Key Takeaways
- A Mauritius company can hold listed securities, bonds, funds, and other market instruments for a non-resident owner, but opening brokerage and custody accounts in the entity's name depends on which brokers accept a Mauritius entity.
- Tax treatment of dividends, interest, and capital gains, along with withholding at source, matters more than headline neutrality because treaty access is limited for passive investors.
- Even a passive holding company faces economic substance expectations and information-exchange exposure that owners should weigh before funding the structure.
- Single owners and families can fund and extract returns through this vehicle, though it suits some portfolios better than others depending on broker acceptance and treaty position.
Using a Mauritius Company as a Private Investment and Portfolio Holding Vehicle
The GBC replaced the older GBC1 and GBC2 categories after the Finance Act 2018 amendments. A single licence type now applies: the Global Business Licence, granted by the regulator and held by a company formed under ordinary Mauritian company law.
Investment holding is one of the named global business activities for which a GBC may be set up. The same licence covers trading, intellectual property holding, and fund management, but those are separate use-cases; what concerns a portfolio owner is the proprietary holding of financial assets.
There is no prescribed minimum stated capital, and Mauritius applies no thin-capitalisation rules. That flexibility helps when you intend to fund a portfolio entirely through equity or shareholder loans.
Every GBC must be administered by a Management Company licensed by the regulator. The Management Company acts as the GBC's regulatory agent and, in practice, is the entity you will deal with for filings, director services, and licence renewals.
Company records held by a GBC are classified and not open to public inspection, which matters to owners who value confidentiality at the registry level.
What This Structure Holds: Listed Securities, Bonds, Funds, Forex, and Market Instruments
A plain investment holding GBC can hold listed equities, bonds, exchange-traded funds, structured notes, forex positions, and fund units through a custodian or broker account opened in the company name. No separate securities licence is needed for holding such instruments on the company's own account.
The distinction that governs licensing is who you trade for. A private, single-owner portfolio company that trades only for its own account does not require an Investment Dealer Licence; proprietary, self-directed activity sits outside that regime.
That position changes the moment the entity acts for third parties. Brokerage or dealing on behalf of others requires an Investment Dealer Licence issued under the Securities Act 2005, and an entity that deals as principal against a client needs a Full Service Dealer licence rather than a broker permission.
A GBC used purely to hold and manage your own portfolio is not a regulated intermediary. The moment it manages money for anyone else, a separate FSC licence is triggered.
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Opening a Brokerage and Custody Account in the Company Name
Onboarding a GBC with a broker or custodian is a documentation exercise. Expect to provide the certificate of incorporation, the Global Business Licence, constitutive documents, certified identification for all directors and beneficial owners, a Tax Residency Certificate, and full anti-money-laundering and know-your-customer material.
The Tax Residency Certificate (TRC) is issued by the Mauritius Revenue Authority and is the document that unlocks treaty benefits. To obtain and keep it, the company must demonstrate management and control in the jurisdiction, including at least two resident directors.
For accounts opened with a US broker, a non-US entity completes an IRS Form W-8. A GBC classified as a Passive non-financial foreign entity files the relevant part of the W-8BEN-E and discloses substantial US owners where any exist.
One substance condition is non-negotiable: the GBC must maintain its principal bank account in Mauritius. A brokerage or custody account held abroad does not substitute for that local banking relationship.
Counterparties should verify two things, because they are separate registers. A company appears on the Corporate and Business Registration Department register and must also hold a valid FSC licence; a firm can remain incorporated while its licence is suspended or revoked.
