Offshore Company for Australian Residents

An Australian resident offshore company in Mauritius is legal to set up, but it does not move the owner outside Australian tax. Mauritius decides how the company is regulated and taxed there. Australia decides how the owner is taxed on what the company earns. Both sets of rules apply, and the Australian side usually matters more.

This page explains the Australian questions to settle first: the controlled foreign company regime, the company residence test, what the ATO can see, and how the Mauritian rules fit around them. It is general information, not advice. The answer depends on your facts, so an Australian tax adviser should confirm it before you act.

Two systems, two different questions

A Mauritius Authorised Company is a company incorporated in Mauritius and licensed by the Financial Services Commission (FSC). By law its central management and control must sit outside Mauritius, and it needs a Mauritian registered agent, which must be an FSC-licensed corporate service provider (Management Licence). It cannot carry on the Fourth Schedule activities of the Financial Services Act, such as banking or financial services.

Mauritius treats a locally incorporated company that is centrally managed and controlled abroad as non-resident for income tax purposes (section 73A of the Income Tax Act), while still requiring a return under section 116. That is a Mauritian classification. It says nothing about how Australia sees the same company or its owner. The non-resident company page covers the Mauritian side in more detail.

Australia's controlled foreign company rules

Australia's regime for controlled foreign companies sits in Part X of the Income Tax Assessment Act 1936. In outline, it asks whether an Australian resident, alone or with associates, controls a foreign company, and whether that company earns income of a kind the rules attribute to Australian owners. Where attribution applies, the owner is taxed on a share of the company's income in the year it arises, even if no dividend is ever paid.

The detail turns on factors such as the type of income, the country where the company is resident for tax, and whether the company runs a genuine active business there. Passive income, for example from interest, royalties or related-party trading, is the usual concern. A company that only holds an owner's own consulting or online income is exactly the profile a tax authority looks at closely.

Two practical consequences follow for an Authorised Company.

• No Mauritian exemption helps here. A Mauritian exemption lowers Mauritian tax. It does not stop Australian attribution. Mauritius has no tax treaty relief designed for Authorised Companies, and the limits of an Authorised Company page explains why.
• Control is easy to meet. A company with one Australian owner, or a few Australian co-owners, will normally satisfy any control test. Look at the one-owner structure with that in mind.

The general mechanics of such regimes are covered on the controlled foreign company rules page. What follows is specific to Australia.

Can the company become an Australian tax resident?

Australia also asks where a foreign-incorporated company is resident. Broadly, a company can be treated as Australian-resident if it carries on business in Australia and either its central management and control is in Australia or its voting power is controlled by Australian-resident shareholders. This is a separate test from the CFC rules, and the two can lead to very different results.

Because an Authorised Company must have its central management and control outside Mauritius, the place where decisions are really taken is the key fact. If the owner, an Australian resident, makes the strategic decisions from Sydney or Perth, the company's central management may be in Australia in practice. The company would then face two problems at once: it would be at odds with the Mauritian requirement of management outside Mauritius only in form, and it would be exposed to Australian company tax residence.

This is also why permanent establishment risk deserves attention. A foreign company directed from Australia, with staff or a fixed place of business there, can be taxable in Australia on its profits regardless of its Mauritian licence.

What the ATO can see

An Australian owner should assume the structure is visible. Several channels carry information.

1. Your own return. Australian residents report foreign income and certain interests in foreign entities. An undeclared company is a compliance problem, not a privacy feature.
2. Beneficial ownership records. Every Mauritian company must identify its beneficial owner and any nominee and record them in a separate register: full name and residential address, national identity or passport number, nationality, and the holding structure up to the ultimate beneficial owner (Companies Act 2001, section 91(3A), as updated on 15 May 2026). The Registrar of Companies keeps a Beneficial Ownership Register open to competent authorities and prescribed public authorities. The Companies Act does not describe it as a public register. Read more on owner privacy.
3. Bank information. Under the Common Reporting Standard, Mauritian financial institutions report accounts held by non-residents to the Mauritius Revenue Authority each year, for exchange with treaty partners. An Australian-resident owner of a company account can expect that information to reach the ATO through that framework.
4. Provider records. The registered agent files returns and keeps records, and applies anti-money-laundering controls (section 71A(8) of the Financial Services Act). Corporate service providers are also reporting persons under the FIAMLA.

None of this is unusual, and none of it is a reason to avoid Mauritius. It is a reason to plan on full disclosure.

How Mauritian rules fit around the Australian ones

Mauritian relief does not remove the Australian charge, but it affects the numbers.

• Dividends. Dividends paid by a Mauritian-resident company are exempt for the recipient under the Income Tax Act, with no withholding tax on them. Whether an Australian shareholder is taxed on the dividend, or has already been taxed through attribution, is an Australian question. See paying yourself from an offshore company.
• Foreign tax credit. Mauritius gives credit for foreign tax paid on income taxed abroad (section 77), but not where a partial exemption has been claimed on that foreign-source income. The reverse question, whether Australia credits Mauritian tax paid, depends on Australian rules and the nature of the tax.
• Mauritian tax in detail. Rates and exemptions are set out on the Authorised Company taxation page and are not repeated here.

Mauritius and Australia have a tax treaty, but an Authorised Company is not designed to use treaty benefits. Do not assume that the treaty reduces Australian tax on the company's profits.

Practical points before you incorporate

Consider whether the structure has a commercial purpose beyond tax. A company that really contracts with clients, holds its own bank account, keeps records and has decisions taken by directors outside Australia is easier to defend than a name on a register. Compare it with simpler options on the Australian-style alternatives page, and test it with the tax exposure self-check.

• Ask an Australian adviser whether the CFC rules would attribute the company's income to you
• Confirm where the company's key decisions will really be taken, and by whom
• Check whether the activity is permitted for an Authorised Company
• Decide how the company will be banked and how the account will be reported
• Keep records of the company's own transactions, separate from your personal affairs
• Plan how profits will reach you and how each step is taxed in Australia

For help finding a licensed provider, use the contact form; the request is passed to an FSC-licensed corporate service provider (Management Licence). Remember that a Mauritian provider can advise on Mauritian law, not on your Australian tax position.