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Mauritius' low-key 'tax haven'

author:Peach escapes

When it comes to Mauritius, the first thing that comes to mind is the beautiful scenery, the blue sky, the blue sea or the preferential tax system.

In addition to tourist attractions, Mauritius is actually a tax haven, and today we will unveil the mystery in detail.

Mauritius is an island nation in eastern Africa, located in the southwestern Indian Ocean, with its capital in Port Louis and its main languages being Mauritian Creole, French and English. English is the official language of the country, but the Mauritian Creole is popular. Mauritius is known as the "star and key in the Indian Ocean" and is known as the "Land of Paradise".

Advantages of Mauritius

Mauritius has the highest per capita income among developing countries in Africa and pursues a policy of neutrality, non-alignment and all-round openness to the outside world.

Mauritius's economy has maintained sustained and stable development for a long time, and the sugar industry, textile and garment export processing industry and tourism are the three pillar industries of Mauritius' tradition. The people's happiness index is high, and welfare policies such as free medical care, free education, unemployment benefits, and rice noodle price subsidies are implemented.

Mauritius was a full member of the WTO at the time of its creation and has preferential market access treatment with the EU and the US, which provides Opportunities for Chinese investors and traders to use Mauritius to enter the EU and US markets.

Mauritius is a member of COMESA and the Southern African Development Community and has fully equipped port facilities with a one-stop shop for free port services. There is great potential for access to African markets through Mauritius. Mauritius has a need to further strengthen infrastructure construction and develop tourism resources, and there are many business opportunities in the construction of ports, airports, railways and scenic areas.

All sectors in Mauritius are open to foreign investment, with 100% foreign ownership, no exchange controls, and no sectors and regions where foreign investment is prohibited. Mauritius has significant investment opportunities in financial services, information and communication technologies, software development, logistics and distribution, healthcare, environmental protection, marine aquaculture and other industries.

The feasibility of Chinese enterprises investing in Mauritius is reflected in:

(1) Convenient transportation. Mauritius has relatively developed transportation, good infrastructure, developed air transport, and has direct sea and air routes to Europe, Africa, Asia and Australia, which is convenient for the transportation of raw materials. Due to its advantageous geographical location, Mauritius will undoubtedly become a regional commodity distribution and transshipment center in Europe, Asia and Africa.

In addition, the mainland and Mauritius have achieved direct sea flights, providing opportunities for Chinese enterprises to invest in Mauritius. Mauritius is relatively scarce in raw materials, a large number of raw materials need to be imported from China, the opening of the route can reduce the cost of products.

(2) Strong radiation ability. Mauritius has convenient transport links and is also a member of comes with COMESA and SADC, and investing in Mauritius can make full use of Mauritius' advantages in these national and regional markets and enjoy certain preferential policies; At the same time, thanks to the Lomé Agreement, mauritian products can be exported to the EU market without quotas and tariffs; Due to the existence of the United States Africa Act, although there are quotas in the United States market, the current quotas given to African countries far exceed their existing production capacity.

(3) Preferential policies. The Agreement on The Encouragement and Reciprocal Protection of Investments between the Government of Mauritius and the Government of the Mainland provides protection and support for investment by mainland enterprises. The Agreement on the Avoidance of Double Taxation signed between the Mainland Government and the Government of Mauritius regulates double taxation and tax evasion in investment income of enterprises of both sides, and ensures the investment income of enterprises. In addition, 80% of Mauritius' imports are exempt from import duties.

(4) Environmental factors. From the perspective of the internal environment, the geographical location is relatively superior, the economy is relatively developed, and the political situation has always been relatively stable. Due to its special geographical location, Mauritius is a blend of Chinese, Indian, African and European cultures.

Judging from the external environment, Mauritius has good relations with its neighbors, Europe and the United States, maintains special friendly relations with India, the country of the main source of population, and has always developed very smoothly with China. Mauritius adheres to economic diplomacy and strives to strengthen relations with the International Monetary Fund, the World Bank and the European Union. Trading partners are mainly France, Britain, Germany, Italy and the United States. Mauritius is a member of the Lomé Agreement, so exports of its manufactured goods to the EU are duty-free and quota-free. Mauritius is also a member of the Southern African Community and the Commission on the Indian Ocean Rim.

The tax system in Mauritius

Although Mauritius has also adopted resident tax jurisdiction, the tax system is simple and the tax rate is low. The main taxes are income tax, value-added tax, payroll tax, social security tax, national savings fund, camping tax, land transfer tax, registration tax, lease tax and stamp duty.

A resident company is a company incorporated in Mauritius or with a management control centre in Mauritius. Mauritius is taxed at a corporate income tax rate of 15 per cent and companies operating offshore or incorporated in Mauritius but undertaking not to apply the Mauritius Tax Treaty are exempt from taxation.

Mauritius has a minimum tax payment system. When corporate income tax payable is less than 7.5% of carrying profits, the minimum tax payable is the smaller of 7.5% of book profits and 10% of the company's declared dividends.

Mauritius imposes a special tax on the banking sector:

(1) 10% of taxable income;

(2) 3.4% of the carrying profits;

(3) 1% of total revenue. The telecommunications industry is subject to a fixed tax based on 5% of book profits and 1.5% of turnover. Companies are required to pay a social responsibility fund of 2% of their taxable income.

Mauritius is not taxed on gains from shares held for more than 6 months. Profits from stocks held for less than 6 months are taxed as operating income. Profits from the sale of other assets are taxed. Dividend income derived from domestic sources obtained by resident companies is exempt from taxation, dividend income obtained by resident companies derived from overseas sources is taxed, and the overseas withholding tax has been subject to a limit credit (up to 12%) and the loss is transferred for 5 years, and the change of equity is stopped if more than 50%.

Mauritius has no provisions for transfer pricing, capital weakening, group filing and controlled foreign companies.

The basic VAT rate is 15%, the export rate is applicable to the 0 tax rate, and the tax-free items include basic food, medicine, education services, residential construction services, real estate transfers and some financial services. In addition, Mauritius imposes excise duties on the import of spirits, cars and petrol.

Mauritius also has camping tax, land transfer tax, registration tax, lease tax, stamp duty, payroll tax, social security tax and national savings fund.

Mauritius introduces a unilateral limit credit for offshore taxes, with a maximum credit of 80% of the Mauritian tax payable, i.e. a maximum of 12%, and a supplementary tax of 3%. No withholding tax is levied on dividend remittances and branch profits. External payments made by companies with a turnover of more than MUR 6 million are exempt from withholding tax.

In addition to Hong Kong, Singapore and island companies, which are well known overseas registrations, Mauritius can also be considered.

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