Which Brokers and Custodians Accept a Mauritius Entity
Acceptance is real but selective. The table below summarises the practical position for the providers most relevant to a portfolio holding company.
| Provider type | Position | Notes |
|---|---|---|
| Interactive Brokers | Accepts entity accounts | Lists Mauritius as eligible; W-8BEN-E, GBL and TRC typically requested |
| Mauritius banks (MCB, SBM, AfrAsia, Bank One) | Operational for GBCs | Used by FSC-licensed entities for the required local account |
| International prime brokers / private banks (e.g. Saxo, Swissquote) | Generally accept GBCs | Subject to enhanced due diligence on ownership and substance |
| US retail brokers (Fidelity, Schwab, Vanguard) | Generally decline | Do not accept foreign entity accounts |
| EU MiFID platforms | Heightened scrutiny | Source-of-funds and substance documentation requirements |
Removal from the FATF grey list in October 2021 means standard customer due diligence applies to a Mauritius counterparty rather than the enhanced checks attached to a high-risk designation. Even so, some correspondent banks continue to treat the jurisdiction as higher-risk, and the GBC framework itself invites scrutiny of substance and purpose.
Payment processors such as PayPal, Stripe, and Wise Business apply inconsistent acceptance to GBCs. This rarely matters for a securities portfolio, though it can affect how you move cash returns.
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Tax Treatment of Dividends, Interest, and Capital Gains Received by the Portfolio
Two features make Mauritius attractive for holding securities. There is no capital gains tax on the disposal of shares, equity interests, or bonds, and there is no withholding tax on dividends paid by a Mauritian company to its shareholders, whether resident or non-resident.
A GBC is taxed at 15% on its tax-adjusted income. The headline rate is not the whole picture for portfolio income, because a partial exemption regime applies to specified categories.
Qualifying foreign-source income, including dividends and interest, can benefit from an 80% exemption, producing an effective rate of about 3%. The exemption is conditional: the company must meet substance requirements and carry out its core income-generating activities in the jurisdiction.
The exemption band runs from 80% to 95% depending on the income and the licensed activity. For funds meeting the prescribed conditions, interest income may qualify for a 95% exemption, effective from the year of assessment commencing 1 July 2024.
The Fair Share Contribution, levied at 5% on chargeable income for standard-rate entities from 1 July 2025 to 30 June 2028, does not apply to companies holding a Global Business Licence. A portfolio GBC is outside that charge.
The partial exemption depends on meeting substance and core-activity conditions every year. Fail them and the exemption is lost, raising the rate toward the full 15% and putting treaty access at risk.
Withholding Tax at Source and the Limits of Mauritius Treaty Access for Passive Investors
Mauritius maintains a network of 46 double taxation agreements, including India, China, the United Kingdom, France, Germany, Singapore, South Africa, the UAE, Luxembourg, and a cluster of African states. You can confirm coverage through the MRA treaty list.
A TRC is the gateway to those agreements. Without a valid certificate, a claim for reduced withholding at source in a partner country may be denied.
The treaty landscape has tightened. The Multilateral Convention entered into force for Mauritius on 1 February 2020, introducing the Principal Purpose Test, which lets a tax authority refuse treaty benefits where an arrangement is primarily tax-driven.
India and Mauritius signed a protocol on 7 March 2024 to insert the Principal Purpose Test into their bilateral treaty. Investors routing into Indian equities through a Mauritius layer now face heightened anti-abuse review, a point the EY tax alert examines in detail.
The treaty map also has gaps that cannot be fixed at the Mauritius level. There is no agreement with the United States, Canada, Australia, Japan, or the Netherlands.
For a portfolio heavily weighted to US-listed securities, this is a structural drag. A GBC holding US equities receives dividends subject to the statutory 30% US withholding rate, and no Mauritius treaty reduces it.
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Economic Substance Expectations for a Passive Investment Holding Company
Substance is the price of the tax outcome. The Financial Services Act 2007 and the Income Tax Act 1995 require a GBC to carry out its core income-generating activities in the jurisdiction at all times.
The level of substance scales with the activity. A passive holding structure is not assessed like a licensed financial services business, so the demands are lighter than for an active manager.
For a pure holding company, a qualified accountant and director may suffice for personnel. The company must keep a physical office in the jurisdiction, accessible and adequately equipped for its activities, and a holding-and-treasury GBC may need fewer local staff than one running active trading.
