Offshore Company in France

1. Why France?

France possesses the fifth largest economy by nominal GDP eighth largest economy by purchasing power parity. France is the largest state in the Europe behind Russia and Ukraine, and has a very good infrastructure and communication networks: high speed trains (TGV) network, Euro star. France is also the top tourist destination worldwide, receiving 82 million foreign tourists annually.

2. Legal Framework

The French Legal System is constituted of a set of written and codified laws. The French legal system is characterized by the principle of separation between legislative, executive and judicial powers.

     The French legal system is divided into:

1. Public law- subdivided into several branches among which: constitutional law, administrative law, finance law, European law, and on public procurement law - and
2. Private law - divided into many branches among which: civil law, criminal law, company law, labor law.

3. Banking

The financial and banking sector plays an important role in the French economy. In late 2008, 36 French credit and investment institutions were listed on the Stock Exchange, and over the last ten years this sector has represented on average 2.7% of France's GDP. In 2008, 722 credit institutions were operating in France among which there were 394 banks with a network of 27,500 branches.

    However, over the last decade this sector has undergone a deep restructuring which has resulted in a significant decrease of the number of credit organizations. Consequently, today nearly half of the operating credit institutions belongs to only six groups.

4. Financial Regulatory Authority

French banking activity is regulated by different bodies, among which the French central bank (Banque de France), which is responsible for verifying the stability of the banking and financial system, and the respect of the compulsory legal; requirements in matter of financial ratios.

   The French central bank is part of the European Central Bank (ECB) and the European. It participates in the most important international debates: international Monetary Fund, meetings of G7 and G20, meetings of the Basel Committee on banking supervision.

    Beside the French national Bank, the financial Markets Authority (AMF) is an independent agency whose mission is to ensure the protection of saving investments and financial markets at the European and International level.

5. Taxation

5. a. Corporate Tax

The standard corporate tax rates amounts to 33.33%. An additional social security levy of 3.3%, calculated on the basis of the reference amount of corporate tax less Euros 763,000 is applied at the standard rate exceeds Euros 2,289,000.

      For small businesses (under conditions) the corporate tax rate amounts to 15% on the First Euros 38,120 profit, and then 33.33% on the remaining profits.

      Capital gains on the sale of shareholdings are totally exempt, except for the 5% representing expenses.

        Losses can be carried forward indefinitely. It is also possible to deduct the current year's losses from income in the 3 previous years (carry back). Moreover French businesses may be subject to others taxes such as: taxes on immovable, social taxes, etc..

5. b. Personal Tax Rates

Resident individual of France is taxed on his worldwide income while non resident individual of French is taxed on his individual French source income (or, if he is not resident of country having signed tax treaty with France and dispose of residence in France, on three times rental value if higher than their French source income) subject to tax treaty provisions.
    Individual income tax is assessed per household. total net income is total of net results of each taxpayer's income categories. Rates vary from 0% to maximum of 40% for 2010.


5. c. Social Security


The French Social Security system consists in two main statutory schemes:

1. The compulsory general scheme for all workers, covering health insurance unemployment insurance and pension scheme. Contributions are calculated on the basis of percentage rates decided at national level and are borne partly by employers and partly by employees. The total contributions rate of the general scheme varies depending on wages, from 19% to 21% of the wages for the employees, and  30% to 42% of the wages for the employers.
2. The health insurance scheme and the compulsory basic and supplementary pension schemes for self employed workers, which covers non-salaried workers.

The contribution rate depends on the basis of calculation (earnings) used and represents the average of 30% of gross income.


5. d. Customs & Excise Duties


As an EU member State, France customs regulations follow European Union Customs Procedures. In general goods from other EU member's state are subject to VAT, while good from outside the EU are subject to Customs and Excise rules.
   Exemptions of customs duties may apply to merchandise that merely passes through France, that stays in France only temporarily, that is imported in order to be re exported later after modification in France, or that is re imported after having been exported. Excise taxes apply to intra community transactions bearing on specific products such as mineral oil, alcohol, alcoholic beverages and tobacco. Said taxes become due when products are put on market at rates varying depending on nature of products.


