Mauritius2007 Investment Climate Statement - Mauritius Openness to Foreign Investment Mauritius is among the most competitive and successful economies in Africa and actively seeks foreign investment. In the World Bank’s 2007 Doing Business Survey, Mauritius ranks 32nd among 175 countries and second in Africa, after South Africa, for ease of doing business. The government of Mauritius' (GOM’s) objective is for Mauritius to rank among the top ten most investment- and business-friendly locations in the world. ECONOMIC REFORM: The government which took office in July 2005 has embarked on a bold economic reform program aimed at moving Mauritius from a reliance on trade preferences to global competitiveness. The reform strategy, outlined in the budget for fiscal year 2006-07 (July-June), is designed not only to remedy fiscal weaknesses but also to open up the economy, facilitate business, improve the investment climate, mobilize foreign direct investment and expertise, attract the Mauritian diaspora back to the country, and introduce structural reforms to support sustainable growth. The budget also proposes fundamental reforms to the tax system, aiming to make it simple, transparent and easy to comply. Both the personal and corporate tax rates will be gradually lowered within the next three years and brought to a single flat rate of 15 percent by July 2009. Tariff liberalization, which started several years ago in an effort to transform Mauritius into a duty-free island, will be complete in the next three years. In FY 2006-07, the budget brought down the top tariff rates of 65, 55, and 40 percent to 30 percent. Another important element of investment climate improvement measures is labor market reform aimed at substantially increasing flexibility, replacing the current tripartite wage-setting mechanism with a National Wages Council, and relaxing the need to seek approval for lay-offs. BUSINESS FACILITATION: To eliminate bureaucratic obstacles to start a business, the Business Facilitation Act 2006, which was passed by Parliament after the budget, abolishes the need for trade licenses. It also provides that, effective October 1, 2006, entrepreneurs can start new activities within three working days on the basis of self-adherence to guidelines set by the authorities, who will exercise ex-post control for compliance. Also, residence permits and work permits for foreign investors and professionals have been combined into an occupation permit, which is now processed within three working days. Investment in Mauritius is governed by the Business Facilitation Act of 2006 and the Investment Promotion Act of 2000. Investment regulations are consistent with the WTO's Agreement on Trade Related Investment Measures (TRIMS). The government of Mauritius (GOM) does not discriminate between local and foreign investment. Foreigners are allowed to own 100 percent equity in a local company. The GOM has designated the Board of Investment (BOI) as a one-stop focal agency for business registration. BOI acts as the facilitator for all forms of investment in Mauritius and guides investors through the necessary processes for doing business in the country. Regulations governing incorporation are contained in the Companies Act of 2001. After receipt of a certificate of incorporation from the Registrar of Companies, all companies must register their business activities with the BOI to be able to apply for occupation permit and other facilities offered to investors. INVESTMENT OPPORTUNITIES: Mauritius has realized a remarkable economic transformation from a mono-crop economy based on sugar production to a diversified economy resting on export-oriented manufacturing, tourism, and financial and business services sectors. Mauritius has also embarked on an ambitious program to make Mauritius the financial and business hub for high value-added technology and other intellectually advanced industries. The emerging sectors are: (i) Information and Communication Technology, (ii) Seafood and Marine Industry, (iii) Textile and Fashion, (iii), Manufacturing and Light Processing, (iv) Logistics and Distribution, (v) Biomedical Industry, (vi) Knowledge Industry, (vii) Hospitality and Property Development, (viii) Agro-Processing and Biotechnology, (ix) Financial Services, and (x) Land-Based Oceanic Industry. The location of Mauritius, situated in the Indian Ocean between Africa, Asia, and Australia, offers a successful business base for both regional and international trade. U.S. companies can use Mauritius as a platform to tap regional markets through Mauritius’ membership in the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), which offer preferential access to a market of 380 million consumers. U.S. businesses can also use Mauritius to get preferential access to the Indian market through the recent Comprehensive Economic Cooperation and Partnership Agreement signed