investment guide - africa legal network...‣ an extensive tax treaty network with several...

ALGERIA

BOTSWANA

ETHIOPIA

GUINEA

KENYA

MADAGASCAR

MALAWI

MAURITIUS

MOROCCO

MOZAMBIQUE

NIGERIA

RWANDA

SUDAN

TANZANIA

UGANDA

ZAMBIA

INVESTMENT GUIDE2017/2018

INVESTMENT GUIDE 2017/2018 | MAURITIUS i

About ALNALN is an alliance of leading corporate law firms currently in sixteen key African jurisdictions, including the continent’s

gateway economies. We have a presence in Francophone, Anglophone, Lusophone and Arabic speaking Africa: Algeria,

Botswana, Ethiopia, Guinea, Kenya, Madagascar, Malawi, Mauritius, Morocco, Mozambique, Nigeria, Rwanda, Sudan,

Tanzania, Uganda and Zambia. The firms are recognised as leading firms in their markets and many have advised on ground

breaking, first-of-a-kind deals. ALN also has a regional office in Dubai, UAE.

ALN firms work together in providing a one-stop-shop solution for clients doing business across Africa. ALN’s reach at the

local, regional and international levels, connectivity with key stakeholders, and deep knowledge of doing business locally and

across borders allows it to provide seamless and effective legal, advisory and transactional services across the continent.

Our high level of integration is achieved by adherence to shared values and an emphasis on excellence and collaboration. We

share sector-specific skills and regional expertise thus ensuring our clients benefit from the synergies of the alliance.

ALN won the “African Network/Alliance of the Year” award at the 2018 African Legal Awards, which recognised ALN as the

leader in the market having demonstrated continent-wide innovation, strategic vision, client care and business winning.

Chambers Global has consistently ranked the ALN alliance as Band 1 in the “Leading Regional Law Firm Networks – Africa-

wide” category

ALN In Mauritius

ALN Mauritius | BLC Robert & AssociatesBLC Robert & Associates is one of the leading independent business law firms in Mauritius. The firm has five partners

and over 30 locally and internationally trained fee earners. BLC Robert serves a diverse client base including regional and

international financial institutions, corporations, funds and public sector bodies, among others.

The core strength of BLC Robert is its unique and concurrent understanding of both the public and private sector, which

enables it to offer distinct service, with industry knowledge, commercial awareness and legal expertise under one roof.

The firm prides itself on offering practical commercial solutions to complex transactions and legal issues. BLC Robert is

committed to understanding its clients’ business as this is the key to providing commercially sound solutions.

As a testament to the excellence of its services, BLC Robert has been on the list of the Chambers and Partners prestigious

global ranking of law firms since 2008 and is now simultaneously ranked as a First Tier firm and a Band 1 firm, respectively,

by both IFLR and Chambers and Partners.

BLC Robert is described as ‘a top firm’ and its lawyers as being ‘thorough and professional’ and ‘attentive and responsive’.

According to Chambers Global, BLC Robert ‘enters the table on the back of stellar market recommendation’ and its strength

is its ‘in-depth experience of financial instruments, tax matters and corporate work’.

“A highly reputed firm with one of the largest teams on the island.” – Chambers Global 2018

CAPITAL CITY:Port Louis

POPULATION:1.264 Million (2017 World Bank

Data)

GDP:USD 13.338 Billion (2017 Word

Bank Data)

AREA:2,040 km2

PRESIDENTDr Ameenah Gurib-Fakim, G.C.S.K.,

C.S.K., Ph.D. D.Sc.

GOVERNMENT:Parliamentary Democracy

TIMEZONEGMT + 4

CURRENCYMauritian Rupee (MUR)

LANGUAGESEnglish, French, Creole, Bhojpuri

DRIVES ONThe Left

CALLING CODE+230

TOP LEVEL DOMAIN.mu

INVESTMENT GUIDE 2017/2018 | MAURITIUS iii

CONTENTS

OverviewPolitical Overview 1

Economic Overview 1

Bilateral & Multilateral Treaties 1

Regulatory Environment 2

Investment PromotionInstitutes Governing Investment Promotion 3

Investment Incentives 3

TaxPersonal Income Tax 4

Capital Gains Tax 5

Withholding Tax 5

Other tax 5

Stamp & Transfer Duty 5

Transfer Pricing & Thin Capitalisation 5

Doing BusinessAccounting Principles 6

Industrial Relations 6

Exchange Control 6

Imports and Exports 6

Corruption 6

Competition 7

Consumer Protection 7

Real Property 8

Legal Forms of Incorporation 9

Intellectual Property 12

Dispute Settlement 12

Industry SectorsAgriculture 13

Banking & Financial Services 13

Energy 14

Manufacturing 14

Mining 14

Telecommunications 14

Tourism 14

Key DevelopmentsFinancial Services 15

Natural Resources 15

Other Developments 15

INVESTMENT GUIDE 2017/2018 | MAURITIUS 1

Political OverviewMauritius is a parliamentary representative, democratic

republic. The President is the Head of State and the

Prime Minister is the Head of Government. Legislative

power is vested in both the government and a Unicameral

Parliament, and the Supreme Court is the highest judicial

authority. The Mauritian government is elected on a

five-year basis. The most recent elections took place on

10th December 2014. Mauritius has a long tradition of

political and social stability and is internationally recognised

for its well-established democracy. According to the

2017 Mo Ibrahim Index of African Governance, which

measures governance using a number of different variables,

Mauritius’ government earned the highest ranking among

African nations for safety and rule of law, sustainable

economic opportunity and human development, and

also earned the highest score in the index overall for the

eleventh consecutive time.

Economic OverviewMauritius has one of the most successful, competitive

and diversified economies in Africa. The country’s success

has been built on a free market economy. The economy

is based on tourism, textiles, sugar and financial services.

