Case Studies: How companies, entrepreneurs and investors use Mauritius for their business case
There are many examples of doing successful business in Mauritius. Following you can find case studies of the most relevant business situations (click on image to scroll down).
Case studies for companies and corporations
Case studies for entrepreneurs and business owners
Case studies for investors and traders
Case Study 1
German export-oriented company wants to save cost and increase efficiency by outsourcing business processes
High labor cost in Germany.
Lack of available staff with foreign languages as mother tongue, and knowledge and experience in IFRS accounting, respectively.
Internal reorganization requires a new level of proficiency.
Existing accounting staff is experienced with HGB (German accounting system) only.
Strengthen the company’s balance sheet by reducing cost.
Bringing the company to the next level by building international staff with the relevant language and accounting skills.
Setup an operational company in Mauritius as a GBC.
Hire bilingual workforce (English and French) for staffing a global call center in Mauritius, as well as qualified accountants for bookkeeping and accounting processes for subsidiaries worldwide
Case Study 2
Technology company from a developing nation looking for funding by global investors
Successful software company wanting to launch Software as a Service (SaaS) as a new product for global customers.
Potential investors from Silicon Valley do not directly invest into companies based in the particular country due to political risk or regulatory shortfalls.
Structure the company in a way that it is acceptable for potential investors.
Develop the IP further and keep it at a safe place outside of the unstable home jurisdiction.
Case Study 3
South African company expanding its business to other African countries
White-owned business in SA with middle BBBEE scorecard values (BBBEE = Broad Based Black Economic Empowerment), wanting to expand business into Africa or globally.
Has a BBBEE partner as shareholder that is not needed for conducting ex-SA businesses.
Therefore, the South African legal entity does not qualify for becoming a mother company for ex-SA business units.
Expand business outside of South Africa without having a BBBEE partner on board.
Keep revenue from African companies outside of South Africa where it can be reinvested.
Setup a Mauritius holding company where the company owner can have 100% ownership, ideally under a Mauritius family trust.
No limitations by foreign exchange controls in Mauritius.
Quick and hassle-free capital transfers without central bank involvement.
Case Study 4
European company using IP Box Schemes
The new IP Box Regime in Europe no longer allows the low taxation of income streams resulting from IP, as it was common in specific countries (i.e., Luxembourg, the Netherlands, Cyprus)
Tax reduction of IP-related income becomes impossible after grandfathering ends in 2021
Find a new jurisdiction where IP-related income streams (i.e., royalties) can be cashed in with lower taxation
Found a GBC in Mauritius and transfer IP to it, or move existing company to Mauritius.
It must be noted, however, that GBCs holding IP Rights will be required to demonstrate that they have incurred expenditure in Mauritius which is proportionate to the R&D of the relevant IP Rights.
Case Study 5
Entrepreneur planning to close a big deal in a new business line, wanting to escape high taxation
The entrepreneur has already decided to leave his home country, now looking for the best jurisdiction.
He is expecting to close a big deal very soon in a new business that is not related to any existing business in his country of residence.
Time is an issue.
Buy PDS property (Property Development Scheme) in Mauritius which allows foreigners to get a residence permit and to become a tax resident immediately.
Setup a GBC in Mauritius, eventually with a daughter company in a no-tax jurisdiction.
For closing the big deal, found a SPV in a no-tax jurisdiction if the counterpart accepts an invoice from that country. All that can be finalized within a few weeks.
Case Study 6
Digital Nomad looking for a tax residency
Successful online marketing business with low taxation, soon reaching a level of exceeding certain thresholds
No permanent residency, leading to acute problems of opening bank accounts and potential problems with the tax authorities of the home country (subject-to-tax-clause).
Children have to go to school.
Establish a permanent residency in a country with territorial or remittance-based taxation system with having no CFC rules in force for individuals, permitting homeschooling, and requiring minimum physical attendance for obtaining tax residency.
Relocate to Mauritius and apply for a residence permit as a self-employed entrepreneur. Stay in Mauritius for >183 days in year 1 and year 2 each. From year 3, only 270 days in any three year period are required.
Register a GBC in Mauritius.