between Mauritius and India. INVESTMENT INCENTIVES: Government incentives for investment include: a low corporate tax rate of 15 percent; exemption from customs and excise duties on imports of equipment and raw materials; exemption from tax on dividends and capital gains; a low rate of 5 percent registration duty for notarial deeds; free repatriation of profits, dividends, and capital; and reduced tariffs for electricity and water. Moreover, the government has set up the Integrated Resorts Scheme (IRS) to attract high net worth non-citizens desiring to acquire an immoveable property of not less than USD 500,000 in Mauritius (within a resort approved by the BOI) for personal residence. The investor and his/her spouse and dependents are granted resident permits to live in Mauritius. More detailed information on the incentives is available on BOI’s website: www.investmauritius.com. Conversion and Transfer Policies The GOM abolished foreign exchange controls in 1994. Consequently, no approval is required for the repatriation of profits, dividends, and capital gains earned by a foreign investor in Mauritius. In general, businesses have no difficulty obtaining foreign exchange. However, the domestic foreign exchange market has remained tight during 2006 mainly due to expanding current account and government budget deficits as well as the shortfall in sugar export proceeds as a result of the announced sugar export price reduction by the European Union. Exporters have been holding on to their export proceeds thereby causing a gap between supply and demand for foreign exchange. An inter-bank foreign exchange market in U.S. dollars was established in July 1994 through a page on the Reuters screen. Prior to that, the Mauritian rupee was pegged to a basket of currencies, which included the U.S. dollar, the pound sterling, the French franc, and others. The exchange rate is market-determined, but the market is dominated by a small number of institutions. The Central Bank occasionally intervenes to stabilize the market. There is convertibility on both capital and current accounts. Settlement can be done in foreign currency, and foreign currency accounts can be opened in Mauritius. There is no legal parallel market in Mauritius for investment remittances. Mauritius has a well-developed and modern banking system. At the end of September 2006, net international reserves amounted to approx. USD 2.2 billion, representing close to nine months of imports. Between October 2005 and October 2006, the Mauritian rupee, on average, appreciated vis-a-vis the Japanese yen (0.9 percent) but depreciated against the U.S. dollar (6.1 percent), the euro (4.5 percent), and the pound sterling (4.8 percent). Expropriation and Compensation Legislative guarantees against nationalization exist and are respected. The GOM has never nationalized an industry. Dispute Settlement A joint venture involving a U.S. investor has been engaged in a lengthy dispute with Mauritius Telecom, its cellular subsidiary, Cellplus, and the former Telecommunications Authority, over allegations of unfair competitive practices by Mauritius Telecom and Cellplus. The case remains in the courts. There has been no case of expropriation in Mauritius thus far. Mauritius is a member of the International Center for the Settlement of Investment Disputes and the Multilateral Investment Guarantee Agency of the World Bank. The Mauritian legal system is largely based on English and French law. Criminal and civil litigation is mainly English while substantive law is modeled on the French Napoleonic code. The domestic legal system is generally non-discriminatory and transparent. Members of the judiciary are independent of the legislature and the government. The highest court of appeal is the judicial committee of the Privy Council of England. Mauritius is a member of the International Court of Justice. Right to Private Ownership and Establishment Under the Non-Citizens (Property Restriction) Act, a non-citizen investor may acquire property in Mauritius with the prior approval of the Prime Minister. However, the Prime Minister’s approval is not required when the property is acquired (i) under a lease agreement not exceeding 20 years, (ii) under the Integrated Resort Scheme for the purchase of a villa, or (iii) when the investor has obtained approval from the Board of Investment (BOI) to acquire property for use in his/her business. Any foreign investor engaged in an economic activity generating an annual turnover exceeding Rs 3 million (approx. USD 95,000) may obtain BOI’s approval to acquire immoveable property in the name of his/her business. Protection of Property Rights Property rights are respected. Mauritius maintains a sophisticated and impartial legal system based on both Napoleonic code and British common law. The system protects all tangible property. Intellectual property rights are protected by the Copyrights Act of 1997 and the Patents, Industrial Designs and Trade Marks Act of 2002, which are in line with international norms. 