Case Study: A Consultant Invoicing European Clients

A consultant with European clients who considers an offshore company usually asks one question: does the structure leave me better off after VAT, withholding and home-country tax? This case study follows a fictional consultant, Maya, through that question. The facts are invented for illustration; the legal references are real. Nothing here is advice on a specific situation.

The case: who Maya is and what she wants

Maya is a freelance operations consultant. She lives in a European country, works remotely and sells day-rate projects to mid-sized companies in several EU states. Today she invoices as a sole trader. A peer suggested a consultant company outside the EU, and she is looking at a Mauritius Authorised Company.

Her goals are modest: keep invoicing B2B, receive payments in euros, and understand what really changes. Her questions map to four areas:

1. Does the invoice carry VAT?
2. Do EU clients withhold anything from the payment?
3. Does she create a taxable presence where she lives or where her clients are?
4. What is left once all the layers are counted?

Step 1: what the Authorised Company can and cannot do

Under section 71A of the Financial Services Act 2007, a company owned or controlled mainly by non-citizens, trading mainly outside Mauritius and with its central management and control outside Mauritius must apply to the FSC for an Authorised Company authorisation. The application goes through a FSC-licensed corporate service provider (Management Licence), which then stays on as the company's registered agent in Mauritius.

Consulting for foreign clients fits that profile. What the company may not do is carry on the Fourth Schedule activities, such as banking, financial services or acting as a corporate service provider. Pure advisory work for businesses abroad is a different category; see what business an Authorised Company can run for the boundaries.

The label matters for Maya's own situation. The statute asks that central management and control sit outside Mauritius. Maya, who lives in Europe, will be the decision-maker. That is the intended design of the Authorised Company, and it is also the root of the tax questions below.

Step 2: the invoice and VAT

The first practical point is that VAT depends on where the customer is and whether it is a business, not on where the consultant's company is registered. For a typical cross-border B2B service, EU rules generally place the supply at the customer's location, and the customer accounts for the VAT itself under a reverse-charge mechanism. The details differ by country and by service type, and they must be confirmed for each client.

What Maya needs to do:

• Collect each client's VAT number and check it before invoicing.
• State on the invoice that the supply is a business-to-business service and that the reverse charge applies, where the client's country allows this.
• Keep proof that the customer is a business.

Two other VAT layers exist:

• Mauritius VAT. Mandatory registration is triggered when taxable supplies exceed MUR 3 million a year, a threshold applicable since 1 October 2025 (it was MUR 6 million before). Maya's services are supplied abroad, so this is mostly a point to confirm with the registered agent.
• EU registration. If a client's country treats her services differently, or if she sells to consumers, she may have to register for VAT in a member state. Our page on VAT for EU customers covers that scenario.

Step 3: withholding on payments

Withholding tax is a deduction a payer makes before paying a foreign supplier. Whether an EU client does so depends on the client's country, the type of service and any treaty. Mauritius has treaties, but an Authorised Company does not benefit from them in the usual way; see the limits of an Authorised Company.

For Maya this means:

• Ask each client's finance team whether they apply withholding to a service fee paid to a Mauritius company.
• Expect some to ask for a certificate of tax residence, which an Authorised Company may not be able to supply in the form they want.
• Treat a withholding request as a commercial risk: a client who withholds and cannot be reimbursed lowers her net result.

The sums are explained in withholding tax on payments received. Maya should have the answers in writing before she changes her invoicing entity.

Step 4: taxable presence

The sharpest risk is not VAT but where the company is treated as managed. If Maya runs the company from her kitchen table in Europe, her home country may consider that the company has a taxable presence there, or that it is simply resident there. The same applies if she habitually concludes contracts in a client's country. This is the subject of our page on permanent establishment risk, so we only flag it here.

Two further home-country regimes can apply regardless of the structure:

• Rules on controlled foreign companies, discussed in CFC rules.
• Personal taxation of the owner when profits are paid out; see how the owner is taxed at home.

The Authorised Company statute does not override any of these. It governs the company's status in Mauritius, not Maya's position in her country of residence.

Step 5: the net result, layer by layer

Maya's net result depends on layers that nobody can add up without her country of residence. The table below does not give a percentage, because none of them is sourced for her situation. It shows where each cost or tax sits and what is known about it.

The fee figures are costs Maya pays whatever her revenue is. They are cheap if her fees are large and heavy if her activity is small, which is why the annual fee page matters before she signs.

The first annual fee is prorated by quarter of grant: USD 1,400 for July to September, USD 1,050 for October to December, USD 700 for January to March, USD 350 for April to June. A late payment raises the charge: USD 1,750 within a month of the due date, USD 2,100 between one and three months, and USD 2,800 between three and six months.

Provider charges for the registered agent, accounting and bank fees come on top. Those are commercial fees set by each provider and are not covered by the figures above.

Where the comparison with the sole-trader route stands

Maya compares two paths. Neither can be ranked without her tax residence.

Our page on sole trader versus company goes deeper on that choice.

Step 6: what Maya does before she signs

On the third step, Maya checks the provider's licence with the FSC licence checklist. Registered agents handle filings, communications with the FSC, the Mauritius Revenue Authority and the Registrar, anti-money-laundering measures and record keeping. They are regulated entities, so they will ask Maya to identify herself as beneficial owner and to prove it.

Beneficial ownership

Every Mauritian company must identify its beneficial owner and any nominee, and record them in a separate register: full name, residential address, national identity or passport number, nationality and the holding structure up to the ultimate beneficial owner. The Registrar of Companies keeps a Beneficial Ownership Register that competent authorities can access; the Companies Act does not describe it as public. For Maya, privacy from clients is therefore reasonable, but privacy from authorities is not. See ownership privacy.

Banking

Banks vet consultants with EU clients closely: they want contracts, invoices and an explanation of where the work is performed. If Maya cannot show real activity, an application can be refused; our page on why banks refuse offshore accounts explains the pattern.

What the case shows

• VAT is usually the smallest worry for B2B consulting. The reverse charge, if properly documented, leaves the VAT administration with the client.
• Withholding is a client-by-client question, and it can erase the benefit of the structure.
• The home country decides whether the company is accepted as managed from Mauritius. If it is not, the Mauritius structure adds cost with little benefit.
• The Authorised Company suits a consultant who truly works for clients abroad, has the substance of real activity and has taken advice about residence. It is not a shortcut.

If Maya wants to compare structures before deciding, a good next read is who should use an Authorised Company. Readers who want help from a licensed provider can use the contact form.