5. e. V.A.T.


Value-added tax (VAT) is noncumulative tax levied at every stage of production, distribution, delivery of goods or services. Burden of tax is generally borne in final consumer.
Normal VAT rate is 19.6% and low rate is 5.5%.


5. f. Tax Incentives:


1. Research tax Credit- The French Research tax credit (RTC) is very attractive. It is the first support measure to encourage Research & Development in France. It represents a budget of Euro 3 bn in 2008 and concerns nearly subject to income tax, spending money on eligible expenses on research is entitled to benefit from the Research tax credit.


2.  Innovative young companies- Specific measures have been taken to help new companies whose R&D expenses represent at least 15% of their tax deductible costs. Conditions: small and medium-sized Companies with less than 250 employees, whose sales are inferior to Euro 50 m and total assets inferior to Euro 43 m. The incentive is granted for a period of eight years from the setting up of the company.


3.  Other Incentives- Besides the Research tax credit and the Innovative new Companies incentive, other tax credits are granted to certain sectors of activity: film and audiovisual industry, fashion and leather industries.

6. Main Types of Corporate Forms

1. Corporations in General - French corporations are either "societe anonyme" ("S.A."), "societe par actions simplifiee" ("S.A.S."), "societe en commandite par actions" ("S.C.A.") or "societe a responsabilite limitee" ("S.C.A.") or  "societe a responsabilite limitee" ("S.A.R.L."). Liability of shareholders of these companies is limited to amount of their investment.
2. Foreign corporations -  Such corporations desiring to do business in France through branch must comply with exchange control regulation. Foreign corporations doing business in France are subject to same taxation as French corporations for profits made in France, but with special provisions with regard to dividends.
3. Partnerships - French partnerships are either simple ("societes en commandite simple"), or special by shares ("societes en commandite par actions"). there is also form of association similar to joint venture ("societe en participation"). All forms of partnerships except "societe en participation" are subject to bankruptcy proceedings.

7. Company Incorporation

There are no administrative restrictions on foreign investments in France, but some business sectors require special declarations or permits, and some activities are regulated or require the possession of diplomas.

    Companies wishing to prospect for business in France can start by hiring one employee or opening a 'liaison office'. These two solutions do not involve the creation of a permanent establishment and there is no tax impact, as long as the company does not make any profit in France.

    If the company wants to open a permanent establishment in France, it can open a branch or a subsidiary. Both of them are permanent establishments subject to taxation in France, and must be registered with the registry of trade and companies ("Registre du commerce et des societes").

   The registration of a business (branch or subsidiary) takes 7 days on average. The cost of administrative formalities depends on the option. For a LTD, cost is approximately Euro 85 plus approximately Euro 250 for publishing a notice in the legal gazette.

8. Reporting & Auditing

1. Date of Accounts closure- There is no legal obligation in France concerning the date of closure of the accounts for business concerns. Actually most companies close their accounts on 31th December. For other entities including tax payers the fiscal year corresponds to the calender year. The tax declaration must be sent to the tax authorities within a 3- monthly period if the accounts are closed on 31st December. 
2. Appointment of an external auditor- This is compulsory in the case of joint stock companies and in some other types of entities (charities, foundations, or any type of organisation benefiting from public subsidies, mutual funds...) French SAS owned by Companies. The appointment of an external auditor is also compulsory for the other types of companies under certain conditions (revenue, number of employees, total balance sheet).

9. Special Notes / Country Update

1. Credit to consumer- Since 2003, the protection in consumer credit contracts has been strengthen. In compliance with EC Directive of February 16, 1988 any advertisement or any credit offer shall include statement of annual (and not monthly) percentage rate of charge.
2. Trust - Since February 19, 2007, France provides itself with a new legal vehicle allowing to create arrangements equivalent to the trusts of other countries: the "Fiducie".The French Fiducie  allows an independent patrimony to be created that is not that of the settler (the constituent) but which does not form part of that of the fiduciary either. Indeed, the latter is obliged to keep the transferred property, rights and securities separate from its own patrimony, which was not possible under former French Law.