With one of the highest Gross Domestic Product (GDP)

per capita in Africa, Mauritius is one of only four African

nations with the highest Human Development Index rating.

According to the 2017 Index of Economic Freedom of the

U.S. based Heritage Foundation, Mauritius leads Sub-

Saharan Africa in economic freedom and is ranked 21st

worldwide with an overall score of 74.7.

Bilateral & Multilateral TreatiesMauritius is a member of the African Union,

Commonwealth of Nations, La Francophonie, the World

Trade Organisation (WTO), the African Caribbean Pacific-

European Union Cotonou Agreement, the Common Market

for Eastern and Southern Africa (COMESA), the Southern

African Development Community (SADC), the Indian Ocean

Rim - Association for Regional Cooperation and the Indian

Ocean Commission.

Mauritius has entered into bilateral trade agreements

with Pakistan, Turkey and USA, and it has 26 Investment

Promotion and Protection Agreements (IPPAs) currently

in force with Barbados, Belgium/Luxembourg Economic

Union, Burundi, China, Czech Republic, Egypt, Finland,

France, Germany, India, Indonesia, Kuwait, Madagascar,

Mozambique, Pakistan, Portugal, Republic of Congo,

Republic of Korea, Romania, Senegal, Singapore, South

Africa, Sweden, Switzerland, Tanzania, U.K. and Northern

Ireland. IPPAs with the following countries are awaiting

ratification: Benin, Cameroon, Comoros, Gabon, Ghana,

Guinea Republic, Kenya, Mauritania, Nepal, Rwanda,

Swaziland, Chad, Turkey, Zambia and Zimbabwe. These

IPPAs provide for free repatriation of investment capital

and returns and guarantee against expropriation. They

provide for a most favoured nation rule with respect to

treatment of investors, and compensation for losses in case

of war and armed conflict. They also include arrangements

for the settlement of disputes between investors and the

contracting states.

Mauritius has concluded 43 double taxation avoidance

treaties and is party to a series of treaties under

negotiation. The 43 treaties currently in force are with

Australia, Barbados, Belgium, Botswana, Croatia, Cyprus,

Egypt, Sri Lanka, France, Germany, Guernsey, India, Italy,

Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia,

Overview

OVERVIEW


Malta, Monaco, Mozambique, Namibia, Nepal, Oman,

Pakistan, Bangladesh, China, Rwanda, Senegal, Seychelles,

Singapore, South Africa, Qatar, Swaziland, Sweden,

Thailand, Tunisia, Uganda, United Arab Emirates, United

Kingdom, Zambia, Zimbabwe and Congo. Two tax treaties

with Ghana and Cape Verde have been ratified. Six tax

treaties, with Gabon, Kenya, Morocco, Jersey, Nigeria and

Russia are awaiting ratification; four treaties, with Cote

D’Ivoire, Gibraltar, Malawi and The Gambia, are awaiting

signature; and 19 treaties are being negotiated, with

Algeria, Canada, Czech Republic, Greece, Hong Kong,

Lesotho (new), Montenegro, North Sudan, Portugal, Iran,,

Saudi Arabia, Spain, St. Kitts & Nevis, Tanzania, Vietnam,

Zambia (New), Burkina Faso, Mali and Yemen.

Regulatory EnvironmentDuring the last five years, the government has significantly

reformed trade, investment, tariff and income tax

regulations, simplifying the framework for doing business.

Mauritius has a long-standing tradition of government and

private sector dialogue which allows the private sector to

effectively voice its views on the development strategy of

the country. The Joint Economic Council, the coordinating

body of the Mauritian private sector, is a key vehicle in this

regard. A Central Procurement Board, established under

the Public Procurement Act, of 2006 oversees all forms

of procurement by public bodies. The World Economic

Forum’s 2017-2018 Global Competitiveness Report places

Mauritius first in Africa and 45th in the world in terms of

competitiveness.

OVERVIEW


Investment Promotion

Institutes Governing Investment PromotionA transparent and well-defined investment code and

legal system have made the foreign investment climate in

Mauritius one of the best in the region. The foreign direct

investment for 2016 was at USD 350 million. Investment

in Mauritius is governed by the Investment Promotion

Act, 2000 (Investment Act). Investment regulations are

consistent with the WTO’s Agreement on Trade Related

Investment Measures. The Mauritius Board of Investment

(MBOI) is a government agency which aims to promote and

facilitate investment in Mauritius and acts as a one-stop

agency for business registration, and as the facilitator for

all forms of investment in Mauritius as well as guiding

investors through the necessary processes for doing

business in the country.

Investment IncentivesInvestment incentives are applied uniformly to both

domestic and foreign investors. Mauritius offers the

following incentives to investors:

‣ A flat corporate and income tax rate of 15 percent;

‣ Tax free dividends;

‣ No capital gains tax;

‣ Up to 100 percent foreign ownership;

‣ Exemption from customs duty on equipment;

‣ Free repatriation of profits, dividends, and capital;

‣ No minimum foreign capital required;

‣ Fifty percent annual allowance on declining balance

for the purchase of electronic and computer

equipment; and

‣ An extensive tax treaty network with several

countries.

‣ Eight-year income tax holiday to:

» Companies set up on or after 1 July 2017

involved in innovation-driven activities, in

respect of their income derived from intellectual

property assets developed in Mauritius.

» Companies incorporated after 8 June 2017

engaged in the manufacture of medical devices,

pharmaceutical and high tech products.

» Companies engaged in exploitation and use of

deep ocean water for providing air conditioning

installations, facilities and services.

‣ Exemption for a period of 5 income years as from the

income year in which a corporation was issued any of

the following licences, on or after 1 September 2016,

by the Financial Services Commission and subject to

conditions prescribed under the Income Tax Act 1995:

» a Global Treasury Activities Licence;

» a Global Legal Advisory Services Licence;

» an Investment Banking Licence;

» an Overseas Family Office (Single) Licence; or

» an Overseas Family Office (Multiple) Licence.

