Forex license in Mauritius

At present, obtaining a Forex license in Mauritius stands as an exceptional solution for brokers or traders in this field, facilitating a firm foothold in the global Forex market. Many are drawn to the favorable conditions offered to those operating in this sphere, as Mauritius is a recognized financial center in the Indian Ocean. This underscores reliability and the ability to gain trust from clients, partners, and investors.

Advantages of Acquiring a Forex License in Mauritius:

• Mauritius is renowned for its authoritative and transparent financial environment.
• The country boasts modern telecommunications and a reliable banking system.
• Mauritius witnesses rapid growth in the financial services sector.
• The Financial Services Commission (FSC) provides clear instructions and support to licensed entities.
• Legislative guarantees safeguard corporate confidentiality.
• Relatively low capital requirements for licensing.
• Foreign legal entities not residing in Mauritius enjoy a 0% tax rate, while offshore companies are subject to a minimal corporate tax rate of 3%.
• Over 30 agreements alleviate issues of double taxation.
• Financial maneuverability and capital movement freedom.
• Flexibility for remote operations control.
• Company registration typically concludes within 3-4 weeks, with license issuance taking around three months.

Regulatory Framework Overview of Forex Licenses in Mauritius:

The Financial Services Commission of Mauritius (FSC), established in 2001, serves as the principal regulatory body overseeing the non-banking financial sector and international business.

To ensure the stability and resilience of Mauritius’ financial system, the FSC takes necessary measures to prevent crime and protect investors in the non-banking financial market. Examining the regulatory framework for Forex trading, attention is drawn to the following laws:

• The Financial Services Act of 2007, which defines rules for financial sector companies, requires FSC licensing, and mandates adherence to strict audit, transparency, and risk management rules.
• The Securities Act of 2005, regulating the securities market, demands compliance with authorization standards, transaction transparency, and reporting on securities transactions.
• The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act of 2009, introducing measures against money laundering and terrorism financing, requires regulated organizations to conduct comprehensive checks, track transactions, and report suspicious activity.

It’s worth noting that companies must obtain a brokerage license in Mauritius if they intend to provide services in the Forex market. This license enables operations with various currencies and trading in precious metals.

Moreover, there exists an International Business License (CBL1), for which an application must be submitted to the FSC. It confirms a company’s international activity, providing investor protection for activities conducted in currencies other than the Mauritian rupee.

Opportunities Offered by a Forex License in Mauritius:

Obtaining a brokerage license in Mauritius through the Financial Services Commission (FSC) unlocks a range of operational opportunities for financial firms in Mauritius. With this license, a company gains the right to:

• Offer personalized portfolio management services.
• Engage in trading securities for potential sale.
• Provide clients with expert investment advice and strategic recommendations.
• Facilitate operations with various securities, including currencies, stocks, and other asset classes.

Types of Forex Licenses in Mauritius

The Financial Services Commission of Mauritius offers several types of forex licenses tailored to meet specific requirements of participants in the financial market. These licenses facilitate access to various market and financial operations. Notable types of forex licenses in Mauritius include:

Investment Dealer License:

• Enables operation of Forex trading platforms and provision of exchange and trading services.
• Required capital: approximately $22,500 USD (1,000,000 Mauritian Rupees).
• Application fee of $750 USD (7,500 MUR); Annual license fee of $2,500 USD (75,000 MUR).

Investment Advisor License:

• Allows offering investment consultancy, market analysis, and trading strategy recommendations.
• Required capital: around $22,500 USD (1,000,000 Mauritian Rupees), equivalent to the investment dealer license.
• Application fee of $750 USD (7,500 MUR); Annual license fee of $2,500 USD (75,000 MUR).

Global Business License (GBL):

• Permits a broad range of financial activities, including Forex trading and investment management.
• Minimum capital required, approximately 1 Euro (45 Mauritian Rupees).
• Application fee of about 460 Euros (23,000 MUR); Annual fee of around 1,800 Euros (90,000 MUR).

Forex Licenses in Mauritius and Vanuatu

When obtaining a forex license in Mauritius, companies must establish a brokerage firm, open an account in a local bank, and appoint two local Mauritians with financial expertise. Key personnel, such as an anti-money laundering officer, must be hired, and a physical office must be provided. Additionally, meticulous financial documentation, a minimum capital of $18,000 USD, and other requirements should be met.

Similarly, when applying for a forex license in Vanuatu, trust in the founders and their financial knowledge must be confirmed. Financial stability must be demonstrated, along with adherence to anti-money laundering and counter-terrorism financing policies, and a minimum capital of $50,000 USD is required. The process involves an independent audit, risk management, and extensive documentation.

