2023 Investment Climate Statements: Mauritius

Policies Towards Foreign Direct Investment

Mauritius actively seeks foreign investment. According to several surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. Mauritius outperforms all other African countries on the Human Development Index where, in 2021, it ranked 63 out of 185 countries. The 2022 Index of Economic Freedom, published by the Heritage Foundation, ranked Mauritius first among 47 countries in the Sub-Saharan Africa region and 26th globally, compared to being 30th in 2022. The index also highlighted that while property rights and judicial effectiveness are strong, government integrity is relatively weak.

The Economic Development Board (EDB) is the single gateway government agency responsible for promoting investment in Mauritius and helping guide investors through the country’s legal and regulatory requirements. The EDB operates under the EDB Act 2017 and under the purview of the Ministry of Finance, Economic Planning and Development.

In terms of investor retention policy, the EDB provides aftercare services that consider future business environment requirements for survival and/or expansion. The EDB has a customer service unit that receives investor suggestions and complaints, and it organizes workshops, investment promotion missions and roundtable sessions to inform investors about changes in investment policies. In 2021, the EDB also set up a Business Support Facility that provides facilitation and advisory services to all businesses in Mauritius:  https://business-support-portal.edbmauritius.org/business-support-facility/  

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 (NCPRA), subject to government approval. The NCPRA can be accessed on this link:  https://dha.govmu.org/Pages/Services/PRA.aspx  . A non-citizen is eligible for a residence permit upon purchasing residential property under the government-regulated Property Development Scheme (PDS), Integrated Resort Scheme (IRS), and Real Estate Scheme (RES) as long as the investment exceeds $375,000 or its equivalent in any freely convertible foreign currency.
No government approval is required in certain situations provided under the NCPRA, namely: (i) holding of immoveable property for commercial purposes under a lease agreement not exceeding 20 years; (ii) holding of shares in companies that do not own immoveable property; (iii) holding of immoveable property by inheritance or effect of marriage to a citizen under the “régime legal de communauté”; (iv) holding of shares in companies listed on the Stock Exchange of Mauritius; and (v) through a unit trust scheme or any collective investment vehicle as defined in the Securities Act.
Regarding business activities, the GoM 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 and magazine publishing, and certain operations in the tourism sector.

In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Control by foreign nationals in broadcasting was likewise capped at 49.9 percent. The IBA Act can be accessed via  http://www.iba.mu/legal.htm  .

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. However, foreign investors may be exempt from this rule subject to authorization by the Financial Services Commission. Further details can be accessed on the following link:  https://www.stockexchangeofmauritius.com/media/2124/securities-investment-by-foreign-investors-rules-2013.pdf  .

In the tourism sector, non-citizens can carry out most activities subject to conditions. These activities include operating touristic accommodations, pleasure crafts and rental agencies. Generally, the conditions include a minimum investment amount, number of rooms (for touristic accommodations), a maximum equity participation, and environmental protection conditions depending on the business activity. Non- citizens need to comply with the provisions of the Tourism Authority Act, regulations, guidelines, and code of conduct for carrying out any activity. Guidelines for operating tourism activities can be found at the following link: https://www.tourismauthority.mu/. 

In the construction sector, foreign consultants or contractors are required to apply for provisional or temporary registration with the Construction Industry Development Board (CIDB) as per the CIDB Act 2008. Details on registration procedures are available at  https://www.cidb.mu/ 

The Investment Office of the EDB screens foreign investment proposals and provides a range of services to potential investors. The EDB is a useful resource for investors exploring business opportunities in Mauritius and assists with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2022, the U.S. Embassy in Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms.

The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. The EDB then advises potential investors on specific permits or licenses required, depending on the nature of the business. Foreign investors may apply through the EDB for necessary permits; alternately, investors may apply directly to the relevant authorities. In the event an investment fails the review process, the prospective investor may appeal the decision within the EDB or with the relevant government ministry.

In response to the COVID-19 crisis, the GoM relaxed investment terms and conditions for foreign investors in 2020. For instance, the minimum investment for obtaining an occupation permit was halved to $50,000. The GoM also removed the minimum turnover and minimum amount invested for the Innovator Occupation Permit. Professionals with an occupation permit and foreign retirees with a residence permit were able to invest in other ventures without any shareholding restrictions. Their permits’ validities had also increased from three to 10 years. Foreign students who have studied in Mauritian tertiary education entities in defined study fields were eligible for a Young Professional Occupation Permit which was valid for a maximum number of three years. The permanent residence permit validity was doubled to 20 years. Non-citizens who had a residence permit under the various real estate schemes were no longer required to hold an occupation or work permit to invest and work in Mauritius. Additionally, the GoM introduced a 10-year Family Occupation Permit, which allows foreign families to invest and reside in Mauritius for a period of 10 years in exchange for a minimum contribution of $250,000 to the COVID-19 Projects Development Fund. More information is available at  https://residency.mu/.  
In 2022, the NCRPA was amended to give government more control on property ownership by non-citizens. In 2021, the GoM also introduced the premium investor certificate, which allows companies investing at least $11 million, as well as companies involved in the manufacture of pharmaceuticals and medical devices, to benefit from incentives.

Other Investment Policy Reviews

In 2018, the United Nations Conference on Trade and Development (UNCTAD) published its 2017 Report on the Implementation of the Investment Policy Review (IPR) for Mauritius.
UNCTAD worked with the GoM on the Industrial Policy and Strategic Plan, launched in December 2020, found here:  https://unctad.org/system/files/official-document/gdsinf2020d5_en.pdf  . In 2022, UNCTAD published its Catalogue for Diversification Opportunities for 233 economies inclusive of a fact sheet in Mauritius which can be consulted here: https://unctad.org/publication/catalogue-diversification-opportunities-2022 . The catalogue is informative on the national innovation systems and potential technological transformation of these economies.

In November 2021, Mauritius concluded its fifth trade policy review with the World Trade Organization. The review concluded that Mauritius’ openness to trade and its stable and robust democratic system have contributed to its economic success in recent years. The review also highlighted that, after two decades of liberalizing reforms, Mauritius has transformed into an almost duty-free economy, with the notable exception of sugar, on which Most Favored Nation tariff rates reach 100 percent. The trade policy review is available at  https://www.wto.org/english/tratop_e/tpr_e/s417_e.pdf  .

After the GoM put in place new measures to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime, in October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning AML/CFT. In January 2022, the European Union Commission likewise removed Mauritius from its list of high-risk third countries.