‣ Investors can obtain free-port licences under the

Investment Act, under which persons may be exempt

from income tax or subject to tax at 15 percent under

specified conditions. A non-citizen is eligible for a

residence permit upon the purchase of a villa under

the Property Development Scheme when he has

invested more than USD 500,000 or its equivalent in

any freely convertible foreign currency; and

‣ Investors, their spouses and dependents are granted

resident permits to live in Mauritius when a residential

property is acquired for a price exceeding USD

500,000.

INVESTMENT PROMOTION


Tax

Personal Income TaxResident companies and businesses are taxed on

worldwide income. Non-residents are taxed only on

Mauritius-source income. A company is resident if it is

incorporated in Mauritius or its central management and

control is in Mauritius. An individual is resident if domiciled

in Mauritius, spends at least 183 days of the tax year in the

country or has a combined presence of at least 270 days

in that tax year and the two preceding tax years. Losses

may be carried forward for five years, except for losses

arising from annual allowances on capital expenditure

incurred after 1st July 2006. The carry-back of losses is not

permitted.

No. Tax Rate

1 Corporate tax

‣ General

‣ Tax incentive companies

15%

2 Dividends Dividends paid by a Mauritian-resident company are exempt from

income tax. Foreign dividends are taxable

3 Interest Taxed as ordinary income

4 Royalties Taxed as ordinary income

5 Fees Taxed as ordinary income

No. Tax Rate

1 Corporate tax 15%

2 Category 1 Global Business Licence

(GBL) companies

3% maximum

3 Dividends Dividends paid by a Mauritian-resident company are exempt from

income tax

4 Interest Taxed as ordinary income, subject to available exemptions and tax

credits

5 Royalties Taxed as ordinary income, subject to available exemptions and tax

credits

Income tax is levied on resident companies as follows

Income tax is levied on non-residents as follows

TAX


No. Tax Rate

6 Fees

‣ director’s fees

‣ consultant’s fees

15% (Tax is withheld at source and is final)

15%

Capital Gains TaxNo capital gains tax is levied in Mauritius.

Withholding TaxInterest and royalties are taxed as ordinary income, withheld at the source, subject to available exemptions.

Other taxThe basic rate of Value Added Tax (VAT) is 15 percent.

Certain goods and services are subject to VAT at zero

rate and others are exempt from VAT. The registration

threshold is approximately USD 171,000 (MUR 6 million).

Employers are required to make pay-related social security

contributions.

Stamp & Transfer DutyStamp duty is levied on each document presented for

registration to the Registrar General or Conservator

of Mortgages. A duty of five percent is levied on share

transfers of a company which includes in its assets

any freehold or leasehold property while 20 percent is

charged when a company has leasehold rights on state

land. No duty is payable on the transfer of shares quoted

on the Stock Exchange of Mauritius and on the shares

of a Category 1 Global Business Licence (GBL) company.

Transfer duty of five percent and land transfer tax of five

percent is payable on the sale or transfer of immovable

property.

Transfer Pricing & Thin CapitalisationMauritius does not have transfer pricing regulations.

However, the Income Tax Act, 1995 (ITA), provides that

transactions between related parties should be at market

value. Similarly, Mauritius does not have thin capitalisation

rules but the ITA provides that the Director-General may

disallow interest expense payable to shareholders under

certain conditions.

TAX


Doing Business

Accounting PrinciplesMauritius applies International Accounting Standards and International Financing Reporting Standards.

Industrial RelationsThe Constitution and the law of Mauritius provide for the

right of workers to form and join unions of their choice

without prior authorisation or excessive requirements, and

workers exercise this right in practice.

The National Remuneration Board (NRB) sets minimum

wages for non-managerial workers, although most unions

negotiate wages higher than those set by the NRB. In

February 2009, the Employment Rights Act and the

Employment Relations Act came into force.

The new legislation provides for a Workfare Program

under which workers who have been laid off will benefit

from government financial assistance for up to twelve

months and opportunities for training to increase their

employability.

Mauritius participates actively in the annual International

Labour Organisation (ILO) conference in Geneva, and

adheres to ILO conventions protecting workers’ rights.

Work permits are required for expatriates seeking

employment in Mauritius. In general, work permits are

granted provided that a contract of employment is in

place and local citizens do not possess the necessary

expertise. An occupation permit giving a right to a three

year residence period can be granted to an investor setting

up business with an annual turnover exceeding USD

55,500 (approximately MUR 2 million). Investors investing a

minimum of USD 500,000 (approximately MUR 18 million),

in a qualifying business activity, are entitled to a permanent

residence permit valid for a period of ten years.

Exchange ControlExchange controls were suspended by the Finance Act,

1994, consequently, no approval is required for the

repatriation of profits, dividends and capital gains earned

by a foreign investor in Mauritius.

Imports and ExportsFrom 1 July 2009, all permits relating to imports and

exports, except those considered essential, were

suspended. The Mauritius Freeport (free-trade zone) was

established in 1992 as a customs-free zone for goods

destined for re-export.

CorruptionMauritius ranks 54th worldwide, and sixth in Africa as per

Transparency International’s Corruption Perceptions Index

for 2017 behind Botswana, Seychelles, Cape Verde Rwanda

and Namibia. The principal anti-corruption legislation in

Mauritius is the Financial Intelligence and Anti-Money

Laundering Regulations, 2003, Financial Intelligence and

DOING BUSINESS


Anti-Money Laundering Act, 2002 and the Prevention of

Corruption Act, 2002.

The Mauritian Financial Intelligence Unit (the FIU) was

established under the Financial Intelligence and Anti-

Money Laundering Act, 2002. It is the central Mauritian

agency for the request, receipt, analysis and dissemination

of financial information regarding suspected proceeds of

crime and alleged money laundering offences as well as

the financing of any activities or transactions related to

terrorism to relevant authorities.

