Invoicing Clients From an Offshore Company

If you want to invoice clients from an offshore company, the first thing to settle is who is actually selling. Under Mauritian law an Authorised Company is a separate legal person. The invoice must therefore come from the company, in its registered name, and the contract behind it must be signed by the company, not by you personally.

This guide covers the practical side of billing: what an invoice should contain, which currency to use, how contracts and payment terms fit together, and what customers tend to expect. It gives general information, not advice. Where the answer depends on your facts, such as where you work or where your customers sit, a qualified adviser should look at your situation.

Who is the seller? Start with the entity

An Authorised Company is a company incorporated under the Companies Act whose central management and control sit outside Mauritius, and which carries on its business mainly outside the island. It must also have a registered agent in Mauritius, and that agent has to be an FSC-licensed corporate service provider (Management Licence). You can read the full definition on the page about what an Authorised Company is.

Three consequences matter for billing:

• The company contracts and invoices in its own name. Customers should never be asked to pay an individual for the company's services.
• The registered agent is not your billing department. Its statutory role covers filings, communications with the regulators, AML/CFT measures and record-keeping. Issuing and chasing invoices stays with you.
• Where you work shapes the company's status. A company incorporated in Mauritius is treated as non-resident for income tax purposes only if it is centrally managed and controlled outside Mauritius, and it must still file a tax return. Invoices that show the company being run from an unexpected place can create questions. See the guide on managing an Authorised Company from abroad.

What an offshore company invoice should contain

Mauritian law does not give a single template for an invoice issued by an Authorised Company to a foreign customer, and the requirements of the customer's own country may add to it. A sensible baseline, which also helps with banks and auditors, looks like this:

Two further points deserve care. First, the account named on the invoice should be in the company's name. An invoice from the company asking for payment to a personal account is one of the quickest ways to raise a flag with a bank or a customer's finance team. Second, if tax is charged or reverse charge applies, the invoice should say so in the form required by the customer's jurisdiction. The treatment of sales to customers in the European Union is covered in the guide on VAT when an offshore company sells to EU customers.

Choosing the invoicing currency

There is no rule that an Authorised Company must invoice in a given currency. The choice is commercial, and it should follow three questions:

1. In what currency does the customer prefer to pay? Invoicing in the customer's own currency usually removes friction, but it puts the exchange risk on you.
2. In what currency are your costs? If your main costs are in one currency, invoicing in that currency reduces conversion.
3. Which accounts can the company actually open? Receiving a currency requires an account able to hold it, or a provider that converts on arrival. The page on multi-currency accounts for an offshore company explains the options and their trade-offs.

Whatever you choose, state the currency on the invoice and in the contract, and keep to it. Changing the currency halfway through a contract without a written amendment is a common source of disputes. If you convert amounts for accounting, record the rate and the date you used; the company's books must stay consistent from one period to the next.

Contracts: the document that makes the invoice enforceable

An invoice is a demand for payment, not a contract. If a customer disputes the amount, what counts is the agreement that came before it. For an offshore company, a short written contract or a set of standard terms is worth more than usual, because the customer, the company and the person doing the work may all sit in different countries.

A workable agreement normally covers:

• the parties, identified by their legal names and registration details;
• the scope of work or the goods to be supplied, and how acceptance works;
• the price, the currency and the invoicing schedule;
• payment terms and what happens on late payment;
• ownership of any intellectual property produced;
• the governing law and how disputes will be handled;
• who bears taxes, duties and bank charges on the payment.

Choosing the governing law and the forum is a legal decision, not a billing detail. A customer in the European Union or the United Kingdom may insist on its own law. Have the clause reviewed before you sign if the contract is of real value.

For individuals who sell their own services through the company, there is one more point. The contract should be between the customer and the company, and the company should then engage you, by a separate agreement, to perform the work. The page on freelancing internationally through an offshore company looks at that set-up from the freelancer's side.

What customers expect from a Mauritian offshore supplier

Most customers do not object to an Authorised Company, but they do their own checks. A finance team onboarding a new supplier will often ask for some or all of the following:

• a certificate of incorporation and proof of the registered office;
• proof that the company holds its Authorised Company authorisation from the FSC;
• details of the directors and, increasingly, of the beneficial owner;
• a bank letter or statement header confirming the account name;
• a completed supplier or tax form of the customer's own.

Beneficial ownership is worth a word. Every Mauritian company must identify its beneficial owner and record the details in a separate register. The Registrar of Companies keeps a Beneficial Ownership Register, which the Companies Act makes available to competent authorities and other prescribed public authorities; it is not described there as a public register. A customer may nonetheless ask you to confirm who owns the company, as part of its own compliance checks. For more on how clients and suppliers see an offshore company, read the page on how clients perceive an offshore company.

Be ready, too, for questions about substance. A customer that is itself regulated may want to know where the people doing the work are located. Answer factually and consistently; the same answer should appear in your contract, your invoices and your company records.

Payment flow: from invoice to cash

The last step is the one that is most often neglected. The company must be able to show, years later, what each receipt was for. The registered agent keeps statutory records such as minutes and resolutions, but transaction documents are the practical responsibility of the company's directors. See the guide on accounting records for an Authorised Company for what to keep.

Common problems and how to avoid them

Mixing personal and company money

If customers pay the owner personally, the company has no income to show and the owner may create a tax problem at home. Keep every receipt inside the company and pay yourself through a proper channel, such as salary or dividends, as the guide on paying yourself from an offshore company explains.

Invoices that contradict the contract

An invoice that names a different entity, a different price or a different currency from the contract invites a dispute. Check each invoice against the agreement before it is sent.

Withholding on payments received

Some customers must deduct tax at source when they pay a foreign company. Whether this applies depends on the customer's country, the type of payment and any treaty relief, and Mauritius does not have the same treaty position as a company that is tax resident in a treaty country. See the page on withholding tax on payments received by an offshore company.

Creating a taxable presence by accident

Invoicing is not itself the problem; what matters is where the activity takes place and who concludes contracts. A representative who negotiates and signs in the customer's country may expose the company to a local taxable presence. The guide on permanent establishment risk explains the principle.

Invoicing activities that the company cannot carry on

An Authorised Company cannot, subject to exceptions in the FSC Rules, carry on the activities listed in the Fourth Schedule of the Financial Services Act: banking, professional management of collective investment schemes, financial services, corporate services such as nominee, director or secretarial services for companies, and professional trusteeship. An invoice for one of these services is not a billing question but a licensing one.

A short checklist before you send an invoice

• The seller is the company, with its full registered name and address
• The customer's legal name and address are correct
• The invoice number is unique and follows the previous one
• The description matches the contract or purchase order
• The currency and the total are stated clearly
• Tax treatment is shown as the customer's country requires
• The payment account is in the company's name
• The due date matches the agreed payment terms
• A copy is filed with the company records