Management and control must be exercised locally. That means at least two resident directors who genuinely participate in strategic decisions, and board meetings held in the jurisdiction with full minutes.
- A physical, equipped office in Mauritius
- Two resident directors active in decision-making
- Board meetings held locally with comprehensive minutes
- Expenditure in Mauritius proportionate to the company's activities and income
- Records demonstrating real activity: contracts, correspondence, minutes, financial statements
There is no prescribed minimum expenditure figure; the test is proportionality. For a holding company earning dividends from subsidiaries or portfolio income, the regulator expects local personnel actually evaluating and managing those investments.
The consequences of falling short are direct. Loss of substance compliance ends eligibility for the partial exemption, can compromise treaty access, and may cause the FSC to refuse a licence renewal. The MRA reviews substance each year as part of TRC renewal. The substance framework sets out how these tests are applied.
Reporting and Information-Exchange Exposure for the Account and Its Owners
Beneficial ownership information is collected but not public. Under the Financial Intelligence and Anti-Money Laundering Act, every company files ownership data with the Corporate and Business Registration Department; the register is accessible to the Financial Intelligence Unit and law enforcement, not to the public.
Mauritius participates in the Common Reporting Standard. A GBC holding a portfolio account through a Mauritian financial institution is reportable where its controlling persons are tax residents of a participating jurisdiction, and the MRA transmits those reports automatically to partner authorities.
The practical consequence: if your controlling shareholders are tax resident elsewhere, say the United Kingdom, the account is likely a reportable account exchanged with that country's tax authority. The structure provides registry-level confidentiality, not invisibility from your home tax administration.
US connections trigger a separate regime. Mauritius has signed a FATCA intergovernmental agreement, so US persons with interests in a GBC must weigh FATCA and FBAR obligations, and the GBC itself must state its FATCA classification on the W-8BEN-E.
On the filing side, the company maintains accurate financial records and files annual returns with both the FSC and the MRA. The FSC requires activity reports and notice of structural changes; the MRA requires income tax returns and substance declarations for TRC renewal.
A recent ownership-declaration reform deserves a note on timing. UBOs must confirm their status in writing and notify the company of changes, and companies incorporated before 30 June 2025 must comply by 30 June 2026.
Single-Owner and Family Use: Funding the Company and Extracting Returns
A non-resident owner can capitalise the GBC by share subscription or shareholder loan. Share capital may be denominated in any currency except the Mauritian Rupee, which suits an international portfolio held in dollars or euros.
There are no exchange controls. Capital moves freely into and out of the company, with no restriction on remitting funds in either direction.
Extracting profit by dividend is tax-efficient at the Mauritius level. There is no withholding tax on dividends paid by a GBC to its shareholders, regardless of where they reside, so a single owner taking profits as dividends pays zero local withholding.
Interest paid on a shareholder loan back to the owner is a different matter. It is subject to Mauritius withholding at the domestic rate, though a treaty may reduce that where the owner is resident in a partner country. Capital gains on the disposal of GBC shares by a non-resident are generally not taxable under domestic law.
The decisive risk usually sits outside the jurisdiction. The owner's home country will treat the GBC as a foreign company, and controlled-foreign-company rules in places such as the UK, Germany, Australia, or South Africa may attribute the GBC's income directly to the owner or deny deferral. This must be assessed at home, not in Mauritius.
A family planning across generations sometimes places a Mauritius foundation, governed by the Foundations Act 2012, as the shareholder of the GBC. The foundation adds a layer for estate planning and asset protection, including against forced heirship, sitting above the portfolio structure.
Where Mauritius Works Well and Where It Falls Short for This Use-Case
The strengths are concrete. No capital gains tax on securities and no dividend withholding to shareholders combine well for an international holding structure, and the roughly 3% effective rate on qualifying foreign-source income is genuinely competitive where substance is met.