Requirements:

• Registration of a brokerage firm.
• Opening a corporate bank account in Mauritius.
• Appointment of at least two Mauritian directors.
• Founders must have reliable financial experience.
• Finding a local office and hiring staff, including an anti-money laundering officer and accountant under official labor contracts.
• Regular checks.
• Maintaining and providing financial reporting upon request.
• Implementing a strict anti-money laundering and counter-terrorism financing policy.
• Minimum shareholder capital of $18,000 USD.
• Comprehensive business plan.
• Holding regular board meetings in Mauritius to comply with local laws.

Stages of Obtaining a Forex License in Mauritius

Initial Documentation:

• Preferred company name, copies of passports of all shareholders and directors, proof of residence (e.g., utility bills) for directors and shareholders, brief (1-2 pages) description of the business model, and company structure diagram.

Company Formation and Team Setup:

• Company registration and preparation of corporate documents.
• Hiring an anti-money laundering reporting officer (MLRO), MLRO deputy, and two local directors.
• Specifying the registered office and company secretary.

Licensing Process:

• Compiling documents for the application for a Forex broker license in Mauritius and AML/KYC policies.
• Submitting the application to the FSC and ongoing communication until the license is issued.

Opening a Corporate Account:

• Analyzing and selecting banks/EMIs, comparing the bank’s risk appetite with the client’s AML policy.
• Collecting necessary client documents for account opening, including fund movements, source of wealth, and purpose of account opening.
• Providing support throughout the account opening process.

Creating a Forex Company

Establishing a Global Business Company (GBC) in Mauritius is a strategic move to access the Forex market, providing a flexible corporate structure, favorable tax environment, and the right to license Forex activities in accordance with the Companies Act 2001. The creation process varies in duration depending on the complexity of the business and readiness of documents.

Key Requirements

• Minimum of one shareholder and two resident directors in Mauritius.
• A company secretary resident in Mauritius, qualified as per Mauritian legislation.
• Compliance with initial capital requirements specific to the desired Forex license in Mauritius.
• Registered office in Mauritius for official correspondence and documentation.
• Management and control from Mauritius to attain tax residency status with non-resident tax exemption.
• Corporate bank account in a Mauritian bank.
• Administration conducted by a licensed management company for liaising with the FSC.
• Preparation and audit of mandatory financial statements in Mauritius.

To Register a GBC

1. Engage a management company.
2. Choose a compatible and available company name.
3. Gather the necessary documentation.
4. Cover registration fees.
5. Submit documents and applications to the Companies Registrar.
6. Open a corporate bank account.
7. Register for taxation with the Mauritius Revenue Authority (MRA) and employment registration with relevant authorities.

Required Documents for Registration

• Memorandum and Articles of Association.
• Copies of passports of directors, secretary, and shareholders.
• Company registration application and name reservation notice.
• Consent of director, secretary, and shareholder.
• Confirmation of registered office in Mauritius.
• Comprehensive business plan detailing trading strategies, market analysis, risks, and compliance measures.
• Verified financial statements reflecting company capital compliance and regulatory requirements.

Taxation of Brokerage Companies in Mauritius

For brokerage companies aiming to minimize tax costs, Mauritius has become one of the most attractive locations with a competitive tax system. The island applies a general corporate tax rate of 15% under the Income Tax Act 1995. One key reason for this attractiveness is the reduced rate of 3% for offshore companies.

Tax Benefits:

• Tax incentives provide temporary tax exemptions for qualifying companies.
• Tax exemption for foreign Forex companies not resident in Mauritius for tax purposes.
• International tax agreements with many countries to prevent double taxation and establish tax protocols.
• Dividend income and capital gains are not taxed in Mauritius.

Among the obligations of brokers in Mauritius is compliance with local tax laws, ensuring the filing of tax returns and payments, crucial to prevent fines, interest, or penalties.

Frequently Asked Questions

• How long does the process of obtaining a Forex license in Mauritius typically take?

The procedure takes about three months. The timeframe may be slightly longer if the regulator requires clarification of data or requests additional documents during the application process.

• What is the validity period of a Forex license in Mauritius?

Forex licenses in Mauritius typically have an initial validity period of one year. It is essential for the licensee to continue strictly adhering to all regulatory requirements and paying all necessary fees for annual license renewal after the initial period expires.

• What challenges might one encounter when obtaining a Forex license in Mauritius?

The process of obtaining a brokerage license in Mauritius can be challenging due to stringent regulatory requirements. Additionally, you must remember to comply with regulatory requirements, financial and infrastructure standards, as well as capital and commission obligations.

• Is it possible to have non-resident directors in Mauritius?

Companies can have non-resident directors. Foreign nationals are permitted to be directors of a business registered in Mauritius. It is advisable to seek professional advice as special regulatory requirements may apply.

In conclusion, if you’re considering venturing into the Forex market and need expert guidance to navigate the regulatory landscape, Taurus Legal Group stands ready to assist you every step of the way. Our experienced team can streamline the process of setting up your Forex company in Mauritius, ensuring compliance with all legal and regulatory requirements. Contact us today to explore how we can help turn your Forex ambitions into a reality.