Mauritius Investment Dealer company

Mauritius Investment Dealer Company

Tetra Consultants assists our international clients to set up a Mauritius Investment Dealer company. This entails applying and securing for the Global Business Corporations (GBC) license and an investment dealer license in Mauritius from the Financial Services Commission (FSC) Mauritius so that our clients may legally conduct forex and security transactions. According to the Mauritius Securities Act 2005, there are three categories of the Mauritius Forex License. They are the Full Service Dealer, Broker and Discount Broker. Each category has its own authorized activities, minimum paid up capital and government fees. Such companies are also subject to 15% corporate tax on net profits but may enjoy an 80% tax exemption assuming it meets the new requirements of having the firm’s core income-generating activities located domestically. It also may enjoy Double Taxation Avoidance Agreements (DTAAs) with 46 other countries, with even more under negotiation.

Types of Mauritius Forex License

Full Service Dealer

• A Full Service Dealer license is the most comprehensive option for our international clients, allowing your company to conduct the full suite of activities as follows:
  • Act as an intermediary in the execution of securities transactions for clients
  • Trade in securities as principal with the intention of reselling these securities to the public
  • Give investment advice which is ancillary to the normal course of business activities
  • Manage portfolios of clients
• For firms applying for the Full Service Dealer excluding underwriting license, the minimum stated capital is US$25,000, with a registration fee of US$750 and an annual fee of US$2,500. They would also need Professional Indemnity insurance proportionate to the volume and risk of their business.
• Companies that wish to underwrite or distribute securities on behalf of an issuer or a holder of securities will need to apply for the Full Service Dealer including underwriting license instead. This requires a higher minimum capital of approximately US$250,000. The registration fee will be US$3,000, with an annual fee of US$9,000.

Broker

• By establishing a Mauritius Broker, our international clients are allowed to execute orders for customers, manage portfolios for customers and give advice on securities transactions to customers. The minimum stated capital is approximately US$17,000, with a registration fee of US$500 and an annual fee of US$2,000.

Discount Broker

• Discount Broker allows our international clients to execute orders for their customers without giving advice. The minimum stated capital is approximately US$15,000, with a registration fee of US$250 and an annual fee of US$1,500.

Benefits of the Mauritius Forex License

There are several key benefits in selecting an investment dealer license in Mauritius.

Low corporate tax rate of 3%

• A lot of these are tied to the establishment of a Global Business Corporation (GBC). GBCs are one of two available company structures to foreign firms and is the only structure eligible for firms opting to provide financial services. It is defined as a company engaged in a relevant business such as forex trading within Mauritius, but with people who are non-residents of Mauritius and in a foreign currency.
• As previously mentioned, there are certain requirements to incorporating a GBC, which are having the firm’s core income generating activities located domestically. This refers to having office premises in Mauritius, employing at least one full time Mauritian employee, holding assets worth more than US$100,000 in a year, and having a reasonably expected annual expenditure in Mauritius.
• Fulfilling these requirements will entitle firms to an 80% tax exemption on income derived from their FSC approved investing and asset management activities, as well as any foreign dividend or interest income. This makes their effective tax rate 3%, one of the lowest in the world without the firm needing to sacrifice any form of credibility since Mauritius is not a tax haven, given that it is on the Organisation for Economic Co-operation and Development (OECD) whitelist of cooperative jurisdictions, and has never fallen into the Financial Action Task Force’s list of uncooperative jurisdictions. Mauritius is also a part of 46 DTAA which would ensure you are not double taxed on your earnings.

Privacy and asset protection

• GBCs also allow for high levels of privacy and asset protection for its owners since they are accorded the highest level of confidentiality under Mauritian Law. Due to this, companies can be assured that all information submitted to the Corporate and Business Registration Department (Mauritius Registrar of Companies) and the Financial Services Commission Mauritius will remain private and confidential. An added layer of privacy comes from the permissibility of nominee directors. This name can be used on any public documents that need to contain the director’s name.

Mauritius’ investment and business climate

• Mauritius has a conducive investment and business climate and was ranked 13^th in the World Bank’s 2020 Ease of Doing Business Index. In the region of Sub-Saharan Africa, it even ranks as 1^st within the region, outranking the next closest competitor Rwanda by 25 ranks overall. It is also considered one of the least corrupt Sub-Saharan African countries, with a score of 53 as compared to the regional average of 32.
• Numerous international banks operate branches within Mauritius, including reputable names such as HSBC, Barclays, and Standard Chartered. With more than 9,000 offshore entities present, it is clear that the business and banking infrastructure is able to both attract and sustain foreign investment.
• These institutions are also likely to be very experienced in dealing with foreign investors since they have been able to attract and manage over US$10.98 million in foreign direct investment inflows, ensuring that they have the capabilities to confidently handle any dealings with your company. Their regulatory system is both credible and transparent, specifically, their financial regulations have seen significant development since it was a major focus of the Government’s development strategies.

