What is a Global Treasury Activities Licence?
A Global Treasury Activities Licence allows companies to centralise and manage their treasury functions, including cash and liquidity management, risk management, and financial planning, from within Mauritius.
This licence positions Mauritius as a prime location for global treasury operations.
Trends and Future Outlook
The demand for centralised treasury functions is growing, driven by the need for efficiency and risk management. Mauritius is well-positioned to capitalise on this trend due to its strategic location and favourable business environment.
Tax Efficiency
Mauritius offers significant tax benefits, including low corporate tax rates, tax holidays, and an extensive network of double taxation avoidance agreements (DTAAs) with various countries, thereby enhancing tax efficiency for businesses.
Strategic Location
Mauritius’s geographical location provides easy access to key markets in Africa, Asia, and the Middle East, making it a strategic base for treasury activities.
Global Business Environment
The country offers access to skilled professionals, advanced infrastructure, and comprehensive financial services, fostering a conducive environment for global business.
Benefits of this licence
Tax Benefits
Businesses benefit from various tax incentives, including exemptions on interest, dividends, and capital gains, along with benefits from DTAs.
Operational Efficiency
Centralised treasury management in Mauritius leads to streamlined operations, reducing costs and enhancing efficiency.
Currency Risk Management
A centralised treasury helps manage currency risk more effectively, protecting the company from exchange rate fluctuations.
Enhanced Liquidity Management
Improved cash flow and liquidity management through centralised oversight ensures optimal utilisation of resources.
Strategic Advantages
Mauritius is an ideal location to support global trade and finance activities, this offers a strategic advantage for businesses.
Regulatory Support
Strong support from the FSC and other regulatory bodies ensures businesses receive the necessary guidance and assistance.
Licence Criteria and Requirements
Administrative Requirements
Since the entity is likely to be established as a Global Business Company (GBC), it has to meet the basic requirements of a GBC which can be found here. And to be authorised to conduct the Global Treasury Activities, the GBC must meet the following conditions:
- Physical Presence: The GBC must have a physical office in Mauritius.
- Staffing Requirements: The GBC should employ a minimum of four professionals, including at least one at a managerial level.
- Expenditure: The entity must incur an annual expenditure of at least MUR 2 million.
Services Provided
Companies holding a Global Treasury Activities Licence must provide at least three treasury services to three or more related companies, which may include:
- Arranging credit facilities, either through financial institutions in Mauritius or utilising network companies’ surplus funds
- Managing derivatives
- Offering corporate finance advisory
- Administering and controlling credit
- Engaging in factoring, forfeiting, and re-invoicing activities
- Issuing guarantees, performance bonds, SBLC, and handling remittances
- Managing funds for designated investments.
Taxation Benefits
Tax Holiday: A 5-year tax holiday on corporate income is available, subject to meeting the licensing requirements.
No Capital Gains Tax: There is no capital gains tax in Mauritius.
No Withholding Tax: There is no withholding tax on dividends or interest in Mauritius.
FAQs
Frequently Asked Questions
Setting up an entity with a Global Treasury Activities licence in Mauritius can offer numerous strategic and financial benefits. However, navigating the specifics of this process can raise several questions. To assist you in better understanding the requirements, benefits, and application process for this licence, we have compiled a list of frequently asked questions. These FAQs aim to provide clear and concise answers to common queries, ensuring you have all the information needed to make informed decisions about establishing your global treasury operations in Mauritius.
- The application processing fee is USD1,000 payable to the FSC.
- The annual licence fee is USD2,500 payable to the FSC.
- Applicants must submit a detailed business plan, 3-year financial forecast, corporate statutory documents, an internal controls manual, draft contracts with related companies. Additionally, track records and credentials of promoters and shareholders, as well as general information about the company's objectives, proposed services, structure, and compliance with regulatory requirements, are necessary.
- While the rules and regulations do not specify a minimum capital requirement, it is crucial to ensure that the company has sufficient capital to support its treasury operations and meet its expenditure commitments, such as the minimum annual expenditure of MUR 2 million.
- Both new and existing Global Business Companies (GBCs) that are involved in treasury management functions and wish to centralise these operations in Mauritius are eligible to apply for a GTA licence.
- The application duration process can vary depending on the completeness of the submitted documents and the complexity of the applicant's business structure. Generally, it can take several weeks to a few months for the FSC to review and approve a complete application.
- While the primary focus of a GTA licensee should be on treasury related services, they may engage in other activities as long as these activities comply with the regulations and do not conflict with the conditions of the GTA licence. Any additional activities should be specified and approved by the FSC.
- Companies can demonstrate their commitment by maintaining detailed financial records, showing evidence of their expenditures related to their treasury activities, such as salaries for the required professionals, office maintenance costs, and other operational expenses that meet the minimum MUR 2 million requirement.