Business Facilitation

The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures.

The incorporation of companies and registration of business activities falls under the provisions of the Companies Act of 2001 and the Business Registration Act of 2002. All businesses must register with the Corporate and Business Registration Department (CBRD); the registration should be completed online at https://portalmns.mu/cbris/  . In 2020, the Business Registration Act was amended so that the CBRD became the central repository of business licenses and information and this is yet to be implemented. According to the amendment, all government agencies must electronically forward a copy of any permit, license, authorization, or clearance to the registrar for publication in the Companies and Businesses Registration Integrated System (CBRIS). The CBRIS is a web-based portal that allows incorporation of companies, registration of new businesses, file statutory returns, pay yearly fees, register businesses, and search for business information. The CBRIS was implemented by the CBRD in partnership with the Mauritius Network Services (MNS). As a general rule, a company incorporated in Mauritius can be 100 percent foreign owned with no minimum capital.

Upon completion of the registration process, the CBRD issues an electronic business registration card bearing a unique registration number and an e-certificate of incorporation. The e-certificate of incorporation can be verified on the CBRIS free of charge. The company can subsequently apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign. To this end, a Business Support Facility was established at the EDB in 2021. For more information, see  https://business-support-portal.edbmauritius.org/ .

In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS currently processes seven categories of permits and licenses needed to start and operate a business. Through NELS, the submission of business licensing in the health, environment, manufacturing, education, construction and land development, work and live and safety and can now be done electronically. Ultimately, the government plans to make NELS a virtual one stop platform for businesses to apply for all categories of permits and licenses.

In 2020, the Economic Development Board Act was amended to allow companies to log any obstacles relating to obtaining licenses, permits, authorizations, or other clearances; to enquire about any issue and make recommendations to government agencies; and to publish any actions taken to resolve the reported obstacles.

Mauritius also implemented the e-Registry System which allows individuals and businesses alike to electronically register all documents related to loans, transfer of rights, and land registration. Statistics on land dispute resolutions are now publicly available. An independent mechanism for filing of complaints was also implemented. The e-Registry System features an electronic dashboard for registry searches, submission of documents, online payment of registration fees, and electronic copies of registered documents.

Outward Investment

The GoM imposes no restrictions on capital outflows.  Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses.  As part of its Africa Strategy, the government established the Mauritius Africa Fund, a public company with a budget of $13.8 million to support Mauritian investment in Africa.  Through the Fund, the government participates as an equity partner for 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, Ivory Coast and Ghana to establish and manage Special Economic Zones (SEZ) in these countries. The GoM has invited local and international firms to set up operations in the SEZs.  As per the 2018 Finance Act, Mauritian companies collaborating with the Mauritius Africa Fund for development of infrastructure in the SEZs benefit from a five-year tax holiday.  To further facilitate investment, Mauritius has also signed Investment Promotion and Protection Agreements and Double Taxation Avoidance Agreements with African states.
Additionally, the Board of Investment is operating an Africa desk with the objective of supporting inward and outward investment and trade promotion missions as well as promoting the Mauritius jurisdiction with African countries.

According to the most recent figures available from the Bank of Mauritius, in 2021, gross direct investment flows abroad (excluding the offshore sector) amounted to $109 million.  The top three sectors for outward investment were manufacturing (57 percent), wholesale and retail trade, repair of motor vehicles and motorcycles (13 percent) and real estate activities (7 percent).  Investment abroad was focused mainly on developing countries, particularly in Africa, which received $78 million.  The neighboring island of Reunion (France) was the top recipient country, receiving $33 million.

Transparency of the Regulatory System

Since 2006, the GoM has reformed 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 that combines entrepreneurship and representative democracy, 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 government 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 and are publicly available.

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. The National Code on Corporate Governance encourages companies to present a balanced assessment of the organization’s financial, environmental, social, and governance performance and outlook in its annual report and on its website. 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.

Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, are publicly available and provide a substantial picture of Mauritius’ planned expenditures and revenue streams.

International Regulatory Considerations

Mauritius is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). The GoM implements its commitments to these regional economic institutions with domestic legal and regulatory adjustments, as appropriate). Mauritius is a signatory to the Tripartite Free Trade Area and the African Continental Free Trade Area (AfCFTA). AfCFTA took effect in January 2021 among countries having submitted their market access offers and ratified the Agreement. With regard to trade in goods, Mauritius benefits from preferential access on those products where the rules of origin exists. Negotiations are still ongoing regarding the Tripartite FTA, as well as the AFCTA on some outstanding issues regarding market access and rules of origin.
Mauritius has been a member of the World Trade Organization (WTO) since 1995. The GoM notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade to the extent possible. In July 2014, Mauritius notified its category A commitments to the WTO, and was among the first African countries to do so. Mauritius was also the fourth country to submit its instrument of acceptance for the Trade Facilitation Agreement (TFA). Mauritius notified its category B & C commitments and its corresponding indicative dates of implementation in 2015. It also indicated its requirements to implement category C measures. With the coming into force of the WTO Trade Facilitation Agreement (TFA) in February 2017, Mauritius is implementing all its category A commitments.
Of TFA’s 36 measures, Mauritius has classified 27 as category A, five as B, and four as C. Discussions with donors to obtain technical assistance to finance trade facilitation projects listed under category C are ongoing. Mauritius has already secured assistance from the World Bank and the World Customs Organization.
To coordinate efforts to implement the TFA, in 2015 Mauritius set up a National Committee on Trade Facilitation co-chaired by representatives from government and the private sector. Members include MRA Customs, the Ministry of Agro-Industry and Food Security, the Ministry of Finance and Economic Development, the Mauritius Chamber of Commerce and Industry and the Economic Developments Board, among others. The committee meets twice a year and discussion topics include identification of the TFA, policy recommendations of trade facilitation, dissemination of information on trade facilitation, and addressing the bottlenecks to trade due to the COVID-19 pandemic.

Mauritius is also part of the Cotonou Agreement, a 2000 treaty between the EU and the African, Caribbean and Pacific Group of States. On December 3, 2020, the EU and the Organization of African, Caribbean and Pacific States (OACPS) reached a new agreement that succeeded the Cotonou Partnership Agreement. In April 2023, the Mauritian government announced the imminent signature of the Post-Cotonou Agreement in Samoa. The partnership agreement between 27 EU member countries and 79 African, Caribbean, and Pacific (ACP) countries is a legally bidding treaty covering trade and development cooperation to address global challenges together. The agreement focuses on human rights, democracy, and governance; security; human and social development; environmental sustainability and climate change; sustainable growth; and migration and mobility.

