Why Mauritius for your investment holding company?
Mauritius has established itself as one of the leading jurisdictions for international holding structures, particularly for investment into Africa and Asia. The combination of attractive taxation, an extensive network of tax treaties and a solid regulatory framework (based on the Companies Act 2001 and the Financial Services Act 2007) makes Mauritius a preferred choice for institutional investors, private equity funds and international entrepreneurs.
Tax advantages of a Mauritian holding company
| Tax advantage | Detail |
|---|---|
| Taxation of foreign income (GBC) | ~3% effective (80% exemption via deemed FTC) |
| Tax on capital gains on disposal | 0% (no exit taxation) |
| Withholding tax — outgoing dividends | 0% |
| Withholding tax — outgoing interest | 0% |
| Withholding tax — outgoing royalties | 0% |
| Inheritance tax | 0% |
| Tax treaties | 45 DTAs in force (MRA, 2026) covering Africa, Asia, Europe |
| Exchange controls | No restrictions on capital movements |
Decisive advantage: the total absence of tax on capital gains allows shareholdings to be disposed of without taxation at the holding company level. Combined with the absence of withholding tax on distributions, this tax treatment ensures efficient capital flows between the levels of the structure.
Types of holding companies in Mauritius
Pure holding company (investment holding)
Holding of interests in subsidiary companies with no operating activity of its own. Receipt of dividends, interest and capital gains on disposal. The most common structure for centralising international shareholdings.
Mixed holding company (trading and holding)
Combination of holding interests with operating activities: trading, consulting, management services. Charging management fees to subsidiaries and centralising functions (treasury, IT, HR).
Real estate holding company
Holding of international real estate assets via subsidiary companies. Optimisation of taxation on rental income and capital gains on disposal through DTAs.
Intellectual property holding company
Holding and managing patents, trademarks, copyrights and licences. Receipt of royalties with 0% outgoing withholding tax from Mauritius.
Legal structure: GBC or AC for your holding company?
In the vast majority of cases, the GBC is recommended for holding companies because access to tax treaties is one of the main reasons for locating a holding company in Mauritius. The AC can be suitable for simple holding companies with no need for DTAs.
| Criterion | GBC Holding | AC Holding |
|---|---|---|
| Access to DTAs | Yes — essential for reducing withholding tax | No |
| Tax Residence Certificate | Yes — necessary to apply treaty rates | No |
| Taxation | ~3% effective | 0% |
| Substance required | 2 resident directors, local administration | Registered agent only |
| Audit | Mandatory (licensed auditor) | Reduced |
| Annual cost | USD 4,000 – 8,000+ | USD 1,500 – 3,000+ |
| Recommendation | Holding companies with subsidiaries in DTA countries | Simple holding companies with no need for DTAs |
Optimising withholding tax through DTAs
One of the main advantages of the GBC holding company is the reduction of withholding tax on dividends, interest and royalties from subsidiaries thanks to Mauritius's network of tax treaties. Without a treaty, source countries apply their domestic rates, often between 20% and 30%. DTAs significantly reduce these rates.
| Source country | Dividends (DTA rate) | Interest (DTA rate) | Royalties (DTA rate) |
|---|---|---|---|
| India | 5-15% | 7.5% | 15% |
| South Africa | 5-15% | 0-10% | 5% |
| China | 5% | 10% | 10% |
| Singapore | 0% | 0% | 5% |
| France | 5-15% | 0% | 0% |
| United Kingdom | 10-15% | 0% | 15% |
| Kenya | 5% | 10% | 10% |
| Madagascar | 10% | 10% | 5% |
The rates shown are indicative and may vary depending on the specific conditions of each treaty (participation thresholds, limitation-of-benefits clauses). Some treaties have been amended by the OECD's Multilateral Convention (MLI). Consult a tax advisor for the rates applicable to your situation.
Financial flows of a Mauritian holding company
The Mauritian holding company optimises the group's financial flows through an efficient three-level scheme:
-
Incoming flows: dividends from subsidiaries
Subsidiaries distribute dividends to the holding company in Mauritius, benefiting from reduced withholding tax rates provided under tax treaties (5% to 15% depending on the country, versus 20-30% without a treaty).
