2017 Investment Climate Statements: Mauritius

Policies Toward Foreign Direct Investment

Mauritius actively seeks foreign investment. The Board of Investment (BOI) is the single gateway government agency responsible for promoting investment in Mauritius, and for helping guide investors through the country’s legal and regulatory requirements.

According to a number of surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. In the 2017 Index of Economic Freedom, published by The Heritage Foundation, Mauritius has sustained its first position as a “mostly free” economy in Sub-Saharan Africa and ranked 21st globally. For the ninth consecutive year, the World Bank’s 2017 Doing Business report ranks Mauritius first among African economies, and 49th worldwide, in terms of overall ease of doing business.

Limits on Foreign Control and Right to Private Ownership and Establishment

A non-citizen can hold, purchase, or acquire real property, under the Non-Citizens (Property Restriction) Act, subject to the Government of Mauritius’ approval. A foreigner can acquire a residential property under the Property Development Scheme (PDS), a government-regulated scheme, as well as apartments. The PDS replaces the previous Integrated Resort Scheme (IRS), and the Real Estate Scheme (RES). The Non-Citizens (Property Restriction) Act was amended in December 2016 to allow foreigners to purchase certain types of properties so long as the amount paid is over Rs 6 million (approximately USD166,000). More information is available at http://www.investmauritius.com/media/397092/Guidelines-acquisition-of-apartment-s-.pdf .

Regarding business activities, the Government of Mauritius generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper or magazine publishing, and certain operations in the tourism sector.

In television broadcasting, the Independent Broadcasting Authority will not grant a license to a foreign company or to a company more than 20 percent owned or controlled by foreign nationals. Similarly, a foreign investor cannot hold 20 percent or more of a company that owns or controls any newspaper or magazine, or any printing press publishing such publications. In the sugar sector, no foreign investor is allowed to make an investment that would result in 15 percent or more of the voting capital of a Mauritian sugar company being held by foreign investors. Finally, in the tourism sector, there are certain conditions for investment by non-citizens in the following activities: (i) guesthouse/tourist accommodation; (ii) pleasure craft; (iii) scuba diving; and (iv) tour operators. Generally, the limitations refer to a minimum investment amount, number of rooms, or a maximum equity participation depending on the business activity. Details of the restrictions are available from BOI at www.investmauritius.com .

The BOI screens foreign investment proposals and also provides a range of services to potential investors. BOI is a useful resource for investors exploring business opportunities in Mauritius and provides assistance with occupation permits, licenses and clearances by coordinating with relevant local authorities. The U.S. Embassy in Port Louis has had no negative comments from U.S. businesses regarding the government’s investment the screening mechanism.

BOI reviews proposals for economic benefit, environmental impact, and any relation to national security. BOI will then advise the potential investor on specific permits or licenses required, depending on the nature of the business. Foreign investors can also apply through the BOI for Occupation Permits, a combined work and residence permit (http://op.investmauritius.com/guidelines/Default.aspx ).

In the event that an investment fails review, the prospective investor may appeal the decision within BOI or to the relevant government ministry. Details on specific business activities restricted by law can be found at www.investmauritius.com .

Other Investment Policy Reviews

In July 2014, the Government of Mauritius conducted an investment policy review with the Organization for Economic Cooperation and Development (OECD) (http://www.oecd.org/investment/countryreviews.htm ). This review concluded that policies and legislation in Mauritius support private sector development. In October 2014, the authorities also conducted a trade policy review with the World Trade Organization (WTO) (http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm ).

Business Facilitation

The Government recognizes the importance of a good business environment to attract investment and achieve higher growth rate. In 2017, for the ninth consecutive year, the World Bank’s Doing Business report ranked Mauritius first among African economies, and 49th worldwide, in terms of overall ease of doing business.

The incorporation of companies and registration of business activities fall under the provisions of the Companies Act 2001  and the Business Registration Act 2002 . All businesses must register with the Registrar of Companies. A company incorporated in Mauritius can be 100 percent foreign-owned with no minimum capital. According to the World Bank 2017 Doing Business report, while procedures for registering of a company takes two days, actually starting a business takes six days.

After the Registrar of Companies issues a certificate of incorporation, companies must register their business activities with the BOI. The company can then apply for occupation permits (work and residence permits) and incentives offered to investors. BOI’s investment facilitation services are available to all investors, domestic as well as foreign.

In partnership with the Corporate and Business Registration Department, the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System (CBRIS), a web-based portal that allows businesses to incorporate, file statutory returns, pay yearly fees, register businesses, and search for business information. Applicants can register with MNS at https://portalmns.mu/cbris/.