For non-Mauritian revenue (i.e. selling digital assets worldwide), eventually setup a separate company in a no-tax jurisdiction.
Case Study 7
Early retired pensioner looking for a new purpose
In most industrialized nations, there are many professionals that have received golden handshakes from their companies or have been sent into (too) early retirement.
They are still active and want to achieve something significant in life.
Lack of opportunities in the developed world.
Most employers do not value higher age as a wealth of knowledge and experience but prefer younger managers.
Looking for a new challenge as an adviser, coach, incubator, business angel, co-founder or manager in a start-up in a developing nation, i.e. in Africa.
If necessary or advisable, relocate to a beautiful place with high living standards.
We have several interesting projects based on game-changing technologies or business models, welcoming experienced experts. In many cases, Mauritius will become the regional or global headquarters.
Talk to us!
Case Study 8
IT innovator / blockchain and other disruptive technologies
The entrepreneur has developed a promising business case based on a new technology.
He wants to go to market quickly.
Due to the disruptive nature of the new technological paradigm, there is insufficient regulation representing legal threats and high economic risk for the entrepreneur.
Instead of waiting until the legal framework in his home jurisdiction would allow him the freedom to operate without major legal risks, he wants to setup the business in a more advanced jurisdiction.
Case Study 9
Asset protection for a wealthy individual from South Africa
All tangible and non-tangible assets are in South Africa.
All eggs in one basket.
Exposure to political risk.
Wants to protect his family’s wealth from adverse conditions.
Wants to be prepared for moving out of SA should the need arise (Plan B).
Setup a family trust in Mauritius which will found an asset holding company in Mauritius.
Redirect foreign-sourced income into this SPV.
Transfer movable assets to the SPV, as well as gradually money from SA within the annual allowances for global investments.
Case Study 10
Asset manager from Germany wanting to launch his own investment fund
A German asset manager wants to launch his own investment fund and distribute it in the EU.
Cost of setting up a mutual fund in Luxembourg (being the most flexible and “cheapest” financial center in the continental EU) would be $300-500,000 – too high for starting a new fund.
The regulatory framework for financial services providers is prohibitive for SMEs.
Also, there is an increasing lack of legal certainty.
Find an alternative solution at affordable cost in another jurisdiction with a conducive legal and financial environment.
(See cost comparison between Mauritius and Europe here.)
Setup a Collective Investment Scheme (CIS) or closed-end fund, and a CIS Management company in MU with a total setup cost of $30-50,000.
Establish a JV with a regulated financial intermediary player in the EU for getting access to the EU re marketing and distribution of financial products.
Case Study 11
Trader (full-time), wanting to escape from capital gains tax and excise tax
Trading in securities and real estate is subject to Capital Gains Tax in Germany. Additionally, commercial traders have to pay excise tax.
Licenses for financial services are extremely expensive. For example, an investment adviser in Germany has to set aside 250,000 EUR in an escrow account that must be unimpaired at all times.
CGT as a major limiting factor to performance; according to a new law to be launched in Germany in 2019, even unrealized profits in mutual funds will be taxed.
Excise tax for professional traders.
High regulatory hurdles if you want to provide financial services to clients.
Escape from tax laws and regulatory requirements that are prohibitive for small financial traders.
Setup your own investment vehicle in Mauritius where is no CGT and no excise tax.
Enjoy excellent bandwidth and proximity to the landing point of new submarine fiber optic cable.
Better time zone for trading in Asian markets.
Case Study 12
Global investor wanting to diversify his portfolio
The investor holds a securities portfolio with a traditional asset allocation, with a heavy exposure to bonds and stocks in the US and Europe.
The vulnerability of the world financial system includes a big threat to the portfolio.
A financial crash could lead to big losses in the portfolio.
Make the portfolio resilient by diversifying it towards alternative asset classes in developing markets and direct investments in non-financial sectors.
Setup a closed-end fund or a Protected Cell Company in Mauritius.
Direct investments, i.e. an office building in Mauritius, dirt cheap property in Zimbabwe, or participations in agricultural projects in Africa, shall be put into appropriate investment vehicles under the CEF or PCC.