-
Taxation in Mauritius
Foreign-source income is taxed at approximately 3% effective after application of the 80% exemption (deemed Foreign Tax Credit). Capital gains on disposal of shareholdings are not taxed (0%).
-
Outgoing flows: distribution to shareholders
The holding company distributes profits to its shareholders without withholding tax (0%) and without tax on capital gains in the event of disposal of the holding company's shares.
Mauritius as a platform to Africa
Mauritius has become the leading investment platform into Africa, channelling billions of dollars of investment onto the continent. The advantages for investment holding companies in Africa are numerous. The holding company can also be combined with Mauritian trusts for optimal wealth planning, or serve as a platform for investment funds in Mauritius:
- Tax treaties with numerous African countries: South Africa, Botswana, Kenya, Madagascar, Mozambique, Namibia, Uganda, Rwanda, Senegal, Zambia, Zimbabwe, etc.
- Bilateral Investment Treaties (BITs) offering protection against expropriation and access to international arbitration (ICSID, UNCITRAL)
- Member of SADC and COMESA: preferential access to regional African markets
- Favourable time zone (GMT+4): overlapping with Africa, Europe and Asia
- Bilingual workforce (English and French), familiar with both French-speaking and English-speaking African markets
Group treasury
The Mauritian holding company can also serve as a treasury centre for the group, centralising financing functions:
- Intragroup loans: the holding company grants loans to subsidiaries, receiving interest taxed at ~3% effective. DTAs reduce the withholding tax on interest in the subsidiary's country
- Cash pooling: centralisation of the group's cash surpluses for optimised management
- Acquisition financing: the holding company raises financing for the acquisition of new shareholdings
- Currency management: multi-currency accounts (USD, EUR, GBP, ZAR) allowing exchange rate risk to be managed
Economic substance for holding companies
Substance requirements for a GBC holding company must be proportionate to its activity. The FSC assesses substance on a case-by-case basis:
- Two resident directors in Mauritius at minimum, with relevant expertise in investment management
- Board meetings held in Mauritius, with documentation of investment and divestment decisions
- Local administration: accounting, records and correspondence managed from Mauritius
- Operational bank account in Mauritius with genuine transactions
- Local expenditure proportionate to income and assets managed
The management company provides the resident directors, administration and compliance support. To learn more, see our guide to registered office and substance.
Costs of a holding company in Mauritius
| Item | GBC Holding (USD/year) | AC Holding (USD/year) |
|---|---|---|
| Management company and administration | 2,000 – 4,000 | 800 – 1,500 |
| FSC licence | 500 – 1,500 | 250 – 500 |
| Annual audit | 1,500 – 3,000 | 500 – 1,000 |
| Resident directors | Included or 500 – 1,500 | N/A |
| Registered office | 500 – 1,500 | 300 – 800 |
| Total per year | 4,000 – 8,000+ | 1,500 – 3,000+ |
For a detailed budget forecast, see our guide to formation costs.
Points of caution
- CFC rules: check that the holding company does not trigger Controlled Foreign Company (CFC) rules in the jurisdiction of residence of the ultimate shareholder. Several European countries apply CFC rules that can tax the holding company's income at the shareholder level
- Principal Purpose Test (PPT): modern tax treaties (as amended by the MLI) include anti-abuse clauses. The holding company must have genuine substance and a commercial purpose beyond the tax advantage
- Transfer pricing: intragroup transactions (management fees, loans, royalties) must comply with the arm's length principle. Mauritius has adopted OECD guidelines on transfer pricing
- Evolution of treaties: some treaties are subject to renegotiation. Follow developments, particularly the treaties with India (renegotiated in 2016) and South Africa
- BEPS and MLI: Mauritius has signed the OECD's Multilateral Convention (MLI), incorporating anti-BEPS measures that may alter the application of certain bilateral treaties
The information presented is provided for guidance only. Structuring an international holding company requires an in-depth tax and legal analysis taking into account all jurisdictions involved. Consult a qualified professional.