Legal System and Judicial Independence

The Mauritian legal system is based on 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 Napoleonic 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.

In 2020, the Courts Act was amended to provide for the creation of a Financial Crimes Division within the Supreme Court and the Intermediate Court. An amendment to the Courts Act provided for the establishment of a Land Division court at the Supreme Court to expedite land dispute resolutions.

The GoM and judiciary are supportive of arbitration. Mauritius has two arbitration centers and is a party to the New York Convention 1958 and the United Nations Convention on Transparency in Treaty-based Investor State Arbitration.

Contracts are legally enforceable and binding. 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 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.
U.S. Embassy Port Louis is not aware of any recent cases of government or other interference in the court system affecting foreign investors.

Laws and Regulations on Foreign Direct Investment

The Economic Development Board Act of 2017 governs investment in Mauritius, while 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 of 2001, the Business Registration Act of 2002, the Insolvency Act of 2009, the Limited Partnerships Act of 2011, and the Foundations Act of 2012. The Economic Development Board website provides information on investment opportunities and incentives, procedures to establish a company in Mauritius, and guidance to non-citizens to work and live in Mauritius through the occupation/work permits: https://www.edbmauritius.org/. 

Competition and Antitrust Laws

The Competition Commission of Mauritius (CCM) is an independent statutory body established in 2009 to enforce Competition Act 2007. It is mandated to safeguard competition by preventing and remedying anticompetitive business practices in Mauritius. Anticompetitive business practices, also called restrictive business practices, may be in the form of cartels, abuse of monopoly situations, and mergers that lessen competition.

The institutional design of the Competition Commission houses both an adjudicative and an investigative organ under one body. While the Executive Director has power to investigate restrictive business practices (the Investigative Arm), the commissioners determine the cases (the Adjudicative Arm) on the basis of reports from the Executive Director. Any party dissatisfied with an order or direction of the commission may appeal to the Supreme Court within 21 days.

Since it began operations, the Competition Commission has undertaken 64 investigations, of which 55 have been completed and 8 were ongoing as of April 2023. To date, the commission has also conducted 335 enquiries, which are preliminary research exercises prior to proceeding to investigations. The Competition Commission also conducts market studies and has completed five of the eight market studies launched so far. It has also issued six papers to the government on policy matters affecting competition.

Regionally, the Competition Commission has assessed 208 mergers across the Common Market for Southern and Eastern Africa Free Trade Area (COMESA) member states that affected Mauritius. It has also assisted the African Competition Forum (ACF) on two cross-country market studies.

For the financial year 2021-2022, the Commission fined two suppliers of medical gases a total of Rs 3,59 million ($78,000), for having breached the prohibition against collusive agreements when supplying the Ministry of Health and Wellness between 2012 and 2022. For the financial year 2022-2023, the Competition Commission also imposed a fine of Rs. 5,4 million ($118,000) to suppliers of chemical fertilizers in Mauritius and Rs. 1,4 million ($31,000) to five producers/suppliers of deer and venison, both for the breach of provisions against collusive agreements.
In February 2023, the Competition Commission announced that it was collaborating with the COMESA Competition Commission to develop a framework for conducting joint investigations into restrictive business practices.

The Competition Commission has also initiated a process to review and amend the Competition Act of 2007 to enable more effective enforcement. The process was on-going as of May 2023.

Expropriation and Compensation

The Constitution includes a guarantee against nationalization. However, in 2015, the government passed the Insurance (Amendment) Act to enable the 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 1 billion rupees (approximately $25 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.

Dispute Settlement

ICSID Convention and New York Convention

Mauritius is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), 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. In 2014, it became a signatory of the United Nations Convention on Transparency in Treaty-based Investor State Arbitration 2014, also known as the Mauritius Convention as it was first signed in Mauritius. In August 2019, it signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention.

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 2004 is the domestic legislation providing for the enforcement of awards under the 1958 New York Convention. Because Mauritius is a party to the New York Convention without any reciprocity reservation, all foreign arbitral awards are enforceable in Mauritius. The 1969 Investment Disputes (Enforcement of Awards) Act is the domestic legislation providing for enforcement of disputes under the Washington Convention.

The GoM is party to several investment agreements recognizing international arbitration of investment disputes. Most Investment Promotion and Protection Agreements (IPPA) include an arbitration clause referring to the ICSID dispute settlement mechanism.

While Mauritius has a Trade and Investment Framework Agreement with the United States, it does not have a specific bilateral investment treaty or free trade agreement with the United States.

Investor-State Dispute Settlement

The embassy is aware of two recent investor-state disputes involving Mauritius that were heard before ICSID. The tribunal decided in favor of the Government of Mauritius in both cases.

International Commercial Arbitration and Foreign Courts

In 2011, the GoM, the London Court of International Arbitration (LCIA), and the Mauritius International Arbitration Center (MIAC) established a new arbitration center in Mauritius called the LCIA-MIAC Arbitration Center. LCIA-MIAC offered all services offered by the LCIA in the United Kingdom. In July 2018, the LCIA and GoM terminated the partnership, after which the MIAC began operating as an independent organization. In June 2022, MIAC entered into a Cooperation Agreement with ICSID based on Article 63 of the ICSID Convention and which provides the possibility for holding ICSID’s hearings at MIAC’s facilities in Mauritius. The organization’s website has additional information available at  http://miac.mu/  

Additionally, the Mauritius Chamber of Commerce and Industry (MCCI), which pioneered institutional arbitration in Mauritius, set up the MCCI Permanent Court of Arbitration in 1996. In 2012, it was rebranded as the MCCI Arbitration and Mediation Center (MARC). From July 2020, MARC has been operating under the Mediation and Arbitration Center (Mauritius) Ltd. More information is available via the following link:  https://www.marc.mu/en.  
In 2018, the arbitral institution Delos listed Mauritius as the only safe seat of arbitration in the African Union in a list of 40 safe seats worldwide.

Bankruptcy Regulations

Bankruptcy is not criminalized in Mauritius. The Insolvency Act of 2009 amended and consolidated the law relating to insolvency of individuals and companies and the distribution of assets in the case of insolvency and related matters. Most notably, the Act introduced administration procedures, providing creditors the option of a more orderly reorganization or restructuring of a business than in liquidation. A bankrupt individual is automatically discharged from bankruptcy three years after adjudication but may apply to be discharged earlier. The Act draws on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997.