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 Patents, Industrial Designs and Trade Marks Act of 2002 was introduced by the government, in part, as a response to the rise in the production and trade of counterfeit goods, such as Ralph Lauren, Nike, Reebok, Caterpillar, Guess, Diesel, Calvin Klein, and Oakley. In 2004, Polo Ralph Lauren (PRL) successfully sued local manufacturers and retailers of PRL counterfeit products in Mauritian courts, which resulted in the closure of the counterfeit operations. 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. The new trademark and patent laws comply with the WTO's Trade Related Aspects of Industrial Property Rights (TRIPS) agreement and protects designs, brands, and technological inventions. Also, the law dictates that well-known international trademarks are protected, whether they are registered in Mauritius or not. However, while copyrights are being effectively enforced by the Police and Customs authorities, trademark enforcement is problematic. According to a leading IPR law firm, the Police are not taking action against trademark infringements because they have been advised by the State Law Office that trademark enforcement is not within their scope of work, despite the fact that trademark infringement is by law a criminal offence. Furthermore, the GOM's Industrial Property Office (IPO), which also has power to enforce trademarks, has not carried out any enforcement since its creation. Only in cases where the trademark owner has a commercial representative in Mauritius is enforcement possible under the Prevention of Unfair Practices (Industrial Property) Act 2002, based on unfair competition instead of trademark infringement. Transparency of the Regulatory System Mauritius has built its success on a free market economy. The business environment is one of the most inviting in Africa. Mauritius also has a long-standing tradition of government and private sector dialogue which allows the private sector to effectively voice its views on the development strategy of the country. The Joint Economic Council is a key vehicle in this regard. In July 2006, the government brought radical reforms to trade, investment, tariff, income tax, and labor regulations to simplify the framework for doing business. Trade licenses and many other bureaucratic hurdles have been abolished. Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. In order to combat 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. On December 12, 2006, the National Assembly adopted a new and more transparent Public Procurement Bill. The objective of the new bill, which repeals and replaces the Central Tender Board Act, is to establish a Central Procurement Board to cater for all forms of procurement by public bodies. This World Bank-approved bill makes provision for the establishment of a Procurement Policy Office manned by a Director and two other independent persons and responsible for formulating policies and issue directives for the operation of a transparent and efficient public procurement system. Provision is also made to enable a bidder or potential bidder to challenge the procurement proceedings of a public body at any stage and request the Chief Executive Officer of the public body to consider his complaint and, where appropriate, take remedial action. The bill also establishes an Independent Review Panel to which appeals against decisions of a Chief Executive Officer may be brought. Thus, a simplified two-tier process is available to unsatisfied persons to seek remedy. Capital Markets and Portfolio Investment Mauritius has a well-developed financial services sector and aims to become a regional financial center. The Stock Exchange of Mauritius (SEM) has shown a satisfactory record of performance in terms of the volume of transactions, the number of listed companies, market capitalization, and the fairness and efficiency of its operations since its launch in 1989. In December 2006, the Stock Exchange of Mauritius had 43 companies, including two mutual funds, listed on the Official Market and 32 Over-The-Counter companies. Market capitalization grew from USD 92 million in 1989 to about USD 4 billion in December 2006. In November 2005, the SEM was admitted as a member of the World Federation of Exchanges, which identifies the SEM as having assumed the commitment to prescribed business standards. The Mauritius stock market was opened to foreign investors following the lifting of the foreign exchange controls in 1994. No approval is required for the trading of shares by foreign investors unless investment is for the purpose of legal and management control of a Mauritian company or for the holding of more than 15 percent in a sugar company. Incentives to foreign