How can an offshore company in Mauritius trade international equity markets including India

I know it is possible to establish an offshore company in Mauritius and open the same company’s bank account as well. Now if I capitalize this company with my capital and want to trade international markets including India as an offshore company then what brokers allow that ?

Do I need to look for offshore brokers in Mauritius ? If I were to approach Zerodha as an offshore company wanting to trade the Indian markets is it possible @nithin ?

Is anyone using this route to trade Indian markets but not as an individual trader but via an offshore company. There are obvious tax benefits apart from also having access to many other markets that an Indian resident does not legally have.

Would love to hear about this

Hi @Trader_Junkie, Sorry I dont know the answer to your query but I think you must have researched on this aspect so I am just asking you on this…

Did you compare Mauritius and Singapore for setting an offshore entity to gain access to global markets? Between the two which seemed as a better proposition (from the perspective of global access, cost and ease of business set-up) ? Cheers !

Effort and ease of setup wise Mauritius is easier also the tax rate is 0% for all income generated by the offshore company outside of Mauritius (India, US, European markets in this case). Singapore isn’t a tax haven, an offshore company in Singapore will pay anywhere between 12%-20% tax. Also there are stringent reporting norms in Singapore, Mauritius offshore companies have NO requirement of filing and reporting. Also, since Mauritius is relatively an insignificant economy it bends over backwards to make one feel welcome as compared to Singapore.

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Spoke with Interactive Brokers - they have a presence in Mauritius and legally provide access to 31 major markets across the world. They also confirmed that an offshore company in Mauritius can be their client !

Now my next steps are to meet with a SEBI/Tax consultant to confirm

  1. that F&O is indeed a business income that can be taken out of India to the offshore company and brought back into India as Forex remittance and not attract any tax.

  2. Income generated out of India for the offshore company is considered as foreign income for an Indian citizen or not ? If it is not, then I will just give up trading the Indian markets and trade Europe, APAC and US.

  3. For this if I need to live outside India for 180 days I will do so with the eventual intent of giving up Indian Citizenship.

I know people will jump upon me here calling me ungrateful about my disrespect towards India, but trust me , doing any business peacefully in India is difficult not just because of the ridiculous taxation but the tax mafia that makes it difficult for anyone to live peacefully.

pls update us if you get the answers from the sebi / tax consultant

Let me summarize if I get the gist of your question. You are an Indian resident, earning income in India and want to invest in India by routing your funds through an offshore jurisdiction, to avoid taxes.

First, this is called round tripping. It’s not allowed from Mauritius or Singapore. I doubt any of the countries would want to put at stake the double taxation agreement with India for your sake.

If you were an NRI or PIO wanting to invest their income earned outside India thorough e.g. Mauritius onto India eventually: tax in Mauritius is at the rate of 15% on worldwide income. So dividends and coupon earned would be taxable at 15%. There are no capital gains tax in Mauritius, but nevertheless capital gains is taxed in India already. So any proceeds you receive would be net.

You also have to demonstrate substance requirement in Mauritius to be tax resident and enjoy applicable tax credits. Your “offshore” company will need to open a bank account in Mauritius. You cannot deposit your money in cash/cheque and certainly not Indian Rupees. So no, Mauritius is NOT an insignificant economy which will bend over backwards to fulfill your every requirement.

I do not sure what you mean or where you got the scoop that Mauritius offshore companies have NO requirement of filing and reporting. But “Offshore” companies set up in Mauritius have the obligation to prepare and file audited financial statements every year, amongst other reporting requirements.

I have rebutted each one of your points. I’d suggest you get proper investment advice from more credible professionals in future. Good luck!

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For the benefit of all - My statements in the opening post are verified and cross-checked with the registrar of companies in Mauritius. A small hint - check up on formation and taxation laws of GBC-2 type of company.

@djx please educate yourself before you become a keyboard ninja - apart from this your post really does not deserve any response.

India rank - 141 , Mauritius - 25 - Enough said

I doubt I would turn towards you to educate myself. All that I said in my post are absolute facts. Let’s talk something concrete. Forget the investment part. If you are able to open a GBC-2 type company in Mauritius, I’ll be happy to accept that you are an amazing investment expert and will tip in INR 1crore in your account. I’m a man of my words. Send me the certificate of incorporation once you manage to set up the company. If you can’t do it, I don’t need anything in exchange. It’ll just prove who need to educate themselves. Do we have a deal?

I too have been trying sinc march of last year (2020) to trade international stock options/leaps as interactive brokers has banned indian users from doing the same since last year.
one can easily trade international stocks of upto 60 exchanges from various apps like interactive brokers, IND money etc.
my query is ifi incorporate an offshore entity in mauritius can i trade leaps /options from the same?