Why do companies use Mauritius as a holding jurisdiction?
Direct Answer
Mauritius is one of Africa's most important investment holding jurisdictions, offering low tax rates, an extensive treaty network, political stability, and a bilingual common-law legal system.
Overview
Mauritius has become one of the world's leading financial centres for channelling investment into Africa and Asia. The country ranks consistently as the top source of foreign direct investment into India and ranks highly for investment flows into sub-Saharan Africa. Several structural advantages make it the jurisdiction of choice for multinational holding structures.
The treaty network
Mauritius has signed double taxation avoidance treaties with over 45 countries, including India, South Africa, China, Singapore, France, the UK, and many African nations. These treaties typically reduce or eliminate withholding taxes on dividends, interest, and royalties paid to a Mauritius holding company, and in some cases give Mauritius exclusive taxing rights on capital gains from the disposal of underlying investments (where Mauritius imposes zero capital gains tax).
Low effective tax rate
Through the Global Business Company (GBC) structure, foreign-source income (dividends, interest, royalties, capital gains) can attract an effective rate as low as 3% via the 80% partial exemption. No withholding tax on dividends repatriated from Mauritius. No capital gains tax.
Legal system
Mauritius has a hybrid legal system combining English common law (for corporate and commercial law) with the French Napoleonic code (for civil law and family law). This makes it accessible to both common-law and civil-law investors. English is the language of courts and contracts.
Regulatory quality
The Financial Services Commission (FSC) is a respected regulatory body. Mauritius is on the FATF white list (not on any blacklist), which is important for international banking relationships and investor confidence. The MRA's transfer pricing and BEPS-aligned rules reflect a commitment to international tax standards.
Political stability
Mauritius has been a stable democracy since independence in 1968. Property rights are well-protected. The legal system is independent and court decisions are predictable. This stability is particularly valued by investors routing capital into more complex or higher-risk African markets.