Outward Investment

In Mauritius, there are no restrictions on capital outflows. With the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses. In the context of its Africa Strategy, the government has established the Mauritius Africa Fund as a public company with a capital of USD 13.8 million to support Mauritian investment in Africa. Through the Fund, the government can participate as an equity partner up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa. The government has signed agreements with Senegal, Madagascar, and Ghana establishing and managing Special Economic Zones in these countries and has invited local and international firms to set up operations there. To further facilitate investment, Mauritius has also signed 23 Investment Promotion and Protection Agreements and 20 Double Taxation Avoidance Agreements with African States.

Since 2012, the Board of Investment has been operating the Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa. It acts as a repository of business information for Mauritian entrepreneurs on investment opportunities in different sectors in Africa.

The bulk of Mauritian direct outward investment over the past several years has gone to (i) the tourism sector (hotel construction) in Maldives and Seychelles, (ii) sugar production in Mozambique, Tanzania, Cote d’Ivoire, Madagascar, and Uganda, (iii) the manufacturing sector (mainly apparel) in Madagascar, India, and Bangladesh, and (iv) the banking sector in Seychelles, Madagascar, Reunion, Maldives, Mozambique, South Africa, and India.

In September 2006, Mauritius and the United States signed a Trade and Investment Framework Agreement (TIFA), aimed at strengthening and expanding trade and investment ties between the two countries. The United States has not signed a Bilateral Investment Treaty or a Free Trade Agreement with Mauritius.

As of March 2017, Mauritius has signed Investment Promotion and Protection Agreements (IPPA) with 44 countries. The following 28 IPPAs have been ratified and are in force: Barbados, Belgium/Luxemburg Economic Union, Burundi, China, Comoros, 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, Turkey, U.K. and Northern Ireland, and Zambia. The following 16 IPPAs have been signed but are still waiting ratification: Benin, Cameroon, Comoros, Cote D’Ivoire, Gabon, Ghana, Guinea Republic, Kenya, Mauritania, Nepal, Rwanda, Swaziland, Chad, Zimbabwe, Sao Tome and Principe, and United Arab Emirates.

In December 2013, Mauritius signed a Tax Information Exchange Agreement (TIEA) and an Inter-Governmental Agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA). Mauritius has also signed TIEAs with Australia, Austria, Denmark, Finland, Norway, Guernsey, Faroe Islands, Greenland, Iceland, and South Korea.

As of March 2017, Mauritius has concluded Double Taxation Avoidance Treaties (DTATs) with 43 countries as follows: Australia, Bangladesh, Barbados, Belgium, Botswana, China, Croatia, Cyprus, Egypt, France, Germany, Guernsey, India, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Malta, Monaco, Mozambique, Namibia, Nepal, Oman, Pakistan, Qatar, Rwanda, Republic of Congo Senegal, Seychelles, Singapore, Sri Lanka, South Africa, Swaziland, Sweden, Thailand, Tunisia, Uganda, United Arab Emirates, United Kingdom, Zambia, and Zimbabwe. In addition, the following signed treaties await ratification: Gabon, Ghana, Jersey, Kenya, Morocco, Nigeria, and Russia.

Transparency of the Regulatory System

Since 2006, the government has brought major reforms to trade, investment, tariffs, and income tax regulations to simplify the framework for doing business. Trade licenses and many other bureaucratic hurdles have been reduced or abolished. With a well-developed legal and commercial infrastructure and a tradition of both entrepreneurship and representative government, Mauritius is one of Africa’s most successful economies. Business Mauritius, the coordinating body of the Mauritian private sector, participates in discussions with and presents papers to the authorities on laws and regulations affecting the private sector.

Regulatory agencies do not request comments on proposed bills from the general public. Both the notice of the introduction of a government bill and a copy of the bill are distributed to every member of the Legislative Assembly, and published in the Government Gazette before enactment. Bills with a “certificate of urgency” can be enacted with summary process. All proposed regulations are published on the Legislative Assembly’s website , which is publicly accessible.

Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. To combat corruption, money laundering and terrorist financing, the government also enacted the Prevention of Corruption Act, the Prevention of Terrorism Act, and the Financial Intelligence and Anti-Money Laundering Act. While Mauritius does not have a Freedom of Information Act, members of the public may request information by contacting the permanent secretary of the relevant ministry.

Legal System and Judicial Independence

The Mauritian legal system is a unique mixture of traditions. Mauritius draws legal principles from both French civil law and British common law traditions; its procedures are largely derived from the English system, while its substance is based in the Napoleon Code of 1804. Commercial and contractual law is also based on the civil code. However, some specialized areas of law are comparable to other jurisdictions. For example, its company law is practically identical to that of New Zealand. Mauritian courts often resolve legal disputes by drawing on current legislation, the local legal tradition, and by means of a comparative approach utilizing various legal systems. 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. Mauritius established a Commercial Court in 2009 to expedite the settlement of commercial disputes.

Contracts are legally enforceable and binding on the parties signing the contracts. Ownership of property is enforced with the registration of the title deed with the Registrar-General and payment of the registration duty. Mauritian courts have the jurisdiction to hear intellectual property claims, both civil and criminal. The judiciary is independent and the domestic legal system is generally non-discriminatory and transparent.