Double Taxation Agreement

France has double Taxation Treaty with different countries:

·                     Argentina

·                     Austria

·                     brazil

·                     Bulgaria

·                     Cyprus

·                     Czech Rep.

·                     Germany

·                     Hungry

·                     India

·                     Indonesia

·                     Israel

·                     Italy

·                     Japan

·                     Kuwait

·                     Malaysia

·                     Malta

·                     Mauritius

·                     Mexico

·                     Morocco

·                     Netherlands

·                     Poland

·                     Portugal

·                     Romania

·                     Russia

·                     Singapore

·                     Slovenia

·                     Spain

·                     Switzerland

·                     Tunisia

·                     Turkey

·                     UAE

·                     UK

·                     USA

·                     Venezuela

Offshore Company in China

1. Why China?

China is a developing country and it's populations are more than 1,3 billion. Since Deng Xiaopin mastered China's political power in 1978, China has started to implemented political and economic reforms. Since then, annual growth rate of Chinese economy is 10%. China has formulated a series of laws and policies which are favorable to foreign investments. At the same , China's local governments provide various preferential conditions for foreign enterprises. China's large population and vast area provide unlimited business opportunities for foreign enterprises to invest in China.

2. Legal Framework

China's highest legal body is the National people's Congress, one of its duties is to approve laws submitted by relevant departments. The local governments may set up various regulations and rules which are suitable to the local areas. Foreign enterprises may establishing companies and run their business in China without violating Chinese laws, local regulations and rules. The foreign companies should pay taxes according to Chinese tax laws.

3. Banking

China's central bank is the people's Bank of China. China has 4 big state owned commercial banks, they are bank of China, Industrial and Commercial Bank of China Construction Bank. All these 4 banks handle deposits and loans of RMB and foreign currency. China Development Bank is also a state-owned bank, its main function is to serve significant long term national economic development strategy through handling deposits and loan of RMB and foreign currency. China has many private banks, some of them handle deposits and loans of RMB and foreign currency and some only handle deposits and loans of RMB.

4. Financial Regulatory Authority

China has the State-owned Assets Supervision and Administration Commission of the State Council, China Securities Regulatory Commission, these 3 institutions main function is to supervise and manage China's financial markets and they have their own branches in each province of china.

5. Taxation

5. a. Corporate Tax

The income tax rate for domestic and foreign enterprise is uniformly 25%; small-profit enterprise's income tax rate was 20%; high-tech enterprise income tax rate is 15%.


5. b. Personal Tax Rates 


Personal income tax rate has nine levels from 5% to 40%. Tax exemption amount of personal income tax for Chinese employee is RMB Yuan 2,000, for foreign employee is RMB Yuan 4,800.


5. c. Social Security


Social security tax includes five categories: life insurance tax, medical insurance tax, unemployment insurance tax, industrial injury insurance tax and birth insurance tax. These 5 Taxes account for 42.3% of personal wage and they are borne by company and individual together, the company will pay 32.1% and individual will pay 10.2%.


5. d. Customs & Excise Duties


The imported goods need to pay custom duties. the tax rates are decided by goods customs duty is 17%. The excise duties will be levied for the following four categories of goods:

1. special goods, which over-consumed will be harmful to health, social order and ecological environment (Tobacco, Alcohal, Firecrackers, Fireworks);
2. Luxury goods and other non-necessary life goods (Precious jewelry and jade jewelry, cosmetics);
3. High energy-consumed luxury goods (Cars, Motorcycles);
4. Non-reproduced and non-alternative resource goods. (Gasoline, Diesel).

Also imported and exported diamonds need to go to the Shanghai Diamond Exchange for their custom clearance procedures, other ports can import and export diamonds.


5. e. V.A.T.


