Mauritius: An Overview

With a booming economy thriving on sustained economic growth, Mauritius distinguishes itself among other African economies as a secure investment location, with established rule of law, and political and economic stability. It has an investment-friendly regulatory regime and offers various fiscal incentives to boost – as well as hold – investment.

Mauritius has signed 46 Double Taxation Agreements (DTAs) and 29 Investment Promotion & Protection Agreements (IPPAs), many with countries in Africa. Investors can use Mauritius as a springboard to carry out international business activities and benefit from various cross-border opportunities, as well as to hold investments, raise funds, and list their shares locally or in the capital market of their choice.

Legal Framework

Mauritius has a fully-functioning and effective legal system that derives from both French civil law and English common law. Unlike other countries that have become republics, Mauritius has retained the right of appeal to the Judicial Committee of the UK Privy Council, which remains the highest appellate court of the country. This guarantees an appeal process that is independent of any political or other form of bias.

Mauritius has a duly-regulated compliance framework that enables the fight against money laundering and terrorism financing. Anti-Money Laundering / Combatting the Financing of Terrorism (AML/CFT) laws are strict. Mauritius fully supports international initiatives such as the Financial Action Task Force (FATF-GAFI) and the OECD, which classifies Mauritius as ‘compliant with global tax laws’, and is a member of the Anti-Money Laundering Group for Eastern and Southern Africa

The country comprises of its regulators, namely the Financial Services Commission (FSC), and the Bank of Mauritius (BOM), which have devised robust regulations to oversee the financial and banking activities. Mauritius adheres to all international initiatives in respect of anti-money laundering, transparency, and exchange of information.

Products

Mauritius offers three basic company types that offer investors large amounts of flexibility in structuring their businesses. The Global Business Licence Company (GBL) and the Authorised Company (AC) are both licenced and regulated in Mauritius by the FSC and are designed to conduct offshore business, ie outside Mauritius. A GBL is a resident corporation able to benefit under the tax treaty network, while an AC is deemed to be “non-resident for tax purposes” and is therefore not subject to income tax in Mauritius. A Domestic Company is the best way to conduct business with Mauritian residents.

A GBL can be structured as a Protected Cell Company (PCC), which is a very useful structure for holding multiple investments in different projects. A GBL can also obtain additional licences that permit it to perform regulated activities, such as investment dealing, insurance brokering, pension scheme management, fund management and many others.

Mauritian law further allows for the creation of Trusts and Foundations, while any of the three company types outlined above can be set up as hybrid.

Mauritius has been dubbed the ‘Gateway to Africa’ due to an extensive network of DTAs that enable it to act as a staging post for investment into Africa. It currently has 46 tax treaties in force, while seven treaties await ratification, five await signature, and 21 are under negotiation. Mauritius does not levy capital gains tax nor withholding tax.

Mauritius operates a ‘low tax’ regime. The maximum corporate tax rate is 15 per cent but certain income streams, notably dividend and interest payments or trading income, are subject to an 80 per cent partial exemption in respect of GBL and domestic companies, which gives an effective tax rate of three per cent on those streams. Income derived from exports is taxed at three per cent without the requirement of landing goods in Mauritius. ACs are not subject to any tax in Mauritius, and the government has recently created a number of tax holidays of between five and eight years in duration to companies engaging in certain activities, notably Global Treasury, Headquarters Administration, and Development of Intellectual Property.

Mauritius imposes no withholding tax on dividends, interest and royalties, no capital gains tax, free repatriation of profits, no estate duty, inheritance tax or gift tax.

It must also be highlighted that there is zero-rated Value-Added Tax (VAT) for global business transactions.

The Mauritian banking sector currently supports various banks that offer a wide range of services. Investors in Mauritius easily find a bank to suit their needs. Besides traditional banking facilities, specialised services include fund administration, custodial services, trusteeship, structured lending, structured trade finance, international portfolio management, investment banking, private client activities, treasury, and specialised finance. The international banks offer a wide range of global banking and financial services to corporate, institutional, and private clients. Some of the biggest and most reputable international banks are present in Mauritius and actively carry out international cross border activities. Mauritius permits bank accounts to be kept in all major currencies and does not have any exchange control.

Finally, we must mention the Mauritius Stock Exchange which is open to foreign investors. Many shares of African companies are now listed, next to Mauritius companies’ shares, of course.