Laws and Regulations on Foreign Direct Investment

The Investment Promotion Act of 2000 governs investment in Mauritius and the Companies Act of 2001 contains the regulations governing incorporation of businesses. The Corporate and Business Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the Companies Act 2001, the Business Registration Act 2002, the Insolvency Act 2009, the Limited Partnerships Act 2011, and the Foundations Act 2012. Information regarding the various Acts can be found at the CBRD’s website .

The above-mentioned Acts and all the laws and regulations related to foreign investment can be downloaded from the Board of Investment’s website.

The Mauritian judiciary is independent and the legal system is generally non-discriminatory and transparent. The Embassy is not aware of any cases of government or other interference in the court system affecting foreign investors.

Competition and Anti-Trust Laws

The Competition Commission of Mauritius (CCM) is a statutory body established in 2009 to enforce the Competition Act 2007. This Act established a competition regime in Mauritius, under which the CCM can investigate possible anticompetitive behavior by businesses in the Mauritian market. Since it began operations, the CCM has undertaken 36 investigations, of which 24 have been completed and 12 are still ongoing. The results of completed investigations are available on CCM’s website .

Expropriation and Compensation

The constitution includes a guarantee against nationalization, but the Insurance (Amendment) Act passed in April 2015 enables the government’s Financial Services Commission (FSC) to appoint “special administrators” in cases where there is evidence that the liabilities of an insurer and its related companies exceed assets by MUR 1 billion (USD 28 million) and that such a situation “is likely to jeopardize the stability and soundness of the financial system of Mauritius.” The special administrators are empowered to seize and sell assets. The government enacted this law in the immediate aftermath of the financial scandal explained below.

In April 2015 the Bank of Mauritius, the Central Bank, revoked the banking license of Bramer Bank, the banking arm of Mauritian conglomerate BAI Group, citing an inadequate capital reserve ratio. As a result, Bramer Bank entered receivership and by May 2015 the receiver had transferred the assets and liabilities of Bramer Bank to a newly created state-owned bank, the National Commercial Bank Ltd., thus effectively nationalizing Bramer Bank. In January 2016, the Mauritian government merged the National Commercial Bank Ltd. with another government-owned bank resulting in Maubank, a new bank dedicated mainly to small and medium enterprises.

The government subsequently took over much of Bramer’s parent, the BAI Group. The Financial Services Commission placed the BAI Group in conservatorship, alleging fraud and corporate mismanagement in BAI’s insurance business. Following passage of the Insurance (Amendment) Act in April 2015, the FSC created the National Insurance Company, which took over the BAI Group’s core insurance business, and the National Property Fund, which took over other BAI Group assets, including a hospital and several retail outlets. CIEL Healthcare, a local private company, bought the hospital in January 2017.

In November 2015 BAI’s former chairman filed a dispute against the government of Mauritius with the United Nations Commission on International Trade Law alleging that the government illegally appropriated BAI’s assets. The dispute is ongoing.

Dispute Settlement

ICSID Convention and New York Convention

Mauritius is a member of the International Center for the Settlement of Investment Disputes and a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act. Mauritius is also a member of the Multilateral Investment Guarantee Agency of the World Bank.

Investor-State Dispute Settlement

The Embassy is unaware of any investment dispute involving U.S. investors. However, as explained above, the former chairman of BAI has filed a dispute against the government of Mauritius with the United Nations Commission on International Trade Law alleging that the government illegally appropriated BAI’s assets. Other disputes involving foreign investors include a suit by a local firm (which had bought out its foreign partner) alleging unfair competitive practices by Mauritius Telecom, and a foreign power company’s suit challenging the government’s decision to cancel a proposed energy project.

International Commercial Arbitration and Foreign Courts

In July 2011, the government of Mauritius, the London Court of International Arbitration (LCIA), and the Mauritius International Arbitration Center (MIAC) established a new arbitration center in Mauritius, the LCIA-MIAC Arbitration Center. LCIA-MIAC offers all the services offered by the LCIA in the U.K. The organization’s website  has additional information.

In addition, the Mauritius Chamber of Commerce and Industry’s Arbitration and Mediation Center (MARC) is an internationally recognized institution for commercial dispute settlement. MARC’s arbitration and mediation rules are also based on international standards, and it is a member of the International Federation of Commercial Arbitration Institutions. MARC has entered into cooperation agreements with arbitration centers in the United States (American Arbitration Association), Germany, France, Australia, India, and Kenya. More information is available at https://www.mcci.org/en/our-services/mcci-arbitration-and-mediation-center/a>.

Investment Incentives

Mauritius applies investment incentives uniformly to both domestic and foreign investors. The incentives are outlined in the Income Tax Act, the Customs Act, and the Value Added Tax Act.