The FIU also plays an integral part in the investigation and

detection of financial crimes. It collects, processes, analyses

and interprets all information disclosed to and obtained

by it in the process of combating money laundering and

terrorist financing. The FIU became a member of the

Egmont Group in July 2003 and has since been frequently

elected as the regional representative of African FIUs on

the Egmont Committee.

In 2002, the Government adopted the Prevention

of Corruption Act, which led to the setting up of an

Independent Commission Against Corruption (ICAC).

ICAC consists of an anti-corruption unit, an anti-money

laundering unit and a corruption prevention and education

division. It has the power to investigate any act of

corruption and any matter that may involve the laundering

of money or suspicious transaction referred to it by the FIU

and can confiscate the proceeds of corruption and money

laundering.

CompetitionThe Mauritius Competition Act, 2007, regulates

competition law in Mauritius, and is aimed at preventing

monopolistic pricing and restricting collusion in consumer

markets. The Competition Commission (the Commission)

reviews mergers in three instances:

‣ Where all the parties to the merger, supply or acquire

goods or services of any description, and will following

the merger, together supply or acquire 30 percent or

more of all those goods or services in the market;

‣ Where one of the parties to the merger alone supplies

or acquires, prior to the merger, 30 percent or more of

goods or services of any description in the market; or

‣ Where the Commission has reasonable grounds to

believe that the creation of the merger situation

has resulted in, or is likely to result in, a substantial

lessening of competition within any market for goods

or services.

Where the merger falls within the above categories, parties

should apply to the Commission for guidance. There are no

filing fees..

Consumer ProtectionConsumer protection in Mauritius is regulated by the

Consumer Protection (Price and Supplies Control) Act and

the Consumer Protection Act. The Fair Trading Act also

makes provisions with respect to measures to ensure fair

trading in Mauritius and the prevention of practices that

mislead or confuse consumers. The Consumer Protection

Unit (CPU) is a specialised section within the Ministry of

Commerce and Consumer Protection of Mauritius which

caters for the protection of consumers.

The CPU enforces Mauritius’ various consumer protection

laws, and aims to provide overall consumer satisfaction and

security, through:

‣ Educating consumers on their rights and

responsibilities through print media, public

discussions, etc.;

‣ Settling disputes between traders and consumers by

mutual agreement or through the court process; and

‣ Amending existing legislation and preparing new

legislation where necessary.

DOING BUSINESS


Real PropertyThe real estate market in Mauritius has emerged as a

sector with competitive opportunities for investors, small

landowners and non-citizens wishing to reside in the

country. The legal environment guarantees protection of

the rights of sellers and purchasers. Effective administration

has simplified and facilitated the ease of business

transactions related to residence permits and acquisition

of property. Coupled with a low tax regime, political, and

financial stability, the country provides investors with a

secure platform for property development. The real estate

sector in Mauritius provides an array of opportunities for

both commercial and residential purposes.

Commercial Property

The commercial property market in Mauritius allows for the

development of different property types such as:

‣ Hotels

‣ Shopping malls and duty free shops

‣ Office buildings

‣ Business and industrial parks

When acquiring property for business purposes or for the

lease of immovable property for a period exceeding 20

years for business purposes, the investor needs to apply for

approval from the MBOI. A ‘business purpose’ is considered

to be the acquisition of property for:

‣ Development of active commercial buildings;

‣ Property Development Scheme (PDS); or

‣ Any activity carried out with the purpose of profit

excluding residential properties not developed under

the PDS and the acquisition for lease, resale or rental

of a bare or serviced land.

Residential Property

The residential real estate market is also expanding through

the development of luxury residential properties.

The PDS

In Mauritius, this market is now developed under PDS. The

PDS which has replaced the Integrated Resort Scheme (IRS)

and the Real Estate Scheme (RES) allows the development

of a mix of residences for sale to non-citizens, citizens and

members of the Mauritian diaspora.

The PDS provides for:

‣ The development of luxurious residential units on

freehold land of an extent of at least 0.4220 hectare

(1 arpent);

‣ The development of at least six residential properties

of high standing; high quality public spaces that helps

promote social interaction and a sense of community;

‣ High-class leisure, commercial amenities and facilities

intended to enhance the residential units; and

‣ Day-to-day management services to residents

including security, maintenance, gardening, solid

waste disposal and household services; and social

contribution in terms of social amenities, community

development and other facilities for the benefit of the

community.

A non-citizen is eligible for a residence permit upon the

purchase of a villa under the PDS scheme when he has

invested more than USD 500,000 or its equivalent in

any freely convertible foreign currency. The PDS is also

a demarcation from the IRS and RES in as much as it

does not differentiate between small and big landowners

and harmonizes the registration duty to a single rate of

5percent instead of USD 70,000 on registration of a deed

under IRS and USD 25,000 under RES.

The Invest Hotel Scheme (IHS)

The IHS allows hotel developers to finance the

development of a hotel project by allowing them to sell

villas, suites, rooms or other components that form part of

the hotel to individual buyers.

The IHS provides:

‣ For the development of a hotel on either freehold or

leasehold land of more than one hectare where units,

villas, suites or other parts of the hotel can be sold;

‣ That the buyer of a unit enters into a lease agreement

by which the property is leased back to the seller; and

‣ That the unit leased to the seller may be used and

occupied by the unit owner or any person on his

behalf for a total of not more than 45 days in any

period of 12 months.

There is no minimum amount of investment that is required

for the acquisition of a room, suite or other part of the

hotel; however, a minimum of USD 500,000 is required for

a stand-alone villa.