China's value added tax rates are different according to different taxpayers. Small scale taxpayers tax rate is 3%, special industry's tax rate is 13% and general taxpayer's tax rate is 17%.


5. f. Tax Incentives


The central and local governments have formulated various tax preferential policies to encourage foreign investment in China.

6. Main Types of  Corporate Forms

China's main types of Chinese companiesL: State-owned company, joint-stock company, limited liability company, partnership firm and sole proprietorship. Different limited liability companies registered capitals will not be less than the following minimum amounts:

1. The minimum registered capital of limited company engaging in production & operation company is RMB Yuan 500,000;
2. The minimum registered capital of company engaging in commodity wholesale is RMB Yuan 500,000;
3. The minimum registered capital of commercial; retail based company is RMB Yuan 300,000;
4. The minimum registered capital of company engaging in technology development, consulting and service is RMB Yuan 100,000.
5. The minimum registered capitals of joint-stock company and listed company are RMB Yuan 10 million and 50 million respectively.

7. Company Incorporation

The procedures for foreign investor to establish a company ion China are as follows:

Establishment of project: foreigner should have its foreign business license(registered certificate), ID card or power of attorney and fill in form of establishing enterprise in china (3 days after all materials are submitted);

Approval of the feasibility study report and articles of association(10 days);

Business license is approved by the local industry and Commerce Administration (2 days).

8. Reporting & Auditing

The financial year of Chinese company is from January 1 to December 31, foreign company can also choose a different financial year. China's tax authorities annually audit the financial statements of Chinese and foreign companies.

9. Special Notes / Country Update

China has carried out tax reforms several times, the Chinese and Foreign companies enjoy the same favorable tax rates and treatments.

Double Taxation Agreement

China has double taxation treaty with different countries:

·                     Austria

·                     brazil

·                     Bulgaria

·                     Cyprus

·                     Czech Rep.

·                     France

·                     Germany

·                     Hungry

·                     India

·                     Indonesia

·                     Israel

·                     Italy

·                     Japan

·                     Kuwait

·                     Malaysia

·                     Malta

·                     Mauritius

·                     Mexico

·                     Morocco

·                     Netherlands

·                     Poland

·                     Portugal

·                     Romania

·                     Russia

·                     Singapore

·                     Slovenia

·                     Spain

·                     Switzerland

·                     Tunisia

·                     Turkey

·                     UAE

·                     UK

·                     USA

·                     Venezuela

Offshore Company in Mauritius

1. Why Mauritius?

The attraction to Mauritius comes as a premium to the level of business that can be done on the island or through its system. It has about 37 Double Taxation Avoidance Treaties amongst which growth nations such as India, China, South Africa and mature economies such as UK, France And Germany. In its annual survey the World Bank has ranked Mauritius 17th and number 1 in Africa as the place to do business.

2. Legal Framework

Mauritius has the Legal system that is derived from the British. The Legal framework is a mix of British and France texts. Most laws are in English, including the Mauritius constitution. The Civil Code is based on the old French Law, the ' Code Napoleon '.

3. Banking

The banking sector is regulated by the Bank of Mauritius. The globally known banks such as Barclay's, HSBC, Standard Bank, Standard Chartered, Caissed'Epargne, Deutsche Bank are present Banking regulations follows Basle II model.

4. Financial Regulatory Authority

The Financial Services Commission (FSC) is the regulator for all non-banking Financial Services.

5. Taxation

5. a. Corporate Tax

Domestic companies having activities in Mauritius 15%, global companies which are tax resident 3% , international companies which are not tax resident are exempt from Income Tax.

5. b. Personal Tax Rates

15% Individuals are exempt annually Rs 255,000 and Rs 465,000 varying on number of dependents.

5. c. Social Security

Employers' contribution of basic salary up to Rs 975. Employees contribution of basic salary up to Rs 459.

5. d. Custom & Excise Duties

Luxury goods can attract up to 100% customs duty. Electronic goods between 15% & 30%. No VAT on basic essential foodstuff.

5. e. V.A.T.

VAT is 15%.