Mauritius is known for its political, social and economic stability and provides preferential market access to Africa, Europe, and the U.S. Mauritius offers a low-tax jurisdiction and a number of other fiscal incentives, including the following: (i) flat corporate and income tax rate of 15 percent; (ii) 100 percent foreign ownership permitted; (iii) no minimum foreign capital required; (iv) no tax on dividends or capital gains; (v) free repatriation of profits, dividends, and capital; (vi) accelerated depreciation on acquisition of plant, machinery, and equipment; (vii) exemption from customs duty on imported equipment; and (viii) access to an extensive network of Double Taxation Avoidance treaties (as of March 2017, Mauritius had concluded such treaties with 43 countries while seven additional treaties are waiting ratification).

Additionally, the government has established the Property Development Scheme (PDS) to attract high net worth non-citizens who want to acquire residences in Mauritius. The PDS is a follow-on program from the existing Integrated Resort Scheme (IRS) and the Real Estate Scheme (RES). Buyers of a residential unit valued over USD 500,000 in certain projects are eligible to apply for a residence permit in Mauritius. The residential unit can also be let out by the owner. More detailed information on the PDS is available on BOI’s website ..

Foreign Trade Zones/Free Ports/Trade Facilitation

The Mauritius Freeport, a free trade zone, was established in 1992 and is a customs-free zone for goods destined for re-export. The government’s objective is to promote the country as a regional warehousing, distribution, marketing, and logistics center for eastern and southern Africa and the Indian Ocean rim. Through its membership in the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), and the Indian Ocean Commission (IOC), Mauritius offers preferential access to a market of over 600 million consumers, representing an import potential of USD 100 billion. Companies operating in Freeport are exempt from corporate tax. Foreign-owned firms operating in Freeport have the same investment incentives and opportunities as local entities.

The government of Mauritius has set aside 76 hectares of land as a Freeport zone, out of which 52 hectares have already been developed. Developed space has increased from 5,000 square meters in 1993 to 295,000 square meters in 2016, including cold rooms, dry storage, an international trade exhibition center, processing units, office space for transshipment, consolidation, and storage, and processing activities. Freeport facilities are also available at the airport. Activities carried out in the Freeport include warehousing and storage, breaking bulk, sorting, grading, cleaning and mixing, labeling, packing and re-packing, minor processing, transshipment, export-oriented port based activities, export-oriented airport based activities, freight forwarding, express courier services, mail order, simple assembly, reshipment, and quality control and inspection services. The Freeport has attracted close to USD 195 million of investments with a number of projects currently under implementation within the seaport and airport zones. In 2016, total trade in the Freeport reached 760,000 tons valued at USD 1.2 billion.

The government, in collaboration with the private sector, has also been promoting the Freeport as a seafood hub, in particular focusing on the transshipment, processing, storage, distribution, and re-exportation of high value-added seafood products using the modern port and Freeport facilities and logistics. The government set up a “one-stop-shop” in the port area to help facilitate administrative clearances related to the seafood industry.

Performance and Data Localization Requirements

The Government of Mauritius does not impose local employment requirements on foreign investors. A foreign national can apply for an Occupation Permit (OP), which is a combined work and residence permit, subject to certain conditions such as minimum investment, salary, and/or business turnover. The OP allows foreign nationals to work and reside in Mauritius under three specific categories, namely: (i) investor (ii) professional (iii) self-employed. Also, foreign nationals, above the age of 50 years, may choose to retire in Mauritius under a Residence Permit (RP). An OP or a RP is issued for a maximum period of three years and the permit holder may submit a new application upon expiry of the permit. Dependents of an OP or RP holder may also apply for residence permits for a duration not exceeding that of the OP or RP holder. Details on the minimum investment, salary or turnover amounts required to qualify for an OP or RP are available at the BOI website .

The Data Protection Act (DPA) of 2004 is the law that governs the protection of personal data in Mauritius. The Government of Mauritius established the Data Protection Office (office website ) in 2009. The Data Protection Commissioner is responsible for upholding the rights of individuals set forth in the DPA and for enforcing the obligations imposed upon data controllers. In June 2016, Mauritius ratified the Convention 108 of the European Union on data protection, becoming the second non-European country to sign the convention. This agreement gives individuals the right to protection of their personal data.

The Data Protection Act prohibits personal data being transferred to another country unless that country ensures an adequate level of protection and without written authorization of the Data Protection Commissioner. Regarding data storage, if it concerns the storage of personal data and/or sensitive personal data, the same provisions of the DPA regarding personal data apply. If a source code does not contain personal data, the DPA will not apply.

Real Property

Real property rights are respected in Mauritius. A non-citizen can hold, purchase, or acquire an immovable property under the Non-Citizens (Property Restriction) Act, subject to the government’s approval. Ownership of property is memorialized with the registration of the title deed with the Registrar-General and payment of the registration duty. The recording system of mortgages and liens is reliable. Traditional use rights are not an issue in Mauritius as there were no indigenous peoples present at the time of European colonization. According to the World Bank’s 2017 Doing Business Report, Mauritius ranks 98th out of 190 countries for the ease of registering property.