DOING BUSINESS


Acquisition of Property by a Non-Citizen

Any foreigner who wishes to hold or acquire freehold or

leasehold immovable property in Mauritius must obtain

authorisation from either the Prime Minister’s Office or the

MBOI. Non-citizens must obtain authorisation from the

Prime Minister’s office in respect of:

‣ Acquisition of shares in a company holding freehold or

leasehold immovable property;

‣ Acquisition of immovable property by a person not

registered as an investor with BOI;

‣ Lease of immovable property for more than 20 years

by a person not registered as Investor with BOI; or

‣ Lease of immovable property for residence for a

period exceeding four years.

The non-citizen shall first make a written application to the

Prime Minister’s office or the MBOI to be delivered with

a certificate authorising him to acquire the property. Such

approval is also required in respect of an acquisition of

shares in a Mauritian entity which has, amongst its assets,

any freehold or leasehold property in Mauritius.

Under the Non-Citizen Property Restriction Act, such

approval would also be required where a non-citizen

acquires shares in a company which in turn holds shares

in a subsidiary whose assets include freehold or leasehold

property in Mauritius. However, no certificate is required

where a non-citizen acquires shares in a Mauritian entity

that holds any leasehold property, if such property is the

subject of a lease agreement for industrial or commercial

purposes for a term not exceeding 20 years.

The Prime Minister’s approval is not required, when the

property is held or acquired in the following instances:

‣ Acquisition of immovable property for business

purposes;

‣ Acquisition of residential property by holders of

permanent resident permit;

‣ Acquisition of residential units under Integrated

Resort Scheme, Real Estate Scheme, Property

Development Scheme or Invest Hotel Scheme; or

‣ Lease of immovable property for more than 20 years

for business purposes.

In the above circumstances, non-citizens must obtain

authorisation from the MBOI. No authorisation is required

in case of a non-citizen who:

‣ Holds immovable property for commercial purposes

under a lease agreement not exceeding 20 years;

‣ Holds shares in companies which do not own

immovable property;

‣ Holds immovable property by inheritance or effect of

marriage;

‣ Holds shares in companies listed on the stock

exchange; or

‣ Invests through a unit trust scheme or any collective

investment vehicle.

All non-citizens who have acquired a property under the

PDS where the value of the residential property is not less

than USD 500,000 or its equivalent in any other freely

convertible foreign currency in Mauritius are granted

residence permits for themselves and any spouses or

dependents. The permits remain valid so long as the non-

citizen still possesses the residence or until the company

terminates the residency.

Legal Forms of IncorporationBusinesses can be conducted in Mauritius in several forms,

such as a:

‣ Private limited liability company;

‣ Public limited liability company;

‣ Sole-proprietorship;

‣ Branch of a foreign company;

‣ Société;

‣ Limited partnership; or

‣ Foundation.

The Companies Act, 2001 (the Act), governs incorporation

of companies. The Act incorporates international best

practices and promotes accountability, openness and

fairness. The Business Facilitation (Miscellaneous

Provisions) Act 2017 simplified the business licensing

process for business start-ups and allows businesses

to start operations expeditiously and certificate of

incorporation can be issued within one (1) working day.

DOING BUSINESS


The Act creates several types and categories of companies,

such as domestic companies, companies holding a Category

1 GBL and companies holding a Category 2 GBL.

These companies may be in the form of:

a. A company limited by guarantee; A company limited

by guarantee limits the liability of its members to such

amounts as the members may respectively undertake

to contribute to the assets of the company in the

event of it being wound up.

b. A company limited by shares; A company limited

by shares limits the liability of its members to any

amount unpaid on the shares respectively held by the

shareholder.

c. A company limited by shares and by guarantee; A

company limited by shares and by guarantee means a

company formed on the principle of having the liability

of its members:

i. who are shareholders, limited to the amount

unpaid, if any, on the shares respectively held by

them; and

ii. who have given a guarantee, limited to the

respective amount they have undertaken to

contribute, from time to time, and in the event of

it being wound up.

d. An unlimited company; An unlimited company

imposes no limit on the liability of its shareholders.

Public Company / Private Company

A company incorporated under the Companies Act may be

a public company or a private company. If it is not specified

that the company is a private company, it will be deemed to

be a public company.

A private company is one which specifically states in its

application for incorporation or its constitution that it

is a private company. The private company may restrict

the transfer of its shares, which cannot be offered to the

public. A private company must have a minimum of 1 and

a maximum of 25 shareholders. Where the number of

shareholders exceeds 25, it will be deemed to be a public

company.

Limited Life Company

A company of any of the types of companies referred

to in (a – d) above may be registered as a limited life

company where its constitution limits its life to a period

not exceeding 50 years from the date of its incorporation.

However, this company may by resolution alter its

constitution extending the duration of the company

to a maximum period of 150 years from the date of

incorporation of the company.

Global Business Licences (GBL) Companies

A public or private company set up under the Companies

Act, 2001 may apply to the Financial Services Commission

(FSC) for a licence to carry on global business. The FSC

issues two types of licences namely GBL 1 and 2.

A GBL 1 company is a company registered in Mauritius and

considered as resident in Mauritius for tax purposes. A GBL

1 company can conduct business both within and outside

Mauritius and deal with a person resident in Mauritius.

The central management and control of a GBL 1 company

must be vested in Mauritius. A GBL 1 company will also

benefit from Double Tax Avoidance (DTA) treaties between

Mauritius and other states, subject to possession of a

Tax Residency Certificate. It will also have to file audited

financial statements with the FSC. A GBL 1 Company is

taxed at a flat rate of 15 percent, although foreign tax

credits will be allowed for taxes suffered at source where

this can be evidenced.

A system of deemed foreign tax credits of 80 percent

effectively reduces the income tax rate to 3 percent on

the qualifying income of the company. The tax payable

in Mauritius can be less than 3 percent, where the actual

foreign taxes are more than 12 percent.