5. f. Tax Incentives

Companies having a Global Business Licence have an automatic tax credit of 80% on the base tax of 15%, hence leaving a rate of tax payable of 3%. Domestic tax Law may also recognize as credit all actual foreign tax paid.

6. Main Types Of Corporate Forms

• Company limited by shares
• Company limited by guarantee
• Limited life company
• Protected cell company
• Company with a Global Business Licence 1 (offshore)
• Company with a Global Business Licence 2 (international co)
• Partnership
• Trust

7. Company Incorporation

It takes minimum 3 days to incorporate a domestic company which can trade and have activities on the island. The cost of setting up is around Euro 700. For a Global Business Licence 1 (GBL 1) (cannot trade on the island) company it takes about 3 weeks to incorporate with a cost of about EUR 6,000. A Global Business Licence 2 (GBL 2) company (international company) is incorporated with in about 2 weeks at cost of about Eur 3,000.

8. Reporting & Auditing

Mauritius has been one of the first countries in the world to adopt IFRS since 2001. Domestic companies with turnover of less than Rs 50m ( Eur 1.25m) need not prepare full financial statements under IFRS. GBL 1 need full IFRS compliant financial statement. However, GBL 2 need prepare only a prescribed financial summary. The Auditing framework is International Standards on Auditing.

9. Special Notes / Country Update

Mauritius is the Largest medium for FDI into India because of the double tax avoidance treaty agreement which it has with India. The main incentive with this being that the company investing in India is not Liable to Capital Gains Tax. The Mauritius Rupee is stable vis a vis the major currencies such as the US Dollar (US D 1 : Rs 30) and EURO (Eur 1: Rs 40). There is no exchange control in Mauritius. 

Offshore Company in UAE

1. Why The United Arab Emirates

The U.A.E are politically stable, economically strong and socially open minded. An excellent business infrastructure, a zero tax environment and a liberal labor law complete the U.A.E.'s profile for an ideal business location. The U.A.E with its member Emirates Dubai and Abu Dhabi are centrally located in the middle of the Gulf region . Dubai International Airport ranks top in the provision of worldwide direct flight connections. Travel distances (hours of flight) from and to major places of business are within comfortable reach.

-  Europe 6 hours

-  Hong kong 8 hours

-  Bombay 2 hours

2. Legal Framework

When contrasted with other Arab states, such as Saudi Arabia for instance, the UAE has comparatively very liberal laws. The country has a civil law jurisdiction. However, Shari's or Islamic Law is applied to aspects of family law, inheritance and certain criminal acts. A federal court system applies yo all emirates except Dubai and Ras Al Khaimah, which are not fully integrated into the federal judicial system. All emirates have secular courts to rule about criminal, civil, and commercial matters, and religious disputes.

In the UAE the establishment of the civil and criminal courts resulted in diminishing the role of the Sharia Courts. Nevertheless, the competence of the Sharia Courts in some emirates, particularly Abu Dhabi, was substantially expanded later on to include, in addition to matters of personal status, all types of civil and commercial disputes as well as serious criminal offences. Therefore, in addition to the Civil Courts. each of the seven emirates maintains a parallel system of Sharia Courts which are organised and supervised locally.

3. Banking

There are around 50 banks in the U.A.E. international as well as local banks, as HSBC, Citibank, Standard Chartered, Barclay's, Deutsche Bank, EmiratesNBD, National Bank of Abu Dhabi, offering large range of state of the art banking services. The U.A.E. have no restrictions on import and export funds to and from the country.

4. Financial Regulatory Authority

The Central Bank Law establishes five principal categories of institutions in the UAE - commercial banks, investment banks, financial establishments, financial intermediaries, and monetary intermediaries - all of which must be licensed by both the central bank and the local licencing authorities. In addition to these five categories, current practice in the individual Emirates permits the licencing of financial or investment consultants. These consultants are not required to obtain a central Bank Licence.

5. Taxation

5. a. Corporate Tax

There is no corporate taxation with in the UAE except for foreign bank branches, oil and petrochemical companies.