Intellectual Property Rights

Intellectual property rights (IPR) in Mauritius are currently protected by two pieces of legislation, namely the Patents, Industrial Designs and Trade Marks Act of 2002 and the Copyrights Act of 2014. The government plans to adopt a new Industrial Property Bill covering all aspects of Industrial Property Rights when Parliament resumes at the end of March 2017. A draft version of the Bill is available on the government’s website . In addition to patents and trademarks, the Bill is intended to protect industrial designs, plant breeders’ rights, geographical indications, and layout designs of integrated circuits and utility models, which are not covered by existing legislation. In his 2016-17 Budget Speech, the Minister of Finance announced that the government will adhere to the Patent Cooperation Treaty, the Hague Convention, and the Madrid Protocol to facilitate the registration of patents, trademarks and industrial designs.

The government is also planning to amend the Copyrights Act of 2014. Following protest by local artists against sale of pirated CDs and the lack of infrastructure facilities and other incentives, the government set up a high-powered committee to look into all the grievances and submit a report. As of March 2017, the report was still being examined by the government.

Mauritius is a member of the World Intellectual Property Organization (WIPO) and party to the Paris and Bern Conventions for the protection of industrial property and the Universal Copyright Convention. The trademark and patent laws comply with the WTO’s Trade Related Aspects of Industrial Property Rights (TRIPS) agreement. A trademark is initially registered for 10 years and may be renewed for successive periods of 10 years. A patent is granted for 20 years and cannot be renewed. While the IP legislation in Mauritius is consistent with international norms, enforcement is relatively weak. According to a leading IPR law firm, the police will normally only take action against IPR infringements in cases where the IPR owner has an official representative in Mauritius because the courts require a representative to testify that the products seized are counterfeit. The Customs Department also requires rights holders or authorized users to register their trademarks and copyrights with its office in order to seize suspicious goods at the port. Application forms for registration can be downloaded from the Mauritius Revenue Authority/Customs’ website .

The Customs Department keeps a record of counterfeit goods seized. In 2016 the Customs Department carried out 25 seizures of a total of 30,914 goods valued at USD 127,213. The rights holder is responsible for paying for the storage and/or destruction of the counterfeit goods. Customs has ex-officio as well as de-minimis authority to seize and destroy counterfeit goods.

Mauritius is not listed in the U.S. Trade Representative’s Special 301 report or in the Department of State’s notorious market report.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles .

Embassy Contact for IPR

Shariff Jathoonia
Economic/Commercial Specialist
U.S. Embassy Port Louis, Mauritius
Tel: +230 202 4464; Fax: +230 208 9534
Email: jathoonisx@state.gov

Some IPR Law Firms in Mauritius

Sanjeev Ghurburrun
Director, Geroudis
River Court, St Denis Street
Port Louis, Mauritius
Tel: +230 210 3838: Fax: + 230 210 3912
Email: sanjeev@geroudis.com
www.geroudis.com 

Marc Hein
Chairman, Juristconsult Chambers
Level 12 Nexteracom Tower II, Ebene Cyber City
Ebene, Mauritius
Tel: +230 465 0020; Fax: +230 465 0021
Email: mhein@juristconsult.com
www.juristconsult.com 

Michael Hough
CEO, Eversheds Sutherland
Suite 310, 3rd Floor Barkly Wharf, Le Caudan Waterfront
Port Louis, Mauritius
Tel: +230 5726 3941: fax: +230 211 0780
Email: michaelhough@eversheds-sutherland.mu
www.eversheds-sutherland.com 

Capital Markets and Portfolio Investment

The government welcomes foreign portfolio investment. The Stock Exchange of Mauritius (SEM) was opened to foreign investors following the lifting of the foreign exchange controls in 1994. Foreign investors do not need approval to trade shares, except for the holding of more than 15 percent in a sugar company as detailed in the Securities (Investment by Foreign Investors) Rules 2013 . Incentives to foreign investors include free repatriation of revenue from the sale of shares and exemption from tax on dividends and capital gains.

The SEM currently operates two markets: the Official Market and the Development & Enterprise Market (DEM). Currently, the shares of 56 companies (local, global business and foreign companies) are listed on the Official Market representing a market capitalization of nearly USD 9.7billion as of February 28, 2017. Five exchange traded funds (ETFs) as well as 18 fixed income products also trade on the Official Market. SEM can list, trade, and settle equity and debt products in U.S. dollars, Euros, Pounds Sterling, South African Rand, as well as Mauritian Rupees. The DEM was launched in August 2006 and the shares of 42 companies are currently listed on this market with a market capitalization of nearly USD 1.3 billion as of February 28, 2017. Debentures of three companies are also listed on the DEM.