investors include free repatriation of revenue from the sale of shares and exemption from tax on dividends and capital gains. Mauritius has an active offshore financial sector, which is a major route for foreign investments into the Asian sub-continent. Mauritius is the number one source of foreign direct investment in India, thanks mainly to the favorable Double Taxation Avoidance Treaty between Mauritius and India. Foreign direct investment transiting through the Mauritian offshore sector to India amounted to USD 1.74 billion during the first quarter of the Indian fiscal year starting in April 2006, according to figures released by the Indian Ministry of Trade and Industry. Major U.S. corporations use the Mauritius offshore sector to channel their investment to India. Mauritius has a relatively sophisticated banking sector with 19 banks licensed to undertake banking business. The Banking Act of 2004, which replaced the Banking Act 1988, removed the distinction between domestic (Category 1) and offshore (Category 2) banks and provided for banking business to be conducted under a single banking license regime. Accordingly, all banks are free to conduct business in all currencies, including the Mauritian rupee. There are also several non-bank financial institutions which are authorized to conduct deposit-taking business. Two Mauritian banks, the Mauritius Commercial Bank Ltd. and the State Bank of Mauritius Ltd., account for about 75 percent of the market share. Both banks are among the 10 largest banks in Africa. Foreign banks present in Mauritius include the Hong Kong and Shanghai Banking Corporation (HSBC), Barclays Bank, Bank of Baroda, Habib Bank, South East Asian Bank, Banque des Mascareignes, PT Bank Internasional Indonesia, Deutsche Bank, Standard Bank, Standard Chartered Bank, and Investec Bank. The banks focus mostly on trade financing and on provision of working capital. Accounts may be opened in all major currencies as well as the Mauritian rupee. Several commercial banks offer card-payment services, such as credit and debit cards and direct debits. Other facilities, including phone banking, home banking, internet banking, and PC banking, are also provided by some banks. Commercial banks offer spot and forward transactions in all major currencies. Commercial banks have diversified into non-banking business through subsidiaries and affiliates. Banks are engaged in the provision of leasing, stock brokering, asset and fund management, investment and private banking business, insurance agency, and portfolio and custodial management. As of September 2006, commercial banks' total assets amounted to approximately USD 17 billion. The Bank of Mauritius, the Central Bank, carries out the supervision and regulation of banks as well as non-bank financial institutions authorized to accept deposits. A new Bank of Mauritius Act, which strengthened the central bank’s institutional framework as well as its supervisory powers, was enacted in October 2004. The Central Bank has also endorsed the Core Principles for Effective Banking Supervision as set out by the Basel Committee on Banking Supervision. Political Violence Mauritius has a long tradition of political and social stability and is internationally recognized for its well-established democracy. However, inter-ethnic tensions led to four days of rioting in February 1999, following the death in police custody of a popular minority singer. Governments since then have sought to calm ethnic tensions and stress national unity. Strikes and politically motivated violence are rare. Three political activists were murdered in 1996. The leader and several members of a small political party were arrested in December 2000 and charged with this crime. One of them was found guilty and sentenced to 21 years imprisonment. General elections in July 2005 brought about a new government and were carried out without any major incident. Corruption Mauritius is one of Africa's least corrupt countries. It is among the countries which have recorded a significant improvement in perceived levels of corruption, according to the 2006 Corruption Perceptions Index of Transparency International. Mauritius is ranked 42nd out of 163 countries, and is second in Africa, after Botswana. Corruption is not seen as an obstacle to foreign direct investment. The government has passed laws and established institutions to combat corruption and money laundering. In February 2002, the GOM adopted the Prevention of Corruption Act, which led to the setting up of an Independent Commission Against Corruption (ICAC) in June 2002. ICAC has the power to detect and investigate corruption and money laundering offenses and can also forfeit the proceeds of corruption and money laundering. In February 2002, the government also passed the Financial Intelligence and Anti-Money Laundering Act, which provided for the establishment