There were no special procedures that foreign creditors must comply with when submitting claims in insolvency proceedings. The law provides that foreign creditors have the same rights regarding the commencement of, and participation in, an insolvency proceeding as Mauritian creditors. The Second Schedule to the Insolvency Act applies to foreign creditors with respect to the procedures for proving their debts.

The creditor must send to the liquidator of the company an affidavit, sworn by the creditor or an authorized person, that verifies the debt and contains a statement of account showing the particulars of the debt. The affidavit must also state whether the creditor is a secured creditor. Section 132 of the Act outlines the conditions under which a liquidator may be appointed for a foreign company and related procedures.

For cross-border insolvency proceedings, under the applicable regime, a foreign insolvency practitioner can apply to the Mauritian Court to obtain recognition of an insolvency process being undertaken abroad provided that the State of the insolvency practitioner has adopted insolvency rules substantially similar to the UNCITRAL Model Law on Cross-Border Insolvency. Recognition of foreign main proceedings will stay actions against the debtor, stay execution against assets of the debtor and suspend any contemplated disposal of assets of the debtor. New rules facilitating cross-border insolvency took effect in July 2019.

In 2020, the Insolvency Act was amended to give the Bankruptcy Division of the Supreme Court power to order that a deed of company arrangement be binding on the company and all classes of creditors where there are at least two classes of creditors and one of the classes resolves that the company executes the deed.

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. They can also be accessed from the website of the Economic Development Board (EDB) at https://edbmauritius.org/info-centre .

Incentives implemented to attract investors to Mauritius include: (i) reduced corporate tax rate of three percent for companies engaged in global trading activities; (ii) investment tax credit of five percent over three years on the cost of new plant and machinery excluding motor vehicles; (iii) five year tax holiday for Mauritian companies collaborating with the Mauritius Africa Fund with respect to investment in the development of infrastructure in Special Economic Zones, and; (iv) five year tax holiday on income derived from smart parking solutions or other green initiatives.

Mauritius offers prospective investors a low-tax jurisdiction and a number of other fiscal incentives, including the following: (i) flat corporate and income tax rate of 15 percent or lower depending on business activity; (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.

Additionally, the government has established a Property Development Scheme (PDS) to attract high net worth non-citizens who want to acquire residences in Mauritius. Buyers of a residential unit valued over $375,000 in certain projects are eligible to apply for a residence permit in Mauritius. The residential unit can be leased or rented out by the owner.
The Regulatory Sandbox License (RSL) was implemented to promote innovation by eliminating barriers to investment in cutting-edge technology. An RSL gives an investor fast-track authorization to conduct business activity in a sector even if there is not yet a legal or regulatory framework in place for the sector. Further details on the RSL can be accessed via the following link: https://www.edbmauritius.org/schemes  .

The government offers tax incentives to companies that make clean energy investments through provisions in the 1995 Income Tax Act, the Customs Act, and the Value Added Tax Act. The tax incentives for a company include (i) double deduction of the expenditure of a fast charger for an electric car; (ii) an annual allowance of 100 percent on the capital expenditure for the acquisition of a solar energy unit; (iii) an annual allowance of 50 percent each year for a maximum two years on the capital expenditure for the acquisition of green technology equipment; (iv) tax exemption on interest earned by a company that invests in renewable energy projects through debentures and bonds; (v) eight-year tax holiday for a company that used deep ocean water for providing air conditioning services; (vi) customs duty and value-added tax exemption on any purchase of photovoltaic systems and chargers for electric vehicles.

Mauritius relies on imports for more than 75% of its food requirements. Spurred by the disruptions to global supply chains, rising energy and commodity prices which were magnified by the Russian-Ukraine conflict in 2022, the government announced several investment incentives in the agricultural industry in its 2022/2023 budget as an import substitution strategy and to boost local production of food. These incentives include: (i) an integrated modern agricultural morcellement scheme incentivized by an eight-year tax holiday on income and an exemption from payment of registration duty; in addition, developers under this scheme will be allowed to convert up to 15 percent of that land for residential and commercial use and be exempted from payment of land conversion tax; (ii) an eight-year income tax holiday to planters engaged in sustainable agricultural practices.

In the 2022/2023 budget, the government also announced a Transit Oriented Scheme for creating mixed-use areas within a radius of 100 meters of metro stations. Under the scheme, property developers will benefit from: (i) exemptions from payment of registration duty on lease or acquisition of land to develop an approved project; (ii) accelerated annual allowances on expenses related to green technology equipment.

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 freeport has grown dramatically in its 26-year history: developed space of cold and dry warehouses, processing units, open air storage facilities, and offices increased from 5,000 square meters in 1993 to over 500,000 square meters in 2022. Due to the pandemic, trade volume increased to 261,519 metric tons in 2022 from 258,971 metric tons in 2021, and trade value increased to $801 million from $755 million during the same period. The Mauritius Freeport was ranked 1st in Africa and in the top 10 worldwide at the 2022 fDi’s Global Free Zones of the Year Awards.

As of 2023, there were 11 third-party freeport developers, three private freeport developers, and more than 220 freeport operators, representing over 4,000 jobs. Despite the current international economic crisis, third party and private freeport developers have maintained several projects and committed investments for infrastructural developments (warehouses, processing and industrial units, open air storage and offices) at the port and airport amounting to of Rs. 6 billion ($132 million) over the next three years.

Top trading partners for import in 2022 were Taiwan, China, India, Singapore, and South Africa. Top trading partners for export in 2022 were South Africa, Madagascar, Reunion, United States and Taiwan. Top goods traded through the freeport included live animals, foodstuffs and beverages, plastic, and metal products.

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 COMESA, SADC, and the IOC, Mauritius offers preferential access to a market of over 600 million consumers, representing an import potential of $100 billion. Companies operating in the freeport are exempt from corporate tax. Other investment incentives include: (i) 8-year income tax holiday to new freeport operators or private freeport developer investing at least MUR 50 million (subject to conditions as may be prescribed); (ii) duty and VAT exemptions on goods and equipment imported into freeport zones; (iii) 3 per cent tax on export of goods; (iv) preferential market access; (v) 100 per cent foreign ownership; (vi) free repatriation of profits; (vii) no foreign exchange control; (viii) reduced port handling charges.