The stock market has attracted strong foreign investor interest, particularly over the last decade, generating positive investment inflows on many listed companies. Foreign investors accounted for 42 percent of trading volume on the exchange in 2016. Standard & Poor’s, Morgan Stanley, Dow Jones, and FTSE have included the Mauritius stock market in a number of their stock indices. Since 2005, SEM has been a member of the World Federation of Exchanges (WFE), a central reference point and standards-setter for exchanges and the securities industry in the world. SEM is also a partner exchange of the Sustainable Stock Exchanges Initiative.

The government respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions. A variety of credit instruments is available to local and foreign investors through the banking system.

Money and Banking System

Mauritius has a relatively sophisticated banking sector with 23 banks currently licensed to undertake banking business. Of the 23 banks, 2 banks provide private banking services exclusively while one bank conducts Islamic banking exclusively. Data sourced by the Global Partnership for Financial Inclusion suggests that 82 percent of Mauritians aged 15 and above have a bank account.

According to the Banking Act of 2004, all banks are free to conduct business in all currencies, including the Mauritian rupee. There are also eight non-bank deposit-taking institutions, as well as several money changers and foreign exchange dealers. There are no official government restrictions on foreigners opening bank accounts in Mauritius, but some banks may require letters of reference or proof of residence for their own due diligence. The Bank of Mauritius, the country’s central bank, carries out the supervision and regulation of banks as well as non-bank financial institutions authorized to accept deposits. The Bank of Mauritius has endorsed the Core Principles for Effective Banking Supervision as set out by the Basel Committee on Banking Supervision.

The banking system is dominated by two, long-established domestic groups, Mauritius Commercial Bank (MCB) and State Bank of Mauritius (SBM), which together hold approximately 65 percent of all Mauritian banking assets. Maubank, the third largest bank in the country, became operational in January 2016 following a merger between the Mauritius Post & Cooperative Bank and the National Commercial Bank. The latter is the ex-Bramer bank which was nationalized after revocation of its license in April 2015 for failure to meet the minimum cash reserves ratio. The Bank of China obtained a banking license in March 2016 and started operations on 27 September 2016. Other foreign banks present in Mauritius include HSBC, Barclays Bank, Bank of Baroda, Habib Bank, Banque des Mascareignes, PT Bank Maybank Indonesia, Deutsche Bank, Standard Bank, Standard Chartered Bank, State Bank of India, and Investec Bank. As of January 31, 2017, commercial banks’ total assets amounted to USD 34.7 billion.

According to the Bank of Mauritius Annual Report 2016, the ratio of non-performing loans to total credit outstanding reached 7.1 percent as at end June 2016, up from 5.0 percent from June 2015. Furthermore, Construction, Tourism, Personal and Traders accounted for 70 percent of the total impaired credit in Mauritius.

Foreign Exchange and Remittances

Foreign Exchange

The government of Mauritius abolished foreign exchange controls in 1994. Consequently, no approval is required for converting, transferring, or repatriating profits, dividends, or capital gains earned by a foreign investor in Mauritius. Funds associated with any form of investment can be freely converted into any world currency.

The exchange rate is market-determined, but a small number of institutions dominate the market with the Bank of Mauritius, the central bank, occasionally intervening. Between end February 2016 and end February 2017, the Mauritian Rupee appreciated against the British Pound Sterling and the Euro by 10.7 percent and 3.3 percent, respectively, but remained fairly stable against the U.S. Dollar.

Mauritius remains committed to transparency and adherence to best practices as set by leading institutions including the OECD, IMF, and other standards-setting bodies. OECD Global Forum recognizes Mauritius as a largely compliant jurisdiction. In December 2013, Mauritius signed a Tax Information Exchange Agreement (TIEA) and an Inter-Governmental Agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA).

Remittance Policies

There are no time or quantity limits on remittance of capital, profits, dividends, and capital gains earned by a foreign investor in Mauritius. Mauritius has a well-developed and modern banking system. There is no legal parallel market in Mauritius for investment remittances. The Embassy is unaware of any proposed changes by the government to its investment remittance policies.

Sovereign Wealth Funds

The previous Minister of Finance announced in the 2015-2016 budget that a sovereign wealth fund would be created for long term investment. As of March 2017, no such fund had been established.

The government’s stated policy is to act as a facilitator to business, leaving production to the private sector. The government, however, still controls key services directly or through parastatal companies in the power and water, television broadcasting, and postal service sectors.

The government holds controlling shares in the State Bank of Mauritius, Air Mauritius (the national airline), and Mauritius Telecom. These state-controlled companies have Boards of Directors on which seats are allocated to senior government officials. The government nominates the chairperson of each board.

The government also invests in a wide variety of Mauritian businesses through its investment arm, the State Investment Corporation. The government is also the owner of Maubank Ltd and the National Insurance Company – two companies that resulted from the fall of the British American Investment (BAI) Empire in 2015.

