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Transit via Mauritius Freeport for Trading in Africa

Antrix Corporate Solutions
02 November, 2015


Introduction

For the past recent years, International Trade has increased significantly in the African region following the shift of the worldwide investment pattern since Africa is now the leading emerging market for doing business.

Mauritius, being in a strategic position in the Indian Ocean between Asia, Africa, Australia and Europe and having a Freeport which is a duty free logistics, distribution and marketing hub, remains the jurisdiction of excellence for International Trade transits.

Mauritius Freeport

The Mauritius Freeport is a customs-free zone providing traders and international investors with the necessary logistics for the transshipment, consolidation, storage and minor processing of goods for re-export. The Freeport legislation provides for a liberal and comprehensive package of both fiscal and non-fiscal incentives for companies looking for a cost-effective logistics platform.

Incentives:

  1. 0% percent corporate tax
  2. 0% Value Added Tax
  3. No customs duties for goods and equipment imported into the Freeport Zones
  4. Free repatriation of profits without exchange control
  5. Reduced port handling charges for goods imported for re-export
  6. Sales in Mauritius allowed up to 50% of turnover
  7. Company ownership can be 100% foreign
  8. Access to offshore banking facilities
  9. Availability of work & live permits in Mauritius (Under operating company)

Why Use Mauritius as a platform for trade transit?

In addition to the above salient features of the Mauritius Freeport, Mauritius has got preferential access to markets and benefits from trade agreements such as:

  • Cotonou Agreement
  • Generalised System of Preferences (GSP)
  • Africa Growth & Opportunity Act (AGOA)
  • Common Market for Eastern and Southern Africa (COMESA)
  • Southern African Development Community (SADC)

Further, Mauritius has also signed Investment Promotion and Protection Agreements (“IPPAs”) with several African countries (Botswana, Mozambique, South Africa, Swaziland, Zimbabwe, Benin, Burundi, Ghana, Mauritania, Tchad, Comoros, Guinea Republic, Rwanda, Cameroon, Senegal and Madagascar). The IPPAs guarantees the followings:

  1. Free repatriation of investment capital and returns
  2. Guarantee against expropriation
  3. Most favored rule with respect to treatment of investment
  4. Compensation for losses in case of war or armed conflict or riot
  5. Arrangement for settlement of disputes between investors and the contracting states.

Duty-Free Market Access

Mauritius being a member state of COMESA and SADC,any company incorporated in Mauritius is eligible to benefit from 0% customs tariffs to their products when trading with other member states of COMESA and SADC, subject to satisfying the Rules of Origin. However, to be eligible under the COMESA / SADC tariff reduction programs / trade protocols, the Rules of Origin stipulate that a company must undertake a value addition of 35% local value added.

Structuring

In order to be in a position to operate within the Mauritius Freeport zone, a domestic company will need to be incorporatedand registered with the Registrar of Companies of Mauritius. Once incorporated, the company can apply and avail itself of a Freeport Operator Licence with the Board of Investment. Structuring of the company as illustrated below:

Notes:

  • Goods imported from abroad must first touch the Mauritian ground (custom clearance) before same can be re-exported to Africa. Substance must be shown in Mauritius as being the transiting jurisdiction.
  • Domestic company will also be responsible for invoicing to Africa.
  • Domestic company is taxed at 0% on its profit. Therefore, all profits made can be distributed as dividends to the shareholder(s) without any withholding taxes or exchange control in Mauritius.
  • Goods imported can be re-exported as such. There is no mandatory rule that the domestic company must undertake a 35% value addition in Mauritius before it can exports its goods to other countries. However, if the domestic will be dealing with SADC and COMESA countries, it will not be eligible to obtain a certificate of origin to beneficiate from preferential customs tariffs of 0% unless it creates a 35% value addition.


Antrix Corporate Solutions Ltd

Antrix Corporate Solutions Ltd is licensed by the Financial Services Commission of Mauritius to provide company, fund and trust setup services as well as management/ administration services including providing directorship, corporate secretarial, registered office, bookkeeping, accounting and any and all related administrative services.

Contact Details:

Mr. Vinesh Arvinsingh Canaye
Chief Operating Officer

Email: vinesh.canaye@antrixcorporate.com
Tel: +230 211 2888
Fax: +230 213 0888
Mob: +230 5254 7240
Web: www.antrixcorporate.com





 

 


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