Activities carried out in the freeport include warehousing and storage, breaking bulk, sorting, grading, cleaning and mixing, labeling, packing, repacking and repackaging, minor processing and light assembly, manufacturing activity, ship building, repairs and maintenance of ships, aircrafts, and heavy-duty equipment, storage, maintenance and repairs of empty containers, export-oriented seaport and airport based activities, freight forwarding services, quality control and inspection services, and vault activity for storing precious stones and metals, works of art, and the like.

Performance and Data Localization Requirements

The Data Protection Act (DPA) of 2017 governs the protection of personal data in Mauritius. The GoM established the Data Protection Office 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 on data controllers and processors. In 2016, Mauritius ratified the Council of Europe’s Convention for Protection of Individuals regarding Automatic Processing of Personal Data (Convention 108). Mauritius is the second non-European country and the first African country to sign the convention. The agreement gives individuals the right to protection of their personal data. In September 2020, Mauritius signed the Amending Protocol to the Convention for the Protection of Individuals regarding the Processing of Personal Data and, at the same time, deposited the instrument of ratification, becoming the sixth state to ratify the modernized Convention 108.

Mauritian data protection law tracks the European Union’s Regulation on the Protection of Natural Persons with regards to the Processing of Personal Data and on the Free Movement of such Data, commonly known as the General Data Protection Regulation. Mauritius’ DPA applies only when processing of personal data is concerned. Failure to comply with Section 28 of the DPA, which establishes the lawful purposes for which personal data may be processed, can result in a fine and up to five years imprisonment. Section 29 sets requirements for processing special categories of data, such as ethnic origin, political adherence, and mental health condition.
There are no enforcement procedures for investment performance requirements.

REAL PROPERTY

Real property rights are respected in Mauritius. A non-citizen can hold, purchase, or acquire 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.

INTELLECTUAL PROPERTY RIGHTS

Intellectual property rights (IPR) in Mauritius are protected by three pieces of legislation, namely the Industrial Property Act of 2019, the Copyright Act of 2014, and the Protection against Unfair Practices (Industrial Property Rights) Act of 2022.

The 2019 Industrial Property Act and the accompanying regulations entered into force on January 31, 2022. This act consolidates all industrial property-related issues in one statute. The protection framework covers patents; trademarks; industrial designs; utility models; layout-designs of integrated circuits; plant varieties; trade names, and geographic indications.

The Industrial Property Act also allows the international filing of trademarks under the Madrid Protocol, the international filing of industrial designs under the Hague Agreement, and the filing of patent applications under the Patent Cooperation Treaty. Both the Madrid Protocol and the Hague Agreement are in force in Mauritius since 6 May 2023. The Patent Cooperation Treaty is in force since 15 March 2023. In 2017, the Copyright Act was amended to redefine and better safeguard the interests of copyright owners and to put in place a new regulatory framework for the Mauritius Society of Authors (MASA). MASA is responsible for collection of copyright fees and for administering the economic rights of copyright owners.

Mauritius is a member of the World Intellectual Property Organization (WIPO) and party to the Paris and Berne Conventions for the protection of industrial property and the Universal Copyright Convention. Mauritius is a member of the African Regional Intellectual Property Organization (ARIPO). However, as Mauritius has not yet acceded to the Harare or Banjul Protocols, it cannot be designated in patent, trademark or design applications filed via the ARIPO system. 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 a maximum of 20 years. While IP legislation in Mauritius is consistent with international norms, enforcement is relatively weak. In practice, police will usually take action against IP infringements only in cases where the IP owner has an official representative in Mauritius, as the courts require a representative to testify that the products seized are counterfeit.

The Customs Department of the Mauritius Revenue Authority is the primary agency responsible for safeguarding Mauritian borders against counterfeit goods and piracy, and is also the competent authority that enforces IP rights. The Customs Department requires owners or authorized users of patents, industrial designs, collective marks, marks or copyrights to apply in writing to the Director General to suspend clearance of goods suspected of infringing intellectual property rights. Once an application is approved, it remains valid for two years. There are no administrative costs to pay for an application. It is recommended to file an application as a preventive measure. Customs may act upon its own initiative to suspend clearance if there is evidence that IP rights are being infringed. Customs will then contact the owner or authorized user for follow-up actions. For this reason, it is best for foreign companies to have a local representative in Mauritius. Owners of IP rights are recommended to join the Interface Public Members (IPM) which allows Customs officers to access operational data input by right owners concerning their products, thus facilitating the identification of counterfeit goods.

The Customs Department keeps a record of counterfeit goods seized. Customs has authority to seize and destroy counterfeit goods. In 2021, the Customs Department carried out seizures of a total of 30,036 goods valued at $78,030, a significant decline from pre-pandemic figures. By comparison, in 2022, the Customs Department seized 72,134 pieces of counterfeit goods for a value of $201,000. The infringing party is responsible for paying for the storage and/or destruction of the counterfeit goods. Mauritius is not listed in the 2022 U.S. Trade Representative (USTR) Special 301 Report or the 2022 Notorious Market List.

IPR Law Firms in Mauritius*
Sanjeev GhurburrunDirector, GeroudisRiver Court, St Denis StreetPort Louis, MauritiusTel: +230 210 3838; Fax: + 230 210 3912Email:  sanjeev@geroudis.com   www.geroudis.com  

Marc HeinChairman, Juristconsult ChambersLevel 12 Nexteracom Tower II, Ebene Cyber CityEbene, MauritiusTel: +230 465 0020; Fax: +230 465 0021Email:  mhein@juristconsult.com   www.juristconsult.com  

Michael HoughCEO, Eversheds SutherlandSuite 310, 3rd Floor Barkly Wharf, Le Caudan WaterfrontPort Louis, MauritiusTel: +230 5726 3941; fax: +230 211 0780Email:  michaelhough@eversheds-sutherland.mu   www.eversheds-sutherland.com  

Marius Schneider, Attorney at LawNora Ho Tu Nam, PartnerIPvocate Africa Legal Advisers LtdEbene Junction, Rue de la DemocratieEbene, MauritiusTel: +230 466 8183Email:  office@ipvocateafrica.com   www.IPvocateAfrica.com  
*Law firms listed for convenience and should NOT be taken to imply U.S. Government endorsement.

Capital Markets and Portfolio Investment

The GoM welcomes foreign portfolio investment.
The Stock Exchange of Mauritius (SEM) was created in 1989 and was opened to foreign investors following the lifting of foreign exchange controls in 1994. Foreign investors do not need approval to trade shares, except for when doing so would result in their holding more than 15 percent in a sugar company, a rule detailed in the Securities (Investment by Foreign Investors) Rules of 2013. Incentives to foreign investors include no restrictions on the repatriation of revenue from the sale of shares and exemption from tax on dividends for all resident companies and for capital gains of shares held for more than six months.