Two parastatal entities are involved in the importation of agricultural products: the Agricultural Marketing Board (AMB) and the State Trading Corporation (STC). The AMB’s role is to ensure that the supply of certain basic food products is constant and their prices remain affordable. The STC is the only authorized importer of petroleum products, liquefied petroleum gas and flour. SOEs purchase from or supply goods and services to private sector and foreign firms through tenders.

Audited accounts of SOEs are published in their annual reports. Mauritius is part of the OECD network on corporate governance of state-owned enterprises in Southern Africa.

Privatization Program

The government has no specific privatization program. In January 2017, the Government announced that it would no longer consider a proposal by Dubai Ports World to operate the container terminal in Port Louis under a management contract or form a strategic partnership with the Cargo Handling Corporation Limited (CHCL), a parastatal body operating in Port Louis harbor. It should be noted that there was no public tender, and unions were against this privatization effort.

Following the signature of a Reimbursable Advisory Services (RAS) agreement with the World Bank to support water reforms, the government has agreed to the recommendation of the World Bank to appoint a private operator to maintain and operate the potable water distribution system. Under the World Bank’s proposed public-private partnership, the Central Water Authority would still continue to own the distribution and supply assets, and will be responsible for business planning, setting tariffs, capital expenditure as well as monitoring and enforcing the private operator’s performance.

The National Committee for Corporate Governance (NCCG) was established under Section 63 of the Financial Reporting Act (2004) and is the coordinating body responsible for all matters pertaining to corporate governance in Mauritius. The purpose of the Committee is to: (a) establish principles and practices of corporate governance; (b) promote the highest standards of corporate governance; (c) promote public awareness about corporate governance principles and practices; and (d) act as the national coordinating body responsible for all matters pertaining to corporate governance. The latest Code of Corporate Governance for Mauritius (2016) was launched on 13th February 2017 and can be accessed online . The Financial Reporting Council (FRC), also set up under the Financial Reporting Act (2004), aims to advocate for the provision of high-quality reporting of financial and non-financial information by public interest entities and to improve the quality of accountancy and audit service.

The Ministry of Financial Services, Good Governance and Institutional Reforms was established following the December 2014 elections. This Ministry’s stated intent is to provide guidance and support for enforcement of good governance and the eradication of corruption. The Mauritius Institute of Directors (MIoD) is an independent private sector led organization that also promotes high standards and best practices of corporate governance, with additional information available on its website .

A new Corporate Social Responsibility (CSR) framework was announced in the 2016-2017 budget whereby companies would need to contribute at least 50 percent of their allocated CSR funds to a National CSR Foundation which would then channel the money to NGOs falling under priority areas identified by the government. These priority areas are poverty alleviation, educational support, social housing, family protection, people with severe disabilities, and victims of substance abuse. This contribution would increase to 75 percent in the following year. As of March 2017, the National CSR Foundation, which falls under the aegis of the Ministry of Social Integration and Economic Empowerment, is recruiting staff and identifying partner NGOs.

The prevalence of corruption in Mauritius is low by regional standards, but graft and nepotism nevertheless remain concerns and are a source of public frustration. Several high profile court cases involving corruption still dominate the news and reinforce the perception that corruption exists at the highest political levels. A former prime minister was arrested in 2015 on allegations of money laundering while a minister of the current government had to step down in 2016 on allegations of bribery. The latter has now been formally charged. In early 2017, a Member of Parliament was appointed Minister of Good Governance although he is still a defendant in a lawsuit alleging fraud. In March 2017 allegations surfaced in the press concerning possible political interference in the Financial Services Commission’s issuance of an investment banking license. Also in March 2017 the press reported that an “intimate friend” of the former Minister of Health is earning more than twice the customary salary for a position within the purview of the ministry.

Investors should know that while the constitution and law require arrest warrants be based on sufficient evidence and issued by a magistrate, police may detain an individual for up to 21 days under a “provisional charge” based on a reasonable suspicion, with the concurrence of a magistrate. Two French businessmen have claimed that in February 2015 authorities held them against their will.

In 2002, the government adopted the Prevention of Corruption Act, which led to the establishment of an Independent Commission Against Corruption (ICAC). ICAC has the power to investigate corruption and money laundering offenses and can also seize the proceeds of corruption and money laundering. The Director of ICAC is nominated by the Prime Minister. The Good Governance and Integrity Reporting Act of 2015 was announced as a measure to recover “unexplained wealth,” and came into force in early 2016. Critics of the act dislike its presumption of guilt, requiring the accused to demonstrate a legal source of questionable assets, as well as the application of the law retroactively for seven years.

According to the 2016 Transparency International (TI) Corruption Perceptions Index, Mauritius dropped in rank from 45th to 50th place worldwide, making it third in Africa behind Botswana and Cape Verde. However, according to the 2016 Mo Ibrahim Index, Mauritius remains the top ranking country in overall governance standards in Africa for the tenth consecutive year. Although Mauritius’ generally positive reputation for transparency and accountability has been hurt by some high-profile scandals, U.S. investors, in conversations with Embassy personnel, have not identified corruption as an obstacle to investment in the country.

