example, is one of the few potentially tax-free countries that Amazon approves for sale via FBA in Europe.
Mauritius is also very interesting for entrepreneurs who need to be able to receive bank transfers in a company’s bank account located in the same country as the company’s headquarters.
In many offshore jurisdictions, it is almost impossible to open a bank account in a local bank, but in Mauritius, it is usually quite easy to open even remotely a bank account.
Furthermore, Mauritius is one of the few non-European countries with an IBAN number, which makes payment operations with Europe quite simple
The most popular banks for offshore companies are Bank One and ABC-Bank. Also recommended are the South African Standard Bank and the Standard Chartered Bank, which operates worldwide.
Whoever emigrates to Mauritius and conducts business from there or is interested in an internationally recognized low tax company, also to issue invoices, should turn to the GBC1.
The Global Business Company 1 needs two directors resident in Mauritius (no matter their nationality) in order to take advantage of the excellent double taxation agreements, which makes it an interesting investment company.
The corporate tax for income from abroad is only 3%. Only domestic income is taxed at 15%.
Since GBC1 dividend distributions to Mauritian resident shareholders are tax exempt (there is also no withholding tax on dividends in the case of non-residents), the total tax burden for entrepreneurs is a ridiculous 3%.
Private foreign investments by Mauritian residents would be tax free thanks to non-dom taxation (as long as no money is brought into the country).
It is also worth mentioning that Mauritius offers excellent opportunities to obtain a relatively inexpensive license to provide financial services or operate cryptocurrency. The set-up costs, including the license, here are just 15,000 euros (157.878,19 NOK – 151.412,76 SEK – 111.584,68 DKK – 18.386,24 USD – 23.515,08 CAD).
How to immigrate to Mauritius – about the different immigration options in Mauritius
In many countries the living conditions and tax conditions seem perfect, but then, when we look at the immigration laws we see that everything stays there. This is not the case in Mauritius.
Mauritius is interested in attracting qualified immigrants to the country and offers roughly four different immigration options. Citizens of almost all nations (except some countries) can enter the country for the first time without a visa and stay for 2 or 3 months.
- Employees obtain a residence permit in Mauritius as soon as they can prove that they have a job offer for the equivalent of 2,000 euros (21.050,42 NOK – 20.188,37 SEK – 14.877,96 DKK – 2.452,10 USD – 3.134,06 CAD) of monthly income.
- For computer professionals, the threshold is halved to 1,000 euros (10.532,08 NOK – 10.090,28 SEK – 7.438,98 DKK – 1.225,75 USD – 1.567,67 CAD).
- Employers must initially invest $35,000 (300.536,60 NOK – 288.229,02 SEK – 212.412,38 DKK – 28.553,95 euros – 44.763,25 CAD) in their GBC1, earning at least $20,000 (171.735,20 NOK – 164.702,30 SEK – 121.378,50 DKK – 16.316,54 euros – 25.579,00 CAD) during the first two years and $40,000 (343.470,40 NOK – 329.404,60 SEK – 242.757,00 DKK – 32.633,08 euros – 51.158,00 CAD) from the third year onwards to obtain a permanent residence permit.
- An investor’s visa will be granted from an investment of 10.000$ (85.867,60 NOK – 82.351,15 SEK – 60.689,25 DKK – 8.158,27 euros – 12.789,50 CAD) . Benefits of approximately 75.000$ (644.007,00 NOK – 617.633,62 SEK – 455.169,38 DKK – 61.187,03 euros – 95.921,25 CAD) must be obtained in the first year and approximately 300.000$ (2.576.028,00 NOK – 2.470.534,50 SEK – 1.820.677,50 DKK – 244.748,13 euros – 383.685,00 CAD) in the following two years.
- Finally, the people older than 50 years can obtain a visa of retired if they introduce at least 40.000$ (343.470,40 NOK – 329.404,60 SEK – 242.757,00 DKK – 32.633,08 euros – 51.158,00 CAD) per year in Mauritius during a period of 3 years, make a deposit in a local bank of $15.000 (157.878,19 NOK – 151.412,76 SEK – 111.584,68 DKK – 18.386,24 USD – 23.515,08 CAD) and pay a rate of $2.500( 21.466,90 NOK – 20.587,79 SEK – 15.172,31 DKK – 2.039,57 euros – 3.197,38 CAD).
In all four cases, after three years of residence of at least three months, Mauritius grants a permanent residence permit, which must be formally renewed every 10 years.
After seven years you can obtain Mauritian citizenship, provided you have lived in Mauritius for at least five years. You must have spent in Mauritius the 12 months prior to the application for citizenship.
Among 145 visa-free countries, Mauritius ranks 28th in the world and offers greater freedom of movement than typical Caribbean Economic Citizenship programs.
Since Mauritius accepts dual citizenship, it is a good complement to our main passport, as it allows free movement around Africa by granting visa-free access to several southern African countries that are usually difficult to reach.
For whom is the residence in Mauritius interesting?
So far most entrepreneurs have overlooked Mauritius. Mauritius does not offer land taxes, but an attractive non-dom tax system in which entrepreneurs with foreign income pay only 3% tax and get in return a company of good reputation, recognized almost worldwide.
The initial requirements to register the company are somewhat high, but depending on the case it is still interesting, especially considering the subsequent tax savings.
Moreover, with a non-dom system similar to that of Malta, Mauritian foreign investments remain tax-free. In the end, having a company in Mauritius it is not necessary to introduce foreign income and you can live off the dividends of the local company (local dividends which, remember, are tax free).
Thanks to its excellent double taxation agreements, Mauritius is largely the preferred residence of entrepreneurs and investors with business relations with India.
But even if you don’t do business with India, Global Business Company 1 can meet the needs of virtually any entrepreneur. With a total tax burden of 3% it allows us to meet all the requirements for recognition of our invoices and opening of bank accounts anywhere in the world.
In the end, Mauritius is one of the most attractive countries within the non-dom. Undoubtedly what makes it more interesting for entrepreneurs are its corporate taxes on foreign income with a domestic company of 3% coupled with the freedom of taxation on dividends (on the profits of such domestic company). For traders and investors the complete tax exemption on capital gains.
Mauritius offers an extended time visa, especially for people who work remotely
Mauritius joins the list of places that offer a special visa that can be taken advantage of by people working remotely. The name of this visa program is “Premium Travel Visa” and it will be valid for a period of one year. From an official communiqué shared by the Mauritius Office of Economic Development, they explained that the program is “to receive travelers who seek to prolong their feeling of well-being that comes from the turquoise color of the sea with the soft sand beaches”. All this, with the necessary precautions regarding the COVID-19.
The visa is available for people who are going to visit, retirees, parents who are studying on the island and professionals who want to work remotely from there. The maximum period for which they can stay is one year and, in the case of professionals, they can travel with their family if they wish. Of course, in order to apply, there are certain requirements that must be met and the application will be made online. According to the Economic Development Office, a page will soon be available through which all applications can be completed and the necessary documentation uploaded.
In order to be eligible for an extended stay visa, it is necessary to have proof of plans to stay on the island for an extended period of time. In the same way, it is necessary to have travel and health insurance for the duration of the stay. Similarly, the following conditions must be met:
- Applicants must not enter the Mauritian labour market;
- the main source of income must come from outside the island;
- present documentation that serves as evidence at the time of application, such as the reason for the visit, where you will be staying, what company you work for, among others;
- basic immigration requirements.