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What is an Offshore centre
Incentives of the Mauritian Offshore sector
Evolution of Offshore Companies registration
Double Taxation Avoidance Treaty
Impact on the Economy
Since 1989 the different governments in place have tried to develop
Mauritius as an Off-Shore Centre with some degree of success.
Currently, the Off-Shore centre is attracting considerable investment
which is channelled to India. There exists a highly advantageous
Double-Tax Avoidance Treaty between that country and Mauritius.
In 1989, the Banking Act of 1988 was amended to provide for the establishment of Off Shore Banking facilities. In 1990, the Companies Act of 1984 was in turn amended to enable the setting up and the operation of offshore companies.
To provide further impetus to the emerging offshore sector, the
Mauritius Offshore Business Activities (M.O.B.A.) Act and the
Offshore Trusts Act were proclaimed in 1992. Later in the same
year the M.O.B.A. Authority became operational.
Offshore centres are set up by means of appropriate legislation in a given country (the host country) in view of encouraging foreign or local financial institutions, companies or trusts in establishing resident corporate entities for the purpose of investing funds in countries other than the host country.
The corporate entities can be banks, funds management organisations or insurance companies amongst others.
It is reckoned that to be a successful offshore centre, political stability, respectability and accessibility of the centre are of paramount importance.
Political stability is a prime consideration of potential investors who must be assured that the funds invested are secure in the jurisdiction under which the centre operates.
Respectability is important for rumours of money laundering and scandals are bound to affect negatively the reputation of the centre. Yet it should operate with a minimum of regulations. A delicate balance must be achieved between the regulations and laws required to ensure that a centre remains free of money laundering and the confidentiality necessary for offshore business activities.
The accessibility of the centre through rapid and efficient movement of information and clients is essential. Offshore operators must be in constant touch with international financial markets throughout the world by means of modern telecommunications.
Accessibility of the centre by air travel to and from major world financial centres is important in spite of the fact that most offshore transactions are carried out through telecommunications.
Finally, an efficient domestic banking system and the presence
of local legal and accounting expertise are indispensable for
the continued success of the offshore centre.
The Mauritian Offshore sector offers a number of incentives which
are as follows:
Evolution of Offshore Companies Registration:
|Company Type||June 1995||Sep 1995||Dec 1995||Apr 1996|
|Offshore Funds Management||45||52||61||78|
Double Taxation Avoidance Treaty:
Whenever funds are invested from one country to the other, the
returns on investment are liable to taxation in both countries,
thus leading to double taxation. The aim of double taxation avoidance
treaties is to eliminate this double taxation between the two
countries signatory of the treaty without creating loopholes which
permit tax evasion. In doing so, the treaty promotes the movement
of capital and persons as well as boosting trade between the two
Mauritius has signed and ratified double taxation avoidance treaties
with a number of different countries. The following table is a
summary of the different treaties signed and ratified by Mauritius.
|Signed/Ratified||Portfolio/ Other||Banks / Other|
|1978/1990||Germany||5%(a) / 15%||Exempt/ ( c)||15%|
|1981/1982||France||5%(b) / 15%||Exempt/ ( c)||15%|
|1981/1987||Great Britain||10%(b) / 15%||Exempt/ ( c)||15%|
|1983/1985||India||5%(b) / 15%||Exempt/ ( c)||15%|
|1992/1992||Zimbabwe||10%(a) / 20%||Exempt/ 10%||15%|
|1992/1992||Sweden||5%(b) / 15%||Exempt/ 15%||15%|
|1993/1993||Malaysia||5%(b) / 10%||? / 10%||15%|
|1994/1994||Swaziland||7.5% / 7.5%||5% / 5%||7.50%|
|1990/1995||Italy||5%(a) / 15%||Exempt/ ( c)||15%|
|1994/1995||China||5% / 5%||10% / 10%||10%|
|1994/*||South Africa||5%(a) / 15%||Exempt/ 10%||5%|
|1994/*||Pakistan||10% / 10%||10% / 10%||12.50%|
|1995/*||Madagascar||5%(a) / 10%||10% / 10%||5%|
|1995/*||Luxembourg||5%(b) / 10%||Exempt/ Nil||Nil|
|1995/*||Namibia||5%(a) / 10%||Exempt/ 5%||5%|
Source : Ministry Of Finance ( May 1995)
Double Taxation Avoidance Treaty with Indonesia
Impact on the Economy:
The contribution of the Offshore sector to the local economy is difficult to quantify precisely. The information available indicates that around 500 jobs have been created in that sector and it also appears that direct exchange earnings are high enough to cover the supervision costs of the MOBA Authority.
Indirect benefits include added business for professionals like accountants, lawyers and fund managers who provide the necessary support for the setting up and running of offshore entities. The rental of office space, telecommunication charges and other miscellaneous local expenditures contribute to some measure to the economy.
The benefits of an offshore centre goes beyond the relatively
modest above mentioned advantages. An Offshore centre propels
Mauritius into the increasingly liberalised and globalised world
economic environment. Put differently, the offshore sector contributes
to a broadening of the international outlook of local economic
agents who will play a vital role in integrating Mauritius into
the increasingly liberal world economy. Perhaps, therein lies
the principal interest of having an offshore centre at least for
the time being.
The MOBA Authority is a governmental agency set up by the M.O.B.A. Act of 1992. It is the centre and the channel through which all governmental agencies correspond with offshore entities. It is also the agency that grants licenses, permits or authorizations that may be required to carry out any forms of offshore business activities. The inspection and filing of documents and any other inquiries are carried out by the said authority.
The authority is managed by a board of governors chaired by the Minister of Finance.
The vice-chairman is the Governor of the Central Bank.
The address of the Authority is: 1st floor , Deramann Tower , 30 Sir William Newton Street
Port Louis, Mauritius.
Telephone: (230) 211 0494 / 0143 / 0478
Fax : (230) 211 3398 / 212 9459
E-Mail : email@example.com
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Last Update: 14 September, 1999
Date on the Web: Thursday, January 22, 1998