5. b. Personal Tax Rates

There is no personal tax with in the UAE.

5. c. Social Security

There is no social security system with in the UAE. The only mandatory insurance is a medical insurance for the employees of the company.

Research incentives - In case any UAE National is employed in the private sector, then the employer must pay monthly contribution to a pension fund at the rate of 17.5% of the contribution salary (12.5% by the employer and 5% by thew employee).

5. d. Customs & Excise Duties

Under the terms of the Gulf Co-operation Council (GCC) regulations (comprising the member states of UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain), a unified customs tariff of 5% of the c.i.f. value applies to the taxable imports. All existing taxes and duties on imports with in the GCC member states have been abolished. Tobacco and tobacco products are subject to a 100% customs duty, and for alcohol the rate is 50%. There is no Central Excise Duty.

5. e. V.A.T.

There is no VAT in the U.A.E.

5. f. Tax  Incentives

Free Zones - There are more then 25 Free zone with in the U.A.E offering various benefits such as: 

- 100% foreign ownership

- 100% capital and profit repatriation

- no import or export (outside the GCC)

- guarantee of no personal or corporate income tax for 15/50 years (renewable)

- no foreign exchange controls 

- no trade barriers or quotas

- liberal labour laws

Offshore Company - For offshore companies there is no taxation at all. They are not allowed to carry out business activities within the U.A.E.

6. Main Types Of Corporate Forms

Limited Liability Companies (LLC) is the most common form for a local company. Free zone companies are usually Free zone Company (FZCO - two or more shareholders). Since several years some of the emirates allowing the incorporation of Offshore Companies (LTD). The LLC is a legal person, its partners (at least 51% UAE Nationals) are not personally liable for the company or the other partners. The share capital has to amount to a minimum of AED 150,000 depending on the Emirates, each share has to amount to AED 1,000.

       The FZE or FZCO are legal persons with in one of the U.A.E.'s Free zone, shareholders are not liable for the company, the share capital has to amount to minimum of AED 150,000 according to the regulations of the Free zone.

       The LTD is a legal person with in one of the U.A.E.'s Free zones allowing the registration of Offshore Companies, Shareholders are not liable for the company, the share capital has to amount to minimum of AED 10,000 according to the regulations of the Free zone. Shares can have nominal values. Bearer shares are not allowed.

7. Company Incorporation

The LLC legally comes into being with the entry into the corporate register. Next to an application form containing all company-relevant information, signed by all shareholders and attested to by notary, several documents are necessary such as the articles of association. After the notarial attestation are signed, the entry of the LLC in the corporate register takes one to two weeks.

      The FZE or FZCO legally comes into being with the entry into the corporate register. Next to an application form containing all company-relevant information, signed by all shareholders (there is no need for a notarization; for an FZCO the articles of association are necessary). The entry of the FZE or FZCO in the corporate register takes several days.
    The LTD legally comes into being registered with the regulator. The entry of the LTD in the corporate register takes 1 day.

8. Reporting & Auditing

Local Companies have to have the annual financial statement audited and reported to the Government. Most Free zones require an audited financial statement submitted to the Free zone Authority.

Offshore Company in UAE

1. Why The United Arab Emirates

The U.A.E are politically stable, economically strong and socially open minded. An excellent business infrastructure, a zero tax environment and a liberal labor law complete the U.A.E.'s profile for an ideal business location. The U.A.E with its member Emirates Dubai and Abu Dhabi are centrally located in the middle of the Gulf region . Dubai International Airport ranks top in the provision of worldwide direct flight connections. Travel distances (hours of flight) from and to major places of business are within comfortable reach.

-  Europe 6 hours

-  Hong kong 8 hours

-  Bombay 2 hours

2. Legal Framework

When contrasted with other Arab states, such as Saudi Arabia for instance, the UAE has comparatively very liberal laws. The country has a civil law jurisdiction. However, Shari's or Islamic Law is applied to aspects of family law, inheritance and certain criminal acts. A federal court system applies yo all emirates except Dubai and Ras Al Khaimah, which are not fully integrated into the federal judicial system. All emirates have secular courts to rule about criminal, civil, and commercial matters, and religious disputes.