of a Financial Intelligence Unit, which is operational. There has been much emphasis on good governance in the last few years by both the government and the private sector. In 2001, the government appointed a joint public and private sector Committee on Corporate Governance in Mauritius. In October 2003, Mauritius published and adopted a Code of Corporate Governance. The recent World Bank report on “Governance Matters 2006” ranks Mauritius at the second place among African countries where norms in matters of good governance are respected in enterprises. Bilateral Investment Agreements 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 TIFA Council, comprising of representatives from both governments, plans to hold its first meeting in Mauritius in early 2007. There is also an investment incentive agreement between Mauritius and the Overseas Private Investment Corporation (OPIC). Mauritius has signed Investment Promotion and Protection Agreements with 33 countries: Barbados, Belgium, Benin, Botswana, Burundi, Cameroon, Chad, China, Comoros, the Czech Republic, India, Indonesia, France, Germany, Ghana, Guinea, Luxemburg, Madagascar, Mauritania, Mozambique, Nepal, Pakistan, Portugal, Romania, Rwanda, Senegal, Singapore, South Africa, Swaziland, Sweden, Switzerland, U.K., and Zimbabwe. Agreements with the following countries are awaiting signature: Chile, Egypt, Ethiopia, Korea, Lesotho, Malawi, South Korea, Tanzania, Turkey, Uganda, and the United Arab Emirates. OPIC and Other Investment Insurance Programs Mauritius is eligible for the full range of OPIC's investment insurance programs. It is also a member of the Multilateral Investment Guarantee Agency. Labor As of June 2006, Mauritius had a total labor force of 546,200, including 329,900 males and 162,300 females. Total employment stood at 492,200, including 16,700 foreign workers, mainly from China, India, Madagascar, Sri Lanka, Bangladesh, and South Africa, and mostly employed in textile factories but also in construction, tuna canning, and hotel and catering sectors. The unemployment rate had risen steadily since 1991 to reach almost 10.4 percent in June 2005, representing about 50,000 unemployed. In December 2006, however, it fell slightly to 9.4 percent. The GOM administratively establishes minimum wages, which vary according to the sector of employment, through the National Remuneration Board (NRB), and it mandates minimum wage increases annually based on inflation. However, most trade unions 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. In the GOM June 2006 budget speech, the Minister of Finance announced that the government will soon carry out major reforms to increase flexibility in the labor market, replace the current tripartite wage setting mechanism with a National Wages Council, disband the National Remuneration Board and the current system of Remuneration Orders, and relax the need to seek approval for lay-offs. Wages are low by Western standards but high by most Asian and African standards. Factory workers in the Export Processing Zone generally earn between USD 200-USD 250 per month. Middle managers earn between USD 700 and USD 1,000 per month. Fringe benefits, including transport and meal allowances, paid leave, and bonuses, represent about 25 to 30 percent of the basic payroll of employees. While Mauritius has an active trade union movement, labor-management relations are generally good. Unionized workers, which account for less than 25 percent of the workforce, act responsibly and rarely disrupt business. There has not been a major strike since 1979. Under the Industrial Relations Act, unions have the legal right to strike. However, the government seeks to preempt strikes through a system which promotes settlement through negotiation or arbitration by the Permanent Arbitration Tribunal and the National Remuneration Board. Workers' rights are protected under the Mauritius Labor Act of 1975. Mauritius participates actively in the annual ILO conference in Geneva and adheres to ILO conventions protecting worker rights. Foreign Trade Zones/Free Ports The Mauritius Freeport (free-trade zone) was established in 1992 as 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 380 million consumers, representing an import potential of USD 90 billion. Situated in 50 hectares of land adjacent to port facilities and a modern container terminal, the Freeport offers 115,000 square meters of world-class infrastructure, including cold rooms, dry storage, an international trade exhibition center, processing units, and office space for transshipment, consolidation, storage, and processing activities. Freeport facilities are also available at the airport. Port Louis is increasingly used by major shipping lines (i.e. Maersk/Sealand, P&O Nedloyd, and MSC) as a regional container transshipment hub. Activities that can be carried out in the Freeport include warehousing