Innate benefits of the Mauritius Forex License

• As the product of such a well-regulated financial system, the license itself carries the same reputability and transparency associated with the financial system. This is due to FSC Mauritius’ constant efforts to keep updated and aligned to international financial standards, in particular the European Union’s Anti-money Laundering and Counter Terrorist Financing laws.
• It is also significantly cheaper and faster as compared to other jurisdictions; and has lower minimum paid-up capital. Taking the Full Service license without underwriting as an example, the minimum stated capital is US$25,000, with a registration fee of US$750 and an annual fee of US$2,500. The process is expected to take 4 to 5 months.

Alternatives to the Mauritius Forex License

Malta forex license

• The equivalent license in Malta would have a minimum stated capital of US$890,000, with a registration fee of US$30,000 and a variable annual fee of US$61,000 for the first US$1,220,000 of capital, and an additional US$6,100 for each part thereof. The application process is expected to take up to 6 months.

Georgia forex license

• A Georgia forex license would have a minimum capital of US$200,000 and a registration fee of $2,000. Fees aside, other requirements are stricter as well, as the company needs a local representative that must stay within the country for at least 16 days a month. The resident director also needs at least 4 years of relevant working experience and the appropriate educational qualifications. The application process is expected to take up to 6 months as well.
• Similar costs and waiting times are expected in other countries as well, and none would have the same standard of regulatory oversight as Mauritius, nor offer the same level of prestige.

How to register a Mauritius Investment Dealer company?

Tetra Consultants has more than a decade of experience in advising our global clients on setting up financial services businesses in Mauritius. Our team of experts will manage your financial service business set up from the start to the end, including incorporation of a new Mauritius company, opening of corporate bank account, drafting the legal documents required and securing the required licenses.

Requirements for the Global Business License

• FSC Mauritius states that all applications for a Global Business License must come through a Management Company (MC), a service provider that acts as an intermediary between the company and FSC. Thus, the MC will also be responsible for conducting Due Diligence and Know Your Customer checks on their clients and ensure that they are satisfied with the Fitness and Properness of their clients.
• The GBC needs a minimum of two directors, and must maintain their bank account, financial records and accounting records in Mauritius. These records should also be open to audit.
• Two forms must be submitted, Form B and Checklist Form A, along with a declaration stating that the information is accurate and that it was submitted with their consent by the MC.

Supporting documents for the Global Business License

• Alongside the two forms, the following documents should also be submitted:
  • Notarized copies of passport, proof of address and criminal record
  • Relevant educational certificates
  • 2 character reference letters issued by professionals
  • Bank reference
  • Detailed Curriculum Vitae (Signed and Dated)
  • Detailed business plan
  • Relevant manuals (e.g. procedure manual, business continuity plan, anti-money laundering policy, security policy and procedures)
• This license can be obtained within 4 working days if the application is complete and satisfactory.

Opening of operational bank account

• After this, Tetra Consultants will leverage on our network of international banks to open a corporate bank account for your operational purposes. This bank account will be used for your injection of paid-up capital as well as other operating expenses such as salaries, rentals or government fees. This bank account will also be used to hold the minimum capital needed for you to apply for the forex license.

Attaining the forex license

• We will then proceed to apply for the forex license of your choosing. For the application to go through, a properly filled in authority form with the written and signed consent of the relevant parties will be needed. A detailed business plan is also needed, with relevant details on the background of shareholders, detailed procedure of mode of operation, organizational structure chart, target market, details on securities that will be traded in and the 3 year financial forecasts. Any other relevant information should also be added.
• Further details on operations would also be required in the Anti-Money Laundering & Compliance Procedures Manual, which should outline the measures put in place to ensure the compliance to the EU anti-money laundering directives and the Securities Act. Specific information on the license holders will also be needed, such as the details of the company’s incorporation and list of shareholders.
• Personnel involved will also need to submit their curriculum vitae, completed personal questionnaire, passport copy and proof of address. Additional roles that must be appointed include 2 investment dealers who need to be sufficiently qualified to manage the operations of the firm, a compliance officer, a money laundering reporting officer and lastly an auditor.

Final steps

• After the license is attained, Tetra Consultants will assist you to open a clients account for your customers to deposit funds. Do note that this account will be segregated from the one previously opened.  As such, your Mauritius forex company will have two bank accounts, one operational account and one clients’ account.
• Lastly, our team will continue to ensure your compliance to all financial reporting and taxation procedures. We will help you to file your company’s annual tax return with the Mauritius Revenue Authority (MRA) and prepare your audited financial statements within the deadline of 6 months after financial year end. We will also help to facilitate the shareholders meeting. We are committed to ensuring your continued compliance and adherence to the regulatory requirements of the relevant authorities.

Contact us to find out more about how to set up your forex business in Mauritius. Our team of experts will revert within the next 24 hours.