A GBL 2 company is tax exempt in Mauritius and does

not need to have audited financial statements nor

have a company secretary. It, however, does not have

access to the tax treaties network. The FSC provides

certain restrictions on the business activities that may

be conducted by a GBL 2 company. No application for a

GBL 2 company shall be made by a company registered in

Mauritius, unless it is a private company and proposes to

conduct business activity other than the following:

i. banking;

ii. financial services;

iii. carrying out business of holding or managing or

otherwise dealing with a collective investment fund or

scheme as a professional functionary;

DOING BUSINESS


iv. provision of registered office facilities, nominee

services, directorship services, secretarial services or

other services for corporations; or

v. providing trusteeship services by way of business.

The Companies Act contains specific provisions applicable

to both GBL 1 and GBL 2 companies. The Act also contains

specific exemptions for each type of company.

Foreign Company

The Companies Act enables the registration of a foreign

company if it has a place of business or is carrying on

business in Mauritius. It also provides for the migration of

companies registered under the Companies Act to other

jurisdictions.

Before starting operations, businesses must register

with the Registrar of Companies. For a limited number of

regulated activities in such sectors as tourism, sugar and

broadcasting, an application for the appropriate permit or

licence must be made to the competent authorities prior to

start of operations. It is worthwhile to note that Mauritius

ranked 25th out of 190 countries in the World Bank

Group’s Ease of Doing Business Report 2018.

Société

A société can be set up under the provision of the Civil

Code or Commercial Code. The participants’ interests

are referred to as “parts sociales”. A société is fiscally

transparent and the liability of the “limited partners” can

be limited. A “société commerciale” needs to be registered

with the Registrar of Companies.

Limited Partnership

Since 2011, with the enactment of the Limited Partnerships

Act, limited partnerships can now be used to structure

investments. A limited partnership can elect to have a legal

personality and is required to have at least one general

partner who is liable for all the debts and obligations of the

limited partnership, and one limited partner who is liable

only up to the maximum amount of its commitment.

A limited partnership may elect to have a separate legal

personality. Irrespective of whether a limited partnership

has elected for legal personality, it retains its pass-through

attribute such that the partners are liable for debts of the

partnership (general partners having unlimited liability

whereas limited partners are liable to the extent of their

contribution or as they have agreed). Further, limited

partnerships are fiscally transparent and in effect, a limited

partnership will not be liable to tax (irrespective of whether

or not it elects to have legal personality) but each partner

will be liable to tax with its share of the income of the

partnership. However, a limited partnership which holds a

GBL may opt to be fiscally opaque.

Limited Liability Partnership

A limited liability partnership (LLP) introduced by the

Limited Liability Partnerships Act 2016 is the new type

of partnership vehicle. It combines features of both a

company and a limited partnership. It can be used for

offering professional or consultancy services and also

legal services through the holding of a Global Legal

Advisory Services Licence issued by the Financial Services

Commission.

An LLP can be set up by two or more partners. The Limited

Liability Partnerships Act 2016 also provides for the

conversion of an existing entity or unincorporated body to

an LLP and the re-domiciliation of foreign LLPs or Mauritian

LLPs to and from Mauritius.

There are no restrictions on the residency of the partners

and a partner can be an individual, an entity or an

unincorporated body.

The LLP is required to appoint a manager resident in

Mauritius at all times which should be a local management

company if the LLP holds a Category 1 Global Business

Licence or a person qualified as a secretary if such is not

the case.

The LLP should be registered with the Registrar of LLP.

A partnership agreement should be put in place by the

partners which will provide for the governance of the LLP

and the rights and duties of the partners. The LLP can hold

a Category 1 Global Business Licence if it would conduct a

major part of its business outside Mauritius. In such case,

the LLP Act provides for public records of the LLP not to be

available for inspection, and its audited financial statements

to be filed with the FSC.

Foundation

Foundations are set up to benefit persons, a class of

persons or to carry out a purpose which can be charitable,

non-charitable or both. It is an ideal vehicle for succession

DOING BUSINESS


planning and private wealth management. A foundation

is managed by a council which carries out the objectives

and purposes of the foundation. It must have at least one

member ordinarily resident in Mauritius. Similar to Trustees,

a Council may have the power to appoint new beneficiaries

and determine the extent and nature of beneficial rights.

There is no requirement for that member to be a licensed

trust company. It requires a secretary in Mauritius who

needs to be licensed and needs to have their registered

office in Mauritius. Foundations are governed by the

Foundations Act, 2012.

Intellectual PropertyMauritius is a member of the World Intellectual Property

Organisation and party to the Paris and Berne conventions

for the protection of industrial property and the Universal

Copyright Convention. Intellectual property rights are

protected by the Copyrights Act 2014 and the Patents,

Industrial Designs and Trade Marks Act 2002, which are

both in line with international norms and comply with

the WTO’s Trade Related Aspects of Intellectual Property

Rights Agreement.

Trademark protection is available in Mauritius for both

goods and services. A trademark is initially registered for

10 years and may be renewed for successive periods of 10

years. This protection may be cancelled if the trademark

protection is not used for a period of three years or more

from the date it is granted.

On the sale of a business in Mauritius, trademark

protection is assignable, but to the extent of goodwill

only. Well-known international trademarks are protected,

regardless of whether they are registered in Mauritius.

As far as patents go, a patent is granted for 20 years and

cannot be renewed.

Dispute SettlementThe Mauritian legal system is largely based on English

common law and French civil law. The domestic legal

system is generally non-discriminatory and transparent.

Members of the judiciary are independent of the legislature

and the Government. The highest court of appeal is

the judicial committee of the Privy Council of England.

Mauritius is a member of the International Court of Justice.

The country is also a member of the International Centre

for the Settlement of Investment Disputes. A Commercial

Court was set up in early 2009 to expedite the settlement

of commercial disputes.

International Arbitration

The International Arbitration Act came into force in

January 2009 and sets out the rules applicable to an

international arbitration based on the UNCITRAL Model

Law on International Commercial Arbitration. The regime

brought about under the International Arbitration Act is

distinct from that of domestic arbitration which is primarily

governed By the Mauritian Code on Civil Procedure.

The main objective of the International Arbitration

Act is to promote Mauritius as an arbitration forum

endowed with a comprehensive modern legal framework

in international arbitration. This Act gives an important

role to the Permanent Court of Arbitration of The Hague

and also allows the parties to be represented by foreign

law practitioners. In July 2011, the Government of

the Republic of Mauritius, the LCIA and the Mauritius

International Arbitration Centre Limited (MIAC) entered

into an agreement for the establishment and operation the

LCIA-MIAC Arbitration Centre.

In line with the international consumer protection

standards, the International Arbitration Act provides for

specific consumer consent to arbitration agreements. The

New York Convention, 1958 implemented in Mauritian

laws by the Convention on Recognition and Enforcement

of Foreign Arbitral Awards Act, 2001 (proclaimed in 2004),

will apply to any award delivered under the Act. Given the

role of Mauritius as an offshore regional business hub, the

International Arbitration Act also makes specific allowances

to global business companies and their shareholders.

DOING BUSINESS


Industry Sectors

AgricultureSince independence in 1968, Mauritius has moved away

from being an agriculture-based economy. At one stage,

sugar production was the backbone of the Mauritian

economy; however, the economy has since diversified

significantly. Agriculture as at 2016 made up 3.6 percent of

the GDP of Mauritius.

Sugarcane remains the dominant crop, extending over 90

percent of the cultivated land surface of the country. 15

percent of export earnings come from sugarcane. Other

crops include tea, tobacco, vegetables, fruits, flowers, cattle

and fishing.

Banking & Financial ServicesMauritius has a well-developed and modern banking

system, with 22 banks currently licensed to undertake

banking business comprising of 5 local banks,10 foreign-

owned subsidiaries,1 joint venture, 4 branches of foreign

banks and 2 licensed as private banks. The Banking Act,

2004, provides for banking business to be conducted under

a single banking licence regime. Accordingly, all banks are

free to conduct business in all currencies, including the

MUR. There are also several non-bank financial institutions

which are authorised to conduct deposit-taking business.

Financial and Insurance services account for 12.1 percent

of GDP.

The Bank of Mauritius - the Central Bank, carries out the

supervision and regulation of banks as well as non-bank

financial institutions authorised to accept deposits. The

Central Bank has endorsed the Core Principles for Effective

Banking Supervision, as set out by the Basel Committee

on Banking Supervision. The financial system has not

been involved in sub-prime lending or any activity deriving

directly or indirectly from that asset class. The sector is

well regulated and has proven to be quite solid and highly

profitable.

As at December 2017, the Stock Exchange of Mauritius

(SEM) had 94 listed issuers on the Official Market and 47

listed issuers on the Development and Enterprise Market

(which is designed for small and medium enterprises).

The SEM won for the fourth time in seven years the “Most

Innovative African Stock Exchange of the year Award” at

the Ai Institutional Investment Summit and Capital Markets

Index Series Awards 2017 organised by Africa investor (Ai),

a leading international research and communication group.

The SEM is a member of the World Federation of

Exchanges, which reports that the SEM adheres to industry

business standards. In November 2007, the SEM was

included in the new Morgan Stanley Capital International

Frontier Markets Indices, which is designed to track the

performance of a range of equity markets that are now

more accessible to global investors. Mauritius was among

four countries in Africa to be included in the new indices.

The SEM has also been included in the DOW Jones SAFE

100 Index which was launched in March 2009 by the South

Asian Federation of Exchanges. The SEM was opened

to foreign investors following the lifting of the foreign

exchange controls in 1994.

No approval is required for the trading of shares by foreign

investors unless the investment will result in the foreign

investors holding15 percent or more of the voting capital in

a sugar company.

INDUSTRY SECTORS


EnergyMauritius is dependent on imported fossil fuels to meet its

energy needs. The Central Electricity Board is a parastatal

body wholly owned by the Government of Mauritius,

reporting to the Ministry of Energy and Public Utilities. It

produces around 40 percent of the country’s total power

requirements, the remaining 60 percent being purchased

from independent power producers. Besides the traditional

forms of energy production, the Government is also

encouraging the use of more environmental friendly energy

sources such as solar farms and wind farms.

ManufacturingManufacturing accounts for 17 percent of GDP in

Mauritius. Most goods are manufactured for the export

market. The sector primarily incorporates the manufacture

of labor-intensive goods including: textiles and clothing;

light engineering goods; watches and clocks; jewellery;

optical goods; toys and games and cut flowers.

MiningThere are few mineral resources in Mauritius. Historically,

mineral output consists of basalt construction stone, coral

sand, lime for coral and solar-evaporated sea salt.

TelecommunicationsMauritius has a small telecommunications system with

good service. There were 568,700 internet users and

1,485,800 mobile phone subscriptions (surpassing 100

percent) in 2012. The main mobile operators in Mauritius

are Orange, Emtel and Mahanagar Telephone (Mauritius)

Ltd. There is a strong legislative framework governing the

Mauritian telecommunication sector with the Information

and Communication Technologies Authority regulating the

sector.

TourismTourism is a big foreign exchange earner for Mauritius.

The sector accounts for 7.7 percent of GDP and revenues

for the year 2016 amounted to USD 1.6 Billion (Rs

55.9billion). Most of the visitors come from Europe, South

Africa and Reunion Island. The Government has also been

encouraging tourists from new emerging markets such as

China, Russia, India, Australia and UAE.