The SEM currently operates two markets: the Official Market and the Development and Enterprise Market (DEM). As of March 2023, the shares of 58 companies (local, global business, and foreign companies) were listed on the Official Market, representing a market capitalization of $6.8 billion. Unique in Africa, the 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. A variety of new asset classes of securities such as global funds, depositary receipts, mineral companies, and specialist securities including exchange-traded funds and structured products have also been introduced on the SEM. In June 2021, guidelines for the issue and listing of sustainable bonds were published. The DEM was launched in 2006 and the shares of 42 companies were listed on this index with a market capitalization of $1.1 billion as of March 2023.

Standard & Poor’s, Morgan Stanley, Dow Jones, and FTSE have included the Mauritius stock market in a number of their stock indices. Since 2005, the SEM has been a member of the World Federation of Exchanges. The SEM is also a partner exchange of the Sustainable Stock Exchanges Initiative. In 2021, the SEM secured a $600,000 grant from the African Development Bank to implement a state-of-the-art trading platform. The new automated trading platform was launched in May 2022 and incorporates desktop trading for brokers, with services such as data distribution, remote deal brokering, and custodian banking, as well as the ability to trade such asset classes as derivatives. The new automated system also incorporates a surveillance system for real-time surveillance of market activities and raising alerts in the incidence of market abuse or irregular trading practices.
In June 2021, a new Securities (Amendment) Act 2021 was passed with the aim of strengthening the capital market sector in Mauritius in line with the key recommendations of the Financial Sector Blueprint Report issued in 2018. Key changes introduced by the Amendment Act include the establishment of additional securities exchanges alongside the existing Stock Exchange of Mauritius Ltd; the establishment of novel clearing and settlement facilities in addition to the Central Depository and Settlement Co. Ltd (CDS); the introduction of a new concept of “retail investors”, being investors, other than sophisticated investors, and thereby recognizing foreign funds whose securities are marketed to retail investors in or from Mauritius; and dispensing with the need for foreign reporting issuers to be registered with the Financial Services Commission. Subsequently, in October 2021, Afrinex Ltd., a pan-African international exchange, was launched, becoming the second official securities exchange in Mauritius, besides SEM. The Afrinex Clearing House, a wholly owned subsidiary of Afrinex Ltd., was also established, becoming the second clearing house alongside the Central Depository and Settlement Co. Ltd.

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 sophisticated banking sector. As of June 2022, 19 banks were licensed to undertake banking business, of which six were local banks, ten were foreign-owned subsidiaries, and three were branches of foreign banks. The Non-Banking Deposit Taking Institutions (NBDTIs) were mainly in the leasing and finance business, with six NBDTIs in operations in June 2022. Further details can be obtained at https://www.bom.mu/financial-stability/supervision/licensees/list-of-licensees  .

In 2022, the Mauritian financial services sector accounted for an estimated 11.6 per cent of GDP, with monetary intermediation services accounting for 5.8 per cent, financial leasing and other credit granting services accounting for 0.5 per cent, insurance, re-insurance and pension services accounting for 1.8 percent, and other services accounting for 5.8 per cent. The aggregate assets of the banking sector represented 374.0 per cent of GDP in June 2022, from 420.7 per cent in December 2021. The banking landscape is relatively concentrated, with the two, long-established domestic entities, the Mauritius Commercial Bank (MCB) and the State Bank of Mauritius (SBM), which together constitute about 46 percent of banking sector’s deposits, 53 percent of loans and 47 percent of assets as at December 2022. Maubank, a state-owned bank, became operational in 2016 following a merger between the Mauritius Post & Cooperative Bank and the National Commercial Bank. The Bank of China started operations in Mauritius in 2016. Other foreign banks present in Mauritius include HSBC, Barclays Bank, Bank of Baroda, Habib Bank, BCP Bank (Mauritius), Standard Bank, Standard Chartered Bank, State Bank of India, and Investec Bank. Per the Bank of Mauritius, total banking assets as of end June 2022 amounted to MUR 2.1 trillion ($46 billion).

According to the Bank of Mauritius (BOM)’s December 2022 Financial Stability Report, the country held adequate foreign exchange reserves buffer to face external shocks. The Gross Official International Reserves (GOIR) was $7.6 billion as at end-June 2022, representing 16.3 months of import cover and was within the stringent assessing reserve adequacy metric, per the Report. In 2022, supply shocks, related to the pandemic and the Russia-Ukraine war, induced high domestic inflation. Headline inflation rose to 11.8 per cent in December 2022. In response, the BOM adopted monetary tightening policies to curb inflationary pressures and anchor inflations expectations, rising the key repo rate to 2.25 per cent in June 2022 and further to 4.5 per cent in December 2022.

The fall of the rupee, which depreciated 20 percent against the U.S. dollar between January 2020 and March 2022, coupled with soaring freight costs and high commodity prices in the wake of the war in Ukraine, drove inflation to 11.8 percent in December 2022 from 1 percent in March 2021. In 2022, the rupee continued to weaken further against the dollar as U.S. economic indicators strengthened and as the Federal Reserve raised interest rates. In April 2022, the central bank injected $200 million into the financial system, the largest single intervention in its history. It intervened again in October 2022 to sell $40 million on the domestic market, and in November 2022 to sell $100 million. Altogether, since the outbreak of the pandemic, the central bank intervened on the foreign exchange market for a total of $3.5 billion.

In January 2023, the central bank announced the introduction of a new monetary policy framework to enhance the monetary policy transmission mechanism and strengthen the effectiveness of the monetary policy. The new framework is a flexible inflation targeting regime whereby headline inflation has been set within a range of 2-5 per cent. It aims to mitigate constraints of the previous framework, which include excess liquidity, a lack of a nominal inflation anchor, and multiple objectives potentially conflicting with the price stability objective.

Mauritian banks are compliant with international norms such as Basel III, IFRS 9, US Foreign Account Tax Compliance Act (FATCA), and the OECD’s Common Reporting Standard (CRS).

According to the Banking Act of 2004, all banks are free to conduct business in all currencies. There are also six non-bank deposit-taking institutions, as well as 12 money changers and foreign exchange dealers. There are no official government restrictions on foreigners opening bank accounts in Mauritius, but banks may require letters of reference or proof of residence for their due diligence.