Resources to Report Corruption

Navin Beekharry
Director-General, Independent Commission Against Corruption
Reduit Triangle, Moka, Mauritius
+230 402 6600
icacoffice@intnet.mu

Rajen Bablee
Director, Transparency Mauritius
4th Floor, FonSing Building, 12 Edith Cavell Street, Port Louis, Mauritius
+ 230 213 0796
transparency.mauritius@gmail.com

Mauritius has a long tradition of political and social stability. Civil unrest and political violence are uncommon. Inter-ethnic tensions, however, led to four days of rioting in February 1999, following the death in police custody of a popular singer from the “Creole” (African) Mauritian community. Governments since then have sought to calm ethnic tensions and stress national unity. Free and fair elections are held every five years with the last general elections held in December 2014, which took place without incident. In January 2017, the former Prime Minister stepped down and his son, whom he had appointed Minister of Finance, replaced him as Prime Minister in accordance with the constitution.

Crime, both petty and violent, can occur. Visitors should keep track of their belongings at all times due to the potential for pick-pocketing and purse-snatching, especially in crowded areas. Visitors should also avoid walking alone, particularly on beaches and at night.

According to Statistics Mauritius, total employment stood at 548,600 in 2016, slightly up from 538,300 in 2015. The unemployment rate decreased from 7.9 percent in 2015 to 7.3 percent in 2016, with a high concentration of joblessness among youth and women. The youth unemployment rate was 22.44 percent. The 38,900 unemployed people included 34 percent male and 66 percent female. The labor force in Mauritius includes approximately 28,500 foreign workers, mainly from Bangladesh, India, Sri Lanka, China and Madagascar. Most of them are employed in textile factories, but some are in construction, tuna canning, and the hotel and catering sectors.

The labor market remains relatively flexible, but is burdened by a skills mismatch between supply and demand and a shortage of skilled labor, especially at the technical and middle management level. In the 2016-2017 budget, the Minister of Finance announced that 4,000 people will be enlisted under the National Skills Development Program for training in technical skills that are in high demand and 1,000 youth will be trained in the ICT, tourism and hospitality, paramedical, and construction sectors. The budget also caters for training of seafarers and for giving the latter exemptions from paying income tax as an incentive to work in cruise ships and for shipping companies.

The 2016-2017 budget also specified that a National Employment Agency (NEA) would be created to ensure successful implementation of the announced measures. As of March 2017, the press reported that the NEA Bill would be presented in the National Assembly in May of this year. It was also mentioned in the 2016-2017 budget that a Skills Development Authority would be set up as an independent regulator. The Mauritian Diaspora Scheme Regulations 2015 were also enacted to attract skilled Mauritians living abroad to participate in the economic development of the country. The main incentives given under this scheme relate to exemptions from tax and duties.

The government establishes minimum wages administratively through the National Remuneration Board (NRB). The NRB sets minimum wages that vary by employment sector, and that increase annually based on inflation. Although trade unions often negotiate wages higher than those set by the NRB, the NRB issues Remuneration Orders for more than 90 percent of the workforce in the private sector. The National Wage Consultative Council Act of 2016 set up a Council that would be responsible for the introduction of a national minimum wage in a bid to address the growing inequality in wages.

The Employment Rights Act and the Employment Relations Act came into force in February 2009 with the main objectives of revising and consolidating existing labor and industrial relations laws, liberalizing the labor market, and enhancing the effectiveness of collective bargaining. The legislation also provided for the introduction of a Workfare Program under which laid-off workers benefit from government financial assistance for up to twelve months and have opportunities for training to increase their employability.

Trade unions are independent of government and employers. Mauritius has an active trade union movement, representing about 25 percent of the workforce, and labor-management relations are generally positive. The last major strike affecting the economy took place in 1979. The government generally seeks to avoid strikes through a system that promotes settlement through negotiation or arbitration by the Employment Relations Tribunal and the National Remuneration Board. In two recent cases, however, striking or protesting foreign factory workers have been deported rather than reaching agreement with their employers or government.

Workers’ rights are protected under the Employment Rights Act 2008. In addition, Mauritius participates actively in the annual International Labor Organization (ILO) conference in Geneva, Switzerland and adheres to ILO core conventions protecting workers’ rights.

Mauritius is eligible for the full range of OPIC investment insurance programs, and OPIC currently has an investment incentive agreement with Mauritius. Mauritius is also a member of the World Bank’s Multilateral Investment Guarantee Agency.

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Shariff Jathoonia
Economic/Commercial Specialist
+230 202-4464
jathoonisx@state.gov

Smita Bheenick
Economic/Commercial Assistant
+230 202-4430
BheenickS@state.gov