I noticed that a lot of Nigerian startups incorporate their holding companies in Mauritius. Why do you think so? Is it necessary?
Will love to know as well
Mauritius has a favorable tax regime for foreign companies. It is what tax lawyers refer to as a tax haven. What this means effectively is that Nigerian startups who incorporate (holding company) in Mauritius or other tax havens (Delaware, Bermuda, Cayman Island etc.) can effectively structure their transactions and business in a way to avoid taxes in other countries in which they are located.
The intricacies and structuring are a bit deeper but what they doing is called Tax Planning or Tax Avoidance which is completely legal. More than 60% of Fortune 500 Companies are incorporated in Delaware, a tax haven in U.S. A lot of these Nigerian startups are trying effectively trying to reduce their taxes or actually pay nothing in taxes.
I am a Tax and Compliance Lawyer at Sidebrief (www.sidebrief.com) and we assist startups in tax planning, market entry and compliance.
Wow. this is an eye opener
Thank you @Eunice_Olopade, this is informative.
This so much helps. Sometime back I read Nigerian companies with revenue less than #25 million are exempted from tax, is this still valid?
@luckyhenry Yes, it is still valid, the new finance act exempts companies with a revenue of less than N25m from company income tax.
@Eunice_Olopade thanks… I’ve learnt something new
In addition , if you plan a future IPO , how the hell on earth will you pull it off with the way things are done here in Niaja. e.g the bureaucracy to have your company quoted on our stock exchange alone will drive you NUTS…trust me u go think twice.
Wow, this came in really handy. I would definitely reach out. Thanks
I am involved in helping folks set up their companies. One of the main reasons for this is less to do with a low tax regime ( noting that start ups dont really generate profits for a while ) but more about Mauritius being a recognised International Financial Centre. In the eyes of potential investors having a company domiciled in an IFC helps with fund raising drives. Additionally the banking and finance system in Mauritius is sound and efficient.
I am contactable on [email protected] and welcome helping start ups
Hey Eunice, your response was richly said, I really nee your help, contact me ASAP [email protected]
Hey Patel, I already contacte you with [email protected] address carrying MET YOU ON TECHPOINT as subject, reply ASAP as you can