Credibility is a further point in its favour. The jurisdiction sits on the EU whitelist, is compliant with OECD standards, and was removed from the FATF grey list in October 2021, so counterparties apply standard due diligence rather than high-risk checks. A legal system drawn from English common law and French civil law gives investors predictability.
Treaty depth is the real differentiator, but only in the right direction. Coverage is strongest toward Africa and Asia, including India, South Africa, Singapore, China, Rwanda, Kenya, Mozambique, and Zimbabwe, which is where the structure earns its place.
The weaknesses are equally concrete.
- No treaty with the USA, Canada, Australia, or Japan; a US-heavy portfolio suffers 30% withholding on dividends with no fix at the Mauritius layer.
- The India protocol of March 2024 adds Principal Purpose Test risk for India-focused portfolios; treaty-shopping routes are under heightened scrutiny.
- Passive treaty access is over; a "brass plate" company will not survive scrutiny under the PPT, substance rules, Pillar Two, and information exchange.
- Substance carries real annual cost, typically USD 8,000 to 20,000 or more before advisory fees, which makes small portfolios uneconomic.
- Home-country CFC exposure is unresolved at the Mauritius level and is often the deciding factor for European, UK, Australian, or South African owners.
- Retail brokerage access is limited; large US platforms decline foreign entities and EU platforms apply heightened due diligence.
Conclusion
The right reading of this structure is conditional, not enthusiastic. A Mauritius holding company rewards an investor whose portfolio leans toward Africa and Asia, who can fund the annual substance cost, and who has cleared home-country controlled-foreign-company rules; for a US-weighted portfolio or a small position, the withholding drag and running cost usually outweigh the benefit.
The first thing to settle before anything else is your own tax residence and its CFC regime, because that single point decides whether the Mauritius layer adds value or merely adds cost.
How Expanship Can Help Your Business in Mauritius
Expanship sets up and runs the Global Business Corporation used for portfolio holding, from licence application through the resident-director and local-office arrangements that keep the partial exemption and treaty access intact, and supports the wider needs of a foreign-owned entity in the jurisdiction.
- Incorporation of the GBC and Global Business Licence application with the FSC
- Registered agent, Management Company services, and registered office
- Economic-substance setup, resident directors, and Tax Residency Certificate support
- Ongoing FSC and MRA compliance, annual returns, and substance declarations
- Accounting, bookkeeping, and coordination of the local statutory audit
- Introductions to Mauritian banks and international brokers that accept GBCs
To assess whether this structure fits your portfolio and home-country position, contact Expanship Mauritius.
Frequently Asked Questions
No. A GBC that holds and trades only for its own account is engaged in proprietary investment activity, which falls outside the Investment Dealer regime. A licence under the Securities Act 2005 is required only if the company trades or deals on behalf of third parties.
No. There is no double taxation agreement between Mauritius and the United States, so dividends from US equities are subject to the statutory 30% withholding rate with no treaty reduction available. A portfolio weighted heavily to US-listed securities will carry this cost permanently through the Mauritius layer.
A GBC is taxed at 15%, but qualifying foreign-source income such as dividends and interest can benefit from an 80% partial exemption, giving an effective rate of about 3%. That outcome depends on meeting substance requirements and carrying out core income-generating activities in the jurisdiction each year.
At least two resident directors who actively participate in strategic decision-making. This is part of the management-and-control test required to obtain the Tax Residency Certificate and to keep treaty eligibility and the partial exemption.
It may. Controlled-foreign-company rules in countries such as the UK, Germany, Australia, and South Africa can attribute the GBC's income to you or deny deferral, and this is assessed under your home law rather than in Mauritius. You should confirm your position with a home-country adviser before forming the structure.
Generally yes. Mauritius participates in the Common Reporting Standard, so an account held through a Mauritian financial institution is reportable where the controlling persons are tax resident in a participating country, and the MRA exchanges that information automatically. Beneficial ownership is also filed with the registry, though that register is not public.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
