The Renewal of the Global Business Sector of Mauritius
Contributed by Abacus Seychelles Limited
09 May, 2018
The Renewal of the Global Business Sector of Mauritius.
05th July 2017 a date to be remembered in the Financial Services Sector. Mauritius signs the Multilateral Instrument (MLI). What are its implications? What do investors need to be aware of? How will it change the business environment in the Financial Services Sector?
The MLI was mandated in February 2015 by the G20 Finance Ministers and Central Bank Governors. The MLI offers to its member governments the possibility to close the gaps in existing international tax rules through the OECD/G20 BEPS Project into bilateral tax treaties worldwide.
Implications for Mauritius
Following the signature of the MLI Mauritius there are 23 tax treaties that would be reviewed and others as suggested by the Mauritian government will be subject to bilateral discussions to allow Mauritius to conform to the minimum requirements of the BEPS project.
What next for the Mauritian Financial Services?
The Mauritian Government is well aware of its implication and the importance of a reform to be made to the Financial Services Sector of the Island. The Executive Director at Harvard Law School Mr James Shipton is the architect of the new blueprint assisted by the Ministry of Financial Services, Good Governance and Institutional Reforms, The Financial Services Commission (FSC), the Association of Trust and Management Companies (ATMC), the Board of Investment (BOI), Bank of Mauritius, Global Finance Mauritius, Standard Chartered Bank, Mauritius Bankers Association and operators from the public and private sectors.
What can we expect in the future?
The First proposition has already been submitted to the OCDE and has been reviewed positively. The first proposition submitted regards the Global Business Licence 1 (GBC 1) type of companies. The GBC 1 type of licence may be subject to modifications to the application of deemed tax credit due to ring fencing.
The parties involved are also working the Global Business Licence 2 (GBC 2) type of company. No further communications have been communicated so far.
Due to requirements of BEPS the Mauritian entities will also need to have more substance in Mauritius. Substance is highly prioritised during this project and more information about the new requirements will be communicated to you.
How is AM ABACUS GROUP perceiving this new change in the Financial Services sector?
We are welcoming these new reforms positively, with the ever changing environment of the business sector globally and ease of access to information, we think that the new reforms will allow us to conform to the requirements of BEPS and at the same time maintaining our tax advantage on the global business sector. The changes will allow the sector to be more efficient and effective as a whole. During meetings and communication by the ATMC we are aware that this is a change in the sector but will also allow us to upgrade service levels. Tax planning will be much easier to advise on and this will be done without losing the tax advantage that our clients currently have.
We strongly advise that you reach out to us to have a better understanding of these implications and how we can work together to allow you and your partners to continue doing business efficiently and effectively.
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