Mauritius has historically been one of the most significant jurisdictions for structuring foreign investment into India through its Global Business Company (GBC) regime, regulated by the Financial Services Commission -- though the 2016 and 2024 DTAA Protocol amendments have substantially reduced the tax advantage that once made this route especially attractive, an NRI in Mauritius incorporating an Indian company still needs at least one India-resident director under the Companies Act, 2013, exactly as founders based anywhere else do.
Mauritius's Global Business Company regime and its historic role in India-bound investment
For many years, Mauritius was the single largest source of foreign direct investment into India, driven
substantially by its Global Business Company (GBC) structure -- companies licensed and regulated by
Mauritius's Financial Services Commission (FSC) that historically offered a favourable tax position on gains
from Indian investments under the pre-2016 DTAA. The 2016 Protocol's introduction of source-based capital
gains taxation (see this platform's Tax guide for Mauritius), and the 2024 Protocol's pending Principal
Purpose Test, have both reduced the pure tax-driven appeal of routing investment through a Mauritius GBC,
though Mauritius remains a well-established, internationally recognized jurisdiction for structuring
cross-border investment for reasons beyond tax alone.
Incorporating an Indian company as an NRI founder based in Mauritius
An NRI in Mauritius setting up an Indian private limited company follows the same Companies Act, 2013
framework as a founder based anywhere else -- including the requirement that at least one director be a
person who has stayed in India for a specified minimum number of days in the preceding calendar year. This
resident-director requirement is commonly satisfied by bringing in an India-based co-director or professional
nominee, a structure this platform's Business guides for other countries also describe.
FDI reporting and repatriating business profits
Foreign investment into an Indian company by an NRI or a Mauritius-incorporated entity must comply with
FEMA's FDI reporting requirements, generally through the RBI's online reporting portal, within the prescribed
timelines after each equity issuance or transfer. Repatriating profits or dividends from the Indian company
back to Mauritius is generally permitted through normal banking channels, subject to applicable withholding
tax under Indian law and the DTAA's dividend article, and subject to Mauritius's own regulatory requirements
for funds received by a GBC or other Mauritius entity.
Common mistakes NRI founders and investors in Mauritius make:
- Assuming the pre-2016 tax advantages of routing investment through a Mauritius GBC still apply in
full -- they have been substantially narrowed.
- Not appointing a resident director for an Indian company, causing compliance issues under the
Companies Act, 2013.
- Missing FEMA's FDI reporting deadlines after an equity issuance or transfer.