In the UAE the establishment of the civil and criminal courts resulted in diminishing the role of the Sharia Courts. Nevertheless, the competence of the Sharia Courts in some emirates, particularly Abu Dhabi, was substantially expanded later on to include, in addition to matters of personal status, all types of civil and commercial disputes as well as serious criminal offences. Therefore, in addition to the Civil Courts. each of the seven emirates maintains a parallel system of Sharia Courts which are organised and supervised locally.

3. Banking

There are around 50 banks in the U.A.E. international as well as local banks, as HSBC, Citibank, Standard Chartered, Barclay's, Deutsche Bank, EmiratesNBD, National Bank of Abu Dhabi, offering large range of state of the art banking services. The U.A.E. have no restrictions on import and export funds to and from the country.

4. Financial Regulatory Authority

The Central Bank Law establishes five principal categories of institutions in the UAE - commercial banks, investment banks, financial establishments, financial intermediaries, and monetary intermediaries - all of which must be licensed by both the central bank and the local licencing authorities. In addition to these five categories, current practice in the individual Emirates permits the licencing of financial or investment consultants. These consultants are not required to obtain a central Bank Licence.

5. Taxation

5. a. Corporate Tax

There is no corporate taxation with in the UAE except for foreign bank branches, oil and petrochemical companies.

5. b. Personal Tax Rates

There is no personal tax with in the UAE.

5. c. Social Security

There is no social security system with in the UAE. The only mandatory insurance is a medical insurance for the employees of the company.

Research incentives - In case any UAE National is employed in the private sector, then the employer must pay monthly contribution to a pension fund at the rate of 17.5% of the contribution salary (12.5% by the employer and 5% by thew employee).

5. d. Customs & Excise Duties

Under the terms of the Gulf Co-operation Council (GCC) regulations (comprising the member states of UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain), a unified customs tariff of 5% of the c.i.f. value applies to the taxable imports. All existing taxes and duties on imports with in the GCC member states have been abolished. Tobacco and tobacco products are subject to a 100% customs duty, and for alcohol the rate is 50%. There is no Central Excise Duty.

5. e. V.A.T.

There is no VAT in the U.A.E.

5. f. Tax  Incentives

Free Zones - There are more then 25 Free zone with in the U.A.E offering various benefits such as: 

- 100% foreign ownership

- 100% capital and profit repatriation

- no import or export (outside the GCC)

- guarantee of no personal or corporate income tax for 15/50 years (renewable)

- no foreign exchange controls 

- no trade barriers or quotas

- liberal labour laws

Offshore Company - For offshore companies there is no taxation at all. They are not allowed to carry out business activities within the U.A.E.

6. Main Types Of Corporate Forms

Limited Liability Companies (LLC) is the most common form for a local company. Free zone companies are usually Free zone Company (FZCO - two or more shareholders). Since several years some of the emirates allowing the incorporation of Offshore Companies (LTD). The LLC is a legal person, its partners (at least 51% UAE Nationals) are not personally liable for the company or the other partners. The share capital has to amount to a minimum of AED 150,000 depending on the Emirates, each share has to amount to AED 1,000.

       The FZE or FZCO are legal persons with in one of the U.A.E.'s Free zone, shareholders are not liable for the company, the share capital has to amount to minimum of AED 150,000 according to the regulations of the Free zone.

       The LTD is a legal person with in one of the U.A.E.'s Free zones allowing the registration of Offshore Companies, Shareholders are not liable for the company, the share capital has to amount to minimum of AED 10,000 according to the regulations of the Free zone. Shares can have nominal values. Bearer shares are not allowed.

7. Company Incorporation

The LLC legally comes into being with the entry into the corporate register. Next to an application form containing all company-relevant information, signed by all shareholders and attested to by notary, several documents are necessary such as the articles of association. After the notarial attestation are signed, the entry of the LLC in the corporate register takes one to two weeks.