The Bank of Mauritius (BoM) launched a clearing center for renminbi (RMB) payments in December 2022. The Mauritius Renminbi Clearing Centre became the third such center on the African continent, after South Africa and Zambia. The center’s aim is to facilitate trade with the People’s Republic of China (PRC) by reducing exchange rate costs and allowing Mauritian importers to request PRC suppliers’ s invoices in RMB. Mauritian banks can then use the local RMB center for international settlement. Current use of the RMB center is limited.

The Bank of Mauritius 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.

In July 2017, the Banking Act was amended to double the minimum capital requirement from $ 5.8 million to $11.2 million. The Central Bank began reporting the liquidity coverage ratio in 2017 to improve the liquidity profile of banks and their ability to withstand potential liquidity disruptions.

As part of its COVID-19 response, the BoM made $132 million available through commercial banks as special relief funds to help meet cash flow and working capital requirements. The cash reserve ratio applicable to commercial banks was reduced from 9 percent to 8 percent. The BoM also put on hold the Guideline on Credit Impairment Measurement and Income Recognition, which took effect in January 2020.

In July 2019, the Bank of Mauritius Act was amended to allow the Bank of Mauritius to use special reserve funds in exceptional circumstances and with approval of the central bank’s board for the repayment of central government external debt obligations, provided that repayments would not adversely affect the bank’s operations. This provision was used in January 2020 to repay government debt worth $450 million, raising concerns about the central bank’s independence. The Mauritius Investment Corporation (MIC), a fully owned subsidiary of BoM, was also established with an initial capital of $2 billion drawn from the BoM’s reserves to provide support to economic operators through a range of equity and quasi-equity instruments. The IMF highlighted that in response to the pandemic and in coordination with the government, the BoM deployed policies that led to a substantial deterioration of its balance sheet and could make it challenging to fulfill the price-stability mandate going forward. In its June 2022 International Monetary Fund Article IV report, it has recommended that the central bank relinquishes ownership of the MIC, refrains from further transfers to the government and from quasi-fiscal financing, to strengthen its operational independence and financial position.

Most major banks in Mauritius have correspondent banking relationships with large banks overseas. In recent years, according to industry experts, no banks have lost correspondent banking relationships, and none reported being in jeopardy of doing so as of April 2022. The National Payment Systems (Authorization and Licensing) Regulations, which entered into force in June 2021, provides for the authorization of operators of payment systems, clearing systems, and settlement systems and licensing of payment service providers.

In October 2021, the Bank of Mauritius launched the Climate Change Centre, which will integrate climate-related and environmental financial risks into its regulatory, supervisory, and monetary policy frameworks, while also supporting the development of sustainable finance. In February 2021, the BoM became a member of the Global Financial Innovation Network (GFIN). The BoM is currently working on a central bank digital currency (CBDC) pilot roll-out with technical assistance from the IMF.

In January 2019, the Bank of Mauritius signed a memorandum of cooperation with the Mauritius Police Force on financial crimes and illicit activities relating to the financial services sector. In February 2020, the Financial Action Task Force (FATF) named Mauritius as a jurisdiction under increased monitoring, commonly known as the Grey List. At that time, Mauritius made a high-level political commitment to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its AML/CFT regime. Since the completion of its Mutual Evaluation Report in 2018, Mauritius has made progress on a number of its recommended actions to improve technical compliance and effectiveness, including amending the legal framework to require legal persons and legal arrangements to disclose of beneficial ownership information and improving the processes of identifying and confiscating proceeds of crimes. In October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning anti-money laundering/combating the financing of terrorism (AML/CFT) based on the following reforms: (i) outreach work to promote understanding of money-laundering and terrorist financing risks and obligations; (ii) development of effective risk-based supervision plans for the regulator; (iii) improved focus on access to beneficial ownership information in a timely manner; and (iv) training to law enforcement authorities to ensure that they have capabilities to carry out money laundering investigations. In January 2022, the European Union Commission removed Mauritius from its list of high-risk third countries.

Effective March 2019, the Financial Services Commission (FSC) allows businesses that provide custodial services for digital assets. The FSC is the integrated regulator for the non-banking financial services sector and global business. In August 2020, the Peer-to-Peer Lending Rules, which enable the operation of peer-to-peer lending platforms in Mauritius by operators holding licenses issued by the FSC, entered into force. And in November 2021, the FSC launched the regulatory framework for crowdfunding. The Virtual Asset and Initial Token Offering Services Act 2021, which sets out a comprehensive legislative framework to regulate the business activities of virtual assets service providers and initial token offerings, entered into force in February 2022. Any person who is a virtual asset service provider, an issuer of initial token offerings in accordance with the Act, or a custodian (digital assets) in accordance with the Financial Services Act, needs to apply for a license or registration with the FSC.

In December 2021, the FSC published the FSC Guidelines to set out the legal and supervisory framework surrounding the issuance of Corporate and Green Bonds. The FSC Guidelines further supplements the “Guide for the Issue of Sustainable Bonds in Mauritius” issued by the Bank of Mauritius in June 2021 with a view to assist potential issuers in better understanding the legal and regulatory requirements for the issue and listing of sustainable bonds on exchanges licensed in Mauritius.

Foreign Exchange and Remittances

Foreign Exchange

The GoM 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 generally market-determined though the Bank of Mauritius, the central bank, occasionally intervenes. Between January 2021 and January 2022, the Mauritian rupee depreciated against the U.S. dollar by 5.6 percent, the pound by 11.7 percent, and the euro by 7.7 percent. Due to the COVID-19 crisis, the Bank of Mauritius intervened regularly on the domestic foreign exchange market in 2020, 2021, and 2022. Altogether, since the outbreak of the pandemic, the central bank intervened on the foreign exchange market for a total of $3.5 billion. The latest IMF Article IV Report highlighted the fact that while the current intervention strategy has provided markets with much needed foreign exchange liquidity, its rigidity poses risks going forward.

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. The Bank of Mauritius (BOM), which is the central bank, compiles remittance statistics from banks and foreign exchange dealers to meet the requirements of two different initiatives at the national level, notably, the National Migration and Development Policy and the United Nations Sustainable Development Goals (SDGs). Per the BOM, Mauritius is already compliant with Target 10c of the United Nations Sustainable Development Goals (SDGs), that is, to reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent by 2030.