and storage, breaking bulk, sorting, grading, cleaning and mixing, labeling, packing and re- packing, minor processing, transshipment, cash & carry sales, export-oriented port based activities, export- oriented airport based activities, freight forwarding, express courier services, mail order, simple assembly, reshipment, quality control, and inspection services. As of December 2006, 350 Freeport companies were engaged in activities such as re-export, transshipment, minor processing, and assembly. In 2005, the Freeport imported USD 406 million and re-exported USD 497 million worth of goods. Main products re-exported include: machinery and electronic equipment (54 percent); apparel and accessories (13 percent); seafood (9 percent); chemical and pharmaceutical products (3 percent); textile yarns and fabrics (5 percent); and jewelry (2 percent). In 2005, the principal export markets for the Freeport were the United Arab Emirates, Madagascar, Italy, France, and Reunion Island. The Freeport sources its imports from a wide range of countries. In 2005, the major suppliers included Panama, Cook Islands, Saudi Arabia, Hungary, Denmark, Kuwait, Argentina, and Sierra Leone. The main products imported include foodstuffs, chemicals and pharmaceuticals, telecommunication equipment, textile fabrics and accessories, ready-made garments, electrical goods, and general consumer goods. The Freeport facilities for warehousing, breaking bulk, and re-export should be of particular interest to American companies. These services enable businesses to ship containerized goods to Mauritius, warehouse them in secure, low-cost facilities, then break bulk and re-export them in an efficient and timely manner to African and Indian Ocean rim destinations. Modern computerized warehouse/logistics facilities, including cold rooms and processing centers, are provided by the private developers. These include Freeport Operations (Mauritius) Ltd (http://www.freeport-mauritius.com), Mauritius Freeport Development Co. Ltd (http://www.mfd.mu), and Froid Des Mascareignes (http://www.seafoodhub.com). Goods can also be assembled in the Freeport for export to the African and Indian Ocean markets. Current assembly and processing activities in the Freeport include: jewelry and precious stones, PET plastic bottles, transformation of fish into fillets, aluminum frames and fittings, and re-packaging of pharmaceuticals. Three U.S. companies are present in the Mauritius Freeport. Expeditors International (Mauritius) Ltd, a subsidiary of Expeditors International of Washington Inc., is a freight logistics company providing freight forwarding services, supplier consolidation, and quality control. Boxmore Plastics (Mauritius) Ltd., which started operations in Mauritius in 2002, is 100 percent owned by Chesapeake Corporation, headquartered in Richmond, VA. It manufactures PET (polyethylene teraphthalate) preforms for the soft drink bottling companies in Mauritius, Reunion, Madagascar, and Seychelles. Casamar (Mauritius) Ltd., a subsidiary of U.S.-based Casamar Holdings, Inc., which specializes in the assembly and repair of nylon-braided tuna purse seine nets, opened an office in Mauritius which provides marketing support for its fishing net repair and assembly operations in Seychelles. The GOM, in collaboration with the private sector, is actively 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. A one-stop shop was established in August 2004 in the port area to help facilitate administrative clearances related to the seafood industry. In June 2005, a leading Mauritian company in partnership with Spanish investors opened a tuna loin processing plant (Thon des Mascareignes Ltd.), with a daily processing capacity of 300 tons for export to Europe and the U.S. for final processing and packaging. U.S. company Bumble Bee has a tuna supply and processing agreement with Thon des Mascareignes Ltd. The Board of Investment, in collaboration with Airports of Mauritius Ltd., plans to develop an air cargo terminal and a dedicated air cargo logistics center at the airport. The main activities targeted include re-export of high value/low volume products, light assembly operations, warehousing, labeling and repackaging, sea-air/air-sea and transshipment cargo, express courier, and freight forwarding services.
While Mauritius was very successful in attracting foreign direct investment (FDI) in the 1970's, there has been a decline in the growth of FDI since the mid-1980's, particularly in the manufacturing sector. However, FDI has started to pick up again since 2005, led by the tourism sector, particularly the Integrated Resort Scheme for the construction of luxury villas, golf courses, and related amenities in resort areas. The following statistical tables, supplied by the Bank of Mauritius (Central Bank), show inflow of FDI in Mauritius by sector and country of origin (2003-2006). However, