really good idea. Much said here in the posts is something you can take with you to better understand your situation which at this point is at big risk.
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Critique My Lean US - Mauritius Structure (2.1% Effective Tax Rate)
- Thread starter Leo Vanguard
- Start date
If you can't find a proper solution from everything posted here, I would just set up a regular company in Mauritius and pay the maximum 15% corporate tax and up to 20% personal income tax.
If you want to live there peacefully with your wife, this is probably the best path to take.
If you want to live there peacefully with your wife, this is probably the best path to take.
can someone explain this to me
"Nonresidents are taxed only on Mauritius-source income"
what does this mean? for example, a company that is not resident in Mauritius, and not registered in Mauritius, sells services to companies in Mauritius.
Is that income Mauritius sourced?
Can someone give me an example that would qualify for tax in the above mentioned example?
"Nonresidents are taxed only on Mauritius-source income"
what does this mean? for example, a company that is not resident in Mauritius, and not registered in Mauritius, sells services to companies in Mauritius.
Is that income Mauritius sourced?
Can someone give me an example that would qualify for tax in the above mentioned example?
Examples of Mauritius-source income :
- Income from employment in Mauritius
- Profits from businesses operating in Mauritius
- Rental income from property located in Mauritius
- Interest earned from Mauritian banks or financial institutions
- Dividends from Mauritian companies
Regarding your question :
Normally, income from services is considered to be sourced where the services are performed, not where the customer is located.
Anything which generates permanent establishment is to be considered Mauritius-sourced income (e.g., long construction works in Mauritius).
Examples :
- Digital consultation from USA Company (not Mauritius-sourced income)
- Operating a factory in Mauritius (Mauritius-sourced income)
- Remote software development for Mauritian clients (not Mauritius-sourced income)
- Renting out property located in Mauritius (Mauritius-sourced income)
General one for Mauritius:
- Branch, office, factory, workshop, or installation used for extraction of natural resources.
- Building site, construction, installation, assembly, or supervisory services where the activity on the site lasts for a minimum of six months or 12 months, depending on the tax treaty.
You could also just do some better research or find a tax consultancy on Mauritius or some of the many service providers that sell company formation in Mauritius that know the tax rules.
Still as suggested a few times already, register a local company and handle all your business there if you want to live in piece on the island.
Still as suggested a few times already, register a local company and handle all your business there if you want to live in piece on the island.
Can you make the GBC company as your holdco which owns your US company? I believe dividends received from local resident company is tax free, i have been looking into mauritius myself, its a great option for someone who wants to leave dubai and pay less than 9% and enjoy better quality of life and better air quality.
I am sure with some proper structuring you can end up paying around 3-5% which is a win win in comparison to dubai considering the cost of living and lower tax in mauritius plus the geo location makes it a very attractive choise
Even if so, there would be 44.7% tax in the US. Probably not what OP is looking for.
Ok, I think we have the very best option. We create a Kyrgyzstan's high technology park company which recieves all royalties without WHT. This company then distributes all profits without WHT and without tax to the UAE holding, where it is equally tax-free under the participation exemption. You can then live a peaceful live ever after where ever you want, while we rack the dollars for you in pieces and in peace. You can finally rest and laze on the beach.
How does this sound?
How does this sound?
Mostly good but aren't you worried about the list of permitted activities?
I would try to verify which are those activities before flying to KG
GBC - Royalty income exempt
You can register a GBC in Mauritius. The GBC can carry out innovation-driven activities. You can use the GBC as the vehicle through which you develop the 'high-value intellectual property'. The GBC can be the company that holds the IP and license it to the LLC and in return the GBC earns royalty fees. Under the Mauritian tax law, a company involved in innovation-driven activities benefits from an 8 year income tax holiday on the royalties from the date the innovation driven activities starts. (refer to item 34 of sub-part c of the income tax act)
Dividend income
If you a shareholder in the GBC - the GBC can issue dividend to you which is exempt from tax in Mauritius. Meaning when you are filing your individual income tax return in Mauritius - the dividend income isn't subject to tax
Switching from premium visa to occupation permit
You can use the GBC to apply for an investor or professional occupation permit - you are allowed to work and live in Mauritius for a 10 year period.
You can register a GBC in Mauritius. The GBC can carry out innovation-driven activities. You can use the GBC as the vehicle through which you develop the 'high-value intellectual property'. The GBC can be the company that holds the IP and license it to the LLC and in return the GBC earns royalty fees. Under the Mauritian tax law, a company involved in innovation-driven activities benefits from an 8 year income tax holiday on the royalties from the date the innovation driven activities starts. (refer to item 34 of sub-part c of the income tax act)
Dividend income
If you a shareholder in the GBC - the GBC can issue dividend to you which is exempt from tax in Mauritius. Meaning when you are filing your individual income tax return in Mauritius - the dividend income isn't subject to tax
Switching from premium visa to occupation permit
You can use the GBC to apply for an investor or professional occupation permit - you are allowed to work and live in Mauritius for a 10 year period.
Yes, Cyprus has also been on the cards for a while now. Just need to do some due diligence and find a few good service providers that can help with the nuances of my situation.
Turns out Mauritius doesn't seem to be a good option for us practically - not having a DTA in the USA makes things really convoluted to structure, and we don't mind paying a bit of tax for a simple structure.
I can recommend you one good tax consulting company in CY
Hi @Leo Vanguard,
Some people have already given you hints, but here’s how I see your main options:
1. Set up an entity in Georgia or Kyrgyzstan – Both benefit from the old CIS double tax treaty, which has no LOB clause. Georgia is the better choice. There’s a solid CSP in this forum I’ve worked with. You’ll need minimal substance—1-2 local employees. Given your revenue, you or your wife will likely want an assistant and an accountant anyway, so just hire them there. Georgian companies are called LLCs, so you can be creative with how you present the entity in your invoices, if you know what I mean.
2A. Georgia’s Free-Zone Tech Exemption – You can apply for a reduced 5% CIT, but this requires hiring software developers, which may not be ideal if you're not in that industry. If that works, a single Georgian entity is enough.
2B. IP Structuring Alternative – If you don’t want to hire developers, hold the IP in an offshore TopCo in a jurisdiction with a DTT with Georgia --but not a GBC Mauritius company with the tax holiday exemption as some people said here, as there's no DTT, so withholding applies. Instead, structure the Georgian entity as an agent with sublicensing rights, allowing you to pass through any profits as IP income to the TopCo—minus a small amount taxed in Georgia. Good TopCo locations with strong DTTs with Georgia include: UAE (DIFC PresCo recommended, as royalties are tax-exempt), Cyprus (your IP may not qualify for the IP box, in which case it’s subject to 12.5% CIT), Malta (10% effective tax due to refunds, plus a nice place to visit). All these options require local directors and board meetings... to ensure economic substance is met, adding a minimum of €20-25K/year in costs if done properly. But if your revenue is as high as you mentioned, that’s a rounding error.
Hope this helps!
Some people have already given you hints, but here’s how I see your main options:
1. Set up an entity in Georgia or Kyrgyzstan – Both benefit from the old CIS double tax treaty, which has no LOB clause. Georgia is the better choice. There’s a solid CSP in this forum I’ve worked with. You’ll need minimal substance—1-2 local employees. Given your revenue, you or your wife will likely want an assistant and an accountant anyway, so just hire them there. Georgian companies are called LLCs, so you can be creative with how you present the entity in your invoices, if you know what I mean.
2A. Georgia’s Free-Zone Tech Exemption – You can apply for a reduced 5% CIT, but this requires hiring software developers, which may not be ideal if you're not in that industry. If that works, a single Georgian entity is enough.
2B. IP Structuring Alternative – If you don’t want to hire developers, hold the IP in an offshore TopCo in a jurisdiction with a DTT with Georgia --but not a GBC Mauritius company with the tax holiday exemption as some people said here, as there's no DTT, so withholding applies. Instead, structure the Georgian entity as an agent with sublicensing rights, allowing you to pass through any profits as IP income to the TopCo—minus a small amount taxed in Georgia. Good TopCo locations with strong DTTs with Georgia include: UAE (DIFC PresCo recommended, as royalties are tax-exempt), Cyprus (your IP may not qualify for the IP box, in which case it’s subject to 12.5% CIT), Malta (10% effective tax due to refunds, plus a nice place to visit). All these options require local directors and board meetings... to ensure economic substance is met, adding a minimum of €20-25K/year in costs if done properly. But if your revenue is as high as you mentioned, that’s a rounding error.
Hope this helps!
Those options on paper are all good, the main problem you'll have will be with banks.
I don't have any direct experience with receiving USD in Kyrgyzstan but i know from direct experience and from various people in the forum sharing their experience with Georgian banks that you'll be boggled down with AML requests.
I don't have any direct experience with receiving USD in Kyrgyzstan but i know from direct experience and from various people in the forum sharing their experience with Georgian banks that you'll be boggled down with AML requests.
Yes, in practice, it’s crucial to have strong banking relationships in tier-1 jurisdictions that can facilitate account openings for your entire setup—ideally within the same bank. I’ve successfully done this multiple times, covering Georgia, Cyprus, Malta... and more "grey" ones like Nevis, Bahamas... If someone were to take a ‘cheap’ approach—which I wouldn’t recommend given his $1-3M annual income—they could open a Georgia company account with Wise or use Revolut in Malta, for example. With their income, they must already have contacts with private banks.
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