Sovereign Wealth Funds

The GoM does not have a Sovereign Wealth Fund. However, in October 2022, the Mauritius Investment Corporation (MIC), an investment vehicle set up under the aegis of the Bank of Mauritius to financially assist companies impacted by COVID-19, officially announced that it had become an associate member of the International Forum of Sovereign Wealth Funds (IFSWF), and indicated that through this membership, it was demonstrating its commitment and willingness to uphold the IMF Santiago Principles based on good governance, accountability, and transparency.

Privatization Program

The government has no specific privatization program. In 2017, however, as part of its broader water reform efforts, the government agreed to a World Bank recommendation to appoint a private operator to maintain and operate the country’s potable water distribution system. Under the World Bank’s proposed public-private partnership, the Central Water Authority (CWA) would continue to own distribution and supply assets, and will be responsible for business planning, setting tariffs, capital expenditure, and monitoring and enforcing the private operator’s performance.

In March 2018, despite protest by trade unions and consumer associations, the Minister of Energy and Public Utilities reiterated his intention to engage by the end of the year a private operator as a strategic partner to take over the water distribution services of the CWA. To date, this has not materialized. The government has said for years it planned to sell control of MauBank, into which it has injected about $173 million since it nationalized the bank in 2015. In the 2019-2020 budget speech, the prime minister said the government would sell non-strategic assets to reduce government debt. In 2020, a Steering Committee on the Disposal of Non-Strategic Assets has been set up by -government to, amongst others, identify the assets of government to be disposed of and advise on the optimal disposal process in the best public interest. The Committee has recommended the disposal of government’s shareholdings in some public companies, including the Casinos, the MauBank Ltd, and the National Insurance Company Ltd. The process for the disposal of these assets was ongoing as of May 2023.

Climate Issues

Mauritius is highly vulnerable to climate change and its impacts on socio-economic development. The Climate Change Act, which took effect in 2021, created an inter-ministerial council on climate change chaired by the prime minister to set national targets and objectives. The cabinet must approve all decisions that fall under this law. This act also provided for the creation of a Department on Climate Change under the Ministry of Environment, which is now operational.

In November 2021, at the Conference of Parties 26 (COP 26), the GoM pledged to reduce its greenhouse gas emissions to 40 percent by 2030. To achieve this target, the government plans to undertake major reforms in its energy, transport, waste, refrigeration and air-conditioning, agriculture, and conservation sectors. Details on the reforms for each of the six sectors will be available in the Nationally Determined Contributions (NDCs) action plan, which is scheduled for publication in April 2022.  The Ministry of Environment is also working on policies to reach net-zero carbon emissions by 2070, and on a national mitigation strategy and action plan. The latter includes the development of an online NDC registry, which will serve as a monitoring, reporting, and verification tool to track biodiversity and ecosystem services to implement Mauritius’ NDC.  The registry will record data on Mauritius’ adaptation and mitigation actions as well as financial and technological support required and received.

The current NDC indicates that the government plans to finance part of the $ 6.5 billion required to implement the NDC targets through private sector contributions. The private sector in Mauritius has indicated interest in investing in solar, hydro, and biomass renewable energy technologies.

Regulatory incentives that preserve clean air and biodiversity include: (i) exemption on excise duty applied for the purchase of a 180-kw electric car; (ii) 50 percent excise duty applied for the purchase of a hybrid car; (iii) 50 percent of registration fee applied for the purchase of both a 180-kw electric car and a hybrid car; (iv) excise duty on PET plastic bottles; (v) a petroleum levy on petroleum products; (vi) an environmental protection fee for battery and tyres upon purchase of an electric or hybrid car, (vii) a carbon levy upon purchase of a conventional motor car; and (viii) a permit fee for companies operating in a marine protected area.

The government also offers tax incentives to companies who make clean energy investments through provisions in the Income Tax Act 1995, the Customs Act, and the Value Added Tax Act.  The tax incentives for a company include (i) double deduction of the expenditure of a fast charger for an electric car; (ii) an annual allowance of 100 percent on the capital expenditure for the acquisition of a solar energy unit; (iii) an annual allowance of 50 percent (straight line) on the capital expenditure for the acquisition of green technology equipment; (iv) tax exemption on interest perceived by a company that invests in renewable energy projects through debentures and bonds; (v) eight-year tax holiday for companies that use deep ocean water for providing air conditioning services; (vi) customs duty and value added tax exemptions on any purchases of photovoltaic systems and chargers for electric vehicles.

The tax incentives government provided on solar energy equipment encouraged investments in power production from solar energy. Statistics indicate that solar energy power production increased by 3.5 percent from 2018 to 2020.

The government announced additional incentives in its 2022-2023 budget: (i) introduction of a Carbon Neutral Loan Scheme by the Industrial Finance Corporation of Mauritius Ltd (IFCM) over 7 years at a preferential rate of 3 per cent; (ii) concessionary leasing at 3.5 per cent per annum by IFCM to companies renewing their company fleet to electric only; (iii) leasing facilities of 3 per cent per annum over 10 years to transport operators for the acquisition of electric vehicles and charging infrastructure; (iv) loan of up to Rs 3 million at the rate of 0.5 per cent to taxis and van operators over a period of 7 years for the purchase of electric vehicles; (v) abolition of excise duty on hybrid and electric vehicles (vi) a Negative Excise Duty Scheme to encourage the purchase of electric vehicles. This scheme provides for a refund of 10 per cent of the value of importation up to a maximum of Rs 200,000 ($4,444) on the purchase of an electric vehicle by: an individual purchasing an electric vehicle irrespective of the electric motor power; and a company purchasing an electric vehicle of up to 180 kilowatt. The introduction of mandatory Minimum Energy Performance Standards for Air Conditioners was also announced.

The European Union is currently providing technical assistance to the government to improve its public procurement policies under the ‘Switch to Green’ facility. The objective of the project is to encourage public organizations to make their activities more environmentally friendly through the adoption of sustainable consumption practices with respect to energy and water conservation, waste minimization, paperless work, and adoption of sustainable technology and business practices to improve service delivery.

RESOURCES TO REPORT CORRUPTION

Navin BeekarryDirector-GeneralIndependent Commission Against CorruptionReduit Triangle, Moka, Mauritius+230 402 6600 icacoffice@intnet.mu 

Rajen BableeDirectorTransparency Mauritius4th Floor, Fon Sing Building, 12 Edith Cavell Street, Port Louis, Mauritius+ 230 213 0796 transparency.mauritius@gmail.com