      The FZE or FZCO legally comes into being with the entry into the corporate register. Next to an application form containing all company-relevant information, signed by all shareholders (there is no need for a notarization; for an FZCO the articles of association are necessary). The entry of the FZE or FZCO in the corporate register takes several days.
    The LTD legally comes into being registered with the regulator. The entry of the LTD in the corporate register takes 1 day.

8. Reporting & Auditing

Local Companies have to have the annual financial statement audited and reported to the Government. Most Free zones require an audited financial statement submitted to the Free zone Authority.

OFFSHORE COMPANY IN MAURITIUS

1. Why Mauritius?

The attraction to Mauritius comes as a premium to the level of business that can be done on the island or through its system. It has about 37 Double Taxation Avoidance Treaties amongst which growth nations such as India, China, South Africa and mature economies such as UK, France And Germany. In its annual survey the World Bank has ranked Mauritius 17th and number 1 in Africa as the place to do business.

2. Legal Framework

Mauritius has the Legal system that is derived from the British. The Legal framework is a mix of British and France texts. Most laws are in English, including the Mauritius constitution. The Civil Code is based on the old French Law, the ' Code Napoleon '.

3. Banking

The banking sector is regulated by the Bank of Mauritius. The globally known banks such as Barclay's, HSBC, Standard Bank, Standard Chartered, Caissed'Epargne, Deutsche Bank are present Banking regulations follows Basle II model.

4. Financial Regulatory Authority

The Financial Services Commission (FSC) is the regulator for all non-banking Financial Services.

5. Taxation

5. a. Corporate Tax

Domestic companies having activities in Mauritius 15%, global companies which are tax resident 3% , international companies which are not tax resident are exempt from Income Tax.

5. b. Personal Tax Rates

15% Individuals are exempt annually Rs 255,000 and Rs 465,000 varying on number of dependents.

5. c. Social Security

Employers' contribution of basic salary up to Rs 975. Employees contribution of basic salary up to Rs 459.

5. d. Custom & Excise Duties

Luxury goods can attract up to 100% customs duty. Electronic goods between 15% & 30%. No VAT on basic essential foodstuff.

5. e. V.A.T.

VAT is 15%.

5. f. Tax Incentives

Companies having a Global Business Licence have an automatic tax credit of 80% on the base tax of 15%, hence leaving a rate of tax payable of 3%. Domestic tax Law may also recognize as credit all actual foreign tax paid.

6. Main Types Of Corporate Forms

• Company limited by shares
• Company limited by guarantee
• Limited life company
• Protected cell company
• Company with a Global Business Licence 1 (offshore)
• Company with a Global Business Licence 2 (international co)
• Partnership
• Trust

7. Company Incorporation

It takes minimum 3 days to incorporate a domestic company which can trade and have activities on the island. The cost of setting up is around Euro 700. For a Global Business Licence 1 (GBL 1) (cannot trade on the island) company it takes about 3 weeks to incorporate with a cost of about EUR 6,000. A Global Business Licence 2 (GBL 2) company (international company) is incorporated with in about 2 weeks at cost of about Eur 3,000.

8. Reporting & Auditing

Mauritius has been one of the first countries in the world to adopt IFRS since 2001. Domestic companies with turnover of less than Rs 50m ( Eur 1.25m) need not prepare full financial statements under IFRS. GBL 1 need full IFRS compliant financial statement. However, GBL 2 need prepare only a prescribed financial summary. The Auditing framework is International Standards on Auditing.

9. Special Notes / Country Update

Mauritius is the Largest medium for FDI into India because of the double tax avoidance treaty agreement which it has with India. The main incentive with this being that the company investing in India is not Liable to Capital Gains Tax. The Mauritius Rupee is stable vis a vis the major currencies such as the US Dollar (US D 1 : Rs 30) and EURO (Eur 1: Rs 40). There is no exchange control in Mauritius.