What is a domestic company?
A domestic company is defined as a company incorporated under the laws of Mauritius and which can be either limited by shares, guarantee or both. A domestic company requires either that the majority of its shareholdings be held by a citizen of Mauritius or that the majority of its business be conducted in Mauritius. The domestic company is governed by the Mauritius Companies Act 2001.
A domestic company can conduct various activities such as trading, consultancy services, investment holding, and property holding (IRS) amongst others. The activities of the domestic company can be conducted with local as well as non-local residents of Mauritius.
A domestic company should have at least one resident director at the time of incorporation.
A minimum of 1 shareholder is required for the setting up of the domestic company. The shareholder can either be an individual or a corporate body.
A domestic company may be incorporated by the Registrar of Companies within 3 working days once all documents have been presented. Depending on the nature of the activity, a specific authorization (licence) may be required.
Proper due diligence should be conducted and KYC documents received for all directors, shareholders, beneficial owners and signatories. For an individual, these documents consist of:
- Certified copies of the passport (updated);
- Original or certified copy of a proof of address not older than 3 months;
- Curriculum vitae, and
- A reference letter (dated no more than six months) from a reputable bank having known the person for at least two years.
For a corporate shareholder, the documents to be submitted are the Certificate of Incorporation, Constitution (if any), Directors’ and Shareholders’ Register and most recent Financial Statements.
A domestic company is liable to Mauritian income tax at the rate of 15%. A partial exemption of 80% is available on the following specified income:
- Foreign source dividends derived by the company;
- Profits attributable to a foreign permanent establishment;
- Interest derived by a company;
- Income derived from ship/aircraft leasing;
- Income from the provision of specified financial services approved by the FSC;
- Reinsurance / Reinsurance brokering activities;
- Leasing and provision of international fibre capacity, and
- Sale, financing, arrangement, asset management of aircraft and its spare parts and aviation advisory services related thereto.
A domestic company which is involved in international trading activities shall be liable to income tax at a flat rate of 3%.
A domestic company must submit an annual tax return to the Mauritius Revenue Authority.
VAT Registration is mandatory for a domestic company having an annual turnover exceedingMUR 6 million.
A domestic company needs to pay a Corporate Social Responsibility tax of 2% of its book profit towards programmes that contribute to the social and environmental development of the country.
A domestic company having gross income exceeding MUR 500 million in an accounting year or where the company forms part of a group of companies where the gross income of the group exceeds MUR 500 million, shall be liable to a Corporate Levy at the rate of:
- 0.3% of the annual gross income for insurance companies, financial institutions, service providers and property holding companies, and
- 0.1% of the annual gross income for other companies.
The Corporate Levy shall not apply to a company which operates in the tourism sector.
Accounting and Audit
A financial summary or statement, duly signed by at least 1 director has to be filed with the Registrar of Companies.
Only an annual financial summary is required if the company’s turnover is less than MUR 50 million. Should the annual turnover exceed MUR 50 million, the company must submit audited accounts.
For more information and advice, please contact us.