INDUSTRY SECTORS


Key Developments

Financial Services

Launch by the African Export – Import Bank (“Afreximbank”) of an equity offering in Mauritius through Depositary ReceiptsAfreximbank, in 2017, launched a US$300 million equity

offering in Mauritius through the listing on the Stock

Exchange of Mauritius of its fully paid up Class D Shares,

in the form of Depositary Receipts. The listing of the

Depositary Receipts represents a big first for the equity

capital markets of Africa and the first time a supranational

bank has issued Depositary Receipts through an African

stock exchange. The rationale for the Depositary Receipts

issuance for Afreximbank was the need to enhance its

capitalization in order to narrow the trade financing gap in

Africa and meet its strategic objective of growing intra-

African trade in all regions of the continent, including island

economies.

Natural Resources

The Development of Mauritius’ Ocean EconomyThe Mauritius Government Programme of 2015 reflects

the vision of the Government to transform Mauritius into

an ocean state by promoting its ocean economy as one of

its main pillars of development. The plan is to better utilise

the country’s oceanic Exclusive Economic Zone (EEZ),

measuring 2.3 million square kilometres to create jobs

and boost tourism. This is meant to diversify the economy

and protect it from future external blows, as well as drive

growth. It is expected to unlock investments of about USD

600 million and create about 25,000 jobs. The Mauritius

Government has already initiated several measures aimed

at tapping into these opportunities, namely the creation

of a Ministry dedicated to the set-up of a National Ocean

Council for implementation of developmental projects,

a Continental Shelf, Maritime Zones Administration

and Exploration Department to develop the offshore

hydrocarbon and minerals sector of Mauritius, and a

High Powered Committee and Joint Public-Private Sector

Steering Committee to closely monitor project facilitation

and implementation. Business opportunities that are

expected under an ocean economy are seabed exploration

for hydrocarbons and mineral; fishing and seafood

processing; marine services including marine tourism

and marine pharmaceuticals; petroleum, minerals and

ocean energies; fisheries and aquaculture; seaport related

activities and deep ocean water applications (DOWA),

which include a plan to pump cold water of approximately

5 C from depths of around 1,000 meters to the surface to

cool buildings.

Other DevelopmentsIn October 2016, the “regulatory sandbox licence” (“RSL”)

was introduced following amendments to the Investment

Promotion Act 2000. The RSL allows eligible companies

to invest in innovative projects within an agreed set of

terms and conditions. It offers the possibility for an investor

to conduct a business activity for which there exists no

legal framework, or adequate provisions under existing

legislation in Mauritius. With the introduction of the RSL,

Mauritius put itself on equal footing with countries like the

UK, Singapore and Australia, who have applied the concept

KEY DEVELOPMENTS


of RSL. The RSL will speed up strategic investments in

innovative projects in the absence of a formal licensing

framework.

The Economic Development Board (EDB) has been set

up following the Economic Development Board Act 2017

enacted on 19 July 2017. The EDB will integrate the Board

of Investment, Enterprise Mauritius, the Financial Services

Promotion Agency and the Mauritius Africa Fund to ensure

greater coherence and effectiveness in implementing

policies and actions and will facilitate both inward and

outward investment and ensure a conducive business

environment in Mauritius. The EDB which will be the

main business licensing agency in Mauritius will comprise

of three directorates namely: National and Sectoral

Economic Development Planning; Investment and Export

Promotion (Integration of BOI, EM, FSPA and MAF); and

Business Licensing Agency (Implementation of e-Licensing

business platform). It will also collaborate in the creation

of a Regional Fintech Association to create links with other

international institutions such as Innovate Finance London

and Fintech Circle.

In October 2017, a new category of Occupation Permit

was introduced following amendments to the Investment

Promotion Act 2000: the Innovator Occupation Permit

(Innovator OP) to expand the eligibility criteria for an

Occupation Permit. Foreign nationals willing to invest in

Mauritius and conduct Research and Development (R&D)

projects in innovative sectors may apply for an Innovator

OP through the Board of Investment.

The eligibility criteria to obtain an Innovator OP includes:

a. Investors will be required to make an initial investment

of at least USD 40,000.

b. The R&D expense component should constitute at

least 20% of total operational expenditure during the

research phase.

Moreover, with a view to encourage innovation and

the introduction of state-of-the-art technologies by

investors, the eligibility criteria for investors applying for

an Occupation Permit with a minimum investment of USD

100,000 have been expanded to allow the importation of

high-tech machinery and equipment as part of the required

USD 100,000 investment. The minimum cash investment

shall be USD 25,000 while the balance in of high-tech

machinery and equipment should worth USD 75,000.

The World Bank Group in its Doing Business 2018 report,

ranked Mauritius highest in Africa, with a World rank of

25. The annual report on the state of health of economies,

ranks countries around the world on the ease of doing

business in them and the 2018 report presents data for

190 economies and has reported improvements in ranking

in 8 out of 10 indicators namely Starting a Business,

Dealing with Construction Permits, Getting Electricity,

Registering Property, Paying taxes, Trading Across Borders,

Enforcing contracts and Resolving Insolvency. Mauritius is

among the league of top 10 countries in the Dealing with

Construction Permits and Paying taxes indicator. According

to the Doing Business 2018 Report, the best performing

economies have been those with good regulation that

allow efficient and transparent functioning of business

and markets while protecting public interest. In addition,

the economies ranking high on the Doing Business

indicators also tend to perform well in other international

data sets, such as the Global Competitiveness Index and

Transparency International’s Corruption Perceptions Index.

KEY DEVELOPMENTS

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E: [email protected]

BLC Robert & Associates2nd Floor, The Axis, 26 Cybercity, Ebene 72201, Mauritius

+230 403 2400 | F: +230 403 2401 E [email protected]

The information contained in this report is of a general nature and is not intended to address the circumstances of any particular individual or entity. While the information is accurate as at date hereof, there can be no guarantee that the information is accurate as of the date it

is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

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