Non-Fiscal Advantages

• Parliamentary democracy; political, social and economic stability.
• Investment-friendly regulatory regime.
• Well-regulated financial sector.
• Internationally recognised rules and regulations.
• Ideal time zone (GMT +4).
• Large network of highly skilled, qualified, bilingual professionals available at competitive rates.
• Ideal platform for arbitration in case of dispute.
• Excellent communications network.
• Highly efficient airline connectivity with Asia, Europe and Africa.

Residency In Mauritius

Mauritius has always been a welcome home for foreign professionals who bring their skills and talents. From dynamic sectors like technology and innovation, information and communication, healthcare and tourism, to finance, trade, and real estate, Mauritius offers opportunities to expatriates to develop their skills in the Mauritian job market.

In line with its growing development, Mauritius opens the doors to its job market to foreign students who have studied in a tertiary education institution in the country. They are eligible for a maximum three-year Occupation Permit, depending on the duration of the contract of employment.

Investment and entrepreneurship have made Mauritius one of the most dynamic developing countries of sub-Saharan Africa and of the Indian Ocean. The country has been consistently growing its economy and has therefore been attracting investors. Mauritius gained independence from the UK in 1968 as a Parliamentary Republic and has remained a stable democracy with regular free elections and a positive human rights record. The country also attracted considerable foreign investment and now has one of Africa's highest per capita incomes.

Mauritius is one of the go-to destinations to invest due to its privileged geographical location as a true crossroads between Asia and Africa, and its beneficial international treaties, that make it a gateway to European and American markets.

Thanks to a strategy geared towards best practices, Mauritius has become a hub in terms of fiscal policy, good governance, ethics, transparency, political and economic freedom. A transparent and well-defined investment code and legal system have made the foreign investment climate in the country one of the best in the region.

To further open the Mauritian market to investors and foreign expertise, and with a view to long-term stability, the government offers a 10-year Occupation (and Residency) Permit as a value investing incentive through different means of investment.

Mauritius is blessed with warm and conducive weather, along with a peaceful and harmonious environment, an ever-improving infrastructure, and a competitive cost of living, which makes it a remarkable place for retirement.

Projects being developed under the scheme (PDS for Senior Living) essentially refer to homes that cater to adults aged 50+ who are looking to live independently in a peer environment, and provide facilities for recreation and socialising, including a clubhouse, health club or gym, facility management services, focused on the needs of the elderly.

A non-citizen retiree, ie aged above 50 years of age, can acquire a residential unit or the life rights in respect of a residential unit in an approved project. There is no minimum acquisition price, and the non-citizen can choose to apply for a residence permit for themselves and their spouse or common law partner until such time the property is no longer owned or occupied by the retiree.

Another product of the luxury residential offerings of Mauritius, RES projects offer different types of residences (villas, penthouses, duplexes, apartments) located within exclusive – albeit smaller – residential developments.

A foreigner can acquire a residential property in existing RES projects, and will be eligible for a residence permit for themselves and their dependents if they have invested a minimum amount of USD 375,000 to acquire the property. The owners may rent the property, become tax resident in Mauritius, and face no restriction on the repatriation of funds or revenue raised from the sale or renting of the property.

Non-citizens who have a residence permit under RES will be exempted from an Occupation or Work Permit to invest and work in Mauritius.

The Mauritian Diaspora Scheme is an initiative of the Government of Mauritius to attract members of the Mauritian diaspora back home to participate in the economic development of the country. A member of the Mauritian diaspora may apply for the scheme under one of the following categories: professional, self-employed, and young professional, which best reflects the nature of these activities in Mauritius, and meets the eligibility criteria defined.

In fact, these multiple initiatives enable Mauritius to attract foreign professionals and some wealthy retirees, which together are helping sustain the remarkable economic growth having prevailed since independence.

Dr Ludovic C. Verbist
PhD, LLM, TEP, Managing Director of AAMIL (Mauritius) Ltd. Ludovic has contributed to a number of articles and interviews, including: Prudence et Préservation du Capital - Business Magazine (October 2017); Guaranteed Real Estate Investment – Cap Sur Maurice Magazine (October 2018); Luxury Property Market in Mauritius – Cap Sur Maurice Magazine (October 2019); Vendre Maurice comme une destination refuge – Le Mauricien Newspaper (May 2020); Jouer à fond la carte africaine dans l’ère post-Covid-19 – Business Magazine (May 2020); Global Business « Désamorcer la Bombe » - Business Magazine (June 2020); Liste Noire – La bataille se jouera sur le terrain diplomatique - Business Magazine (July 2020); Interview – « Parlons économie » - Radio Lac (October 2020); «Maurice face à la menace d’un maintien prolongé sur la liste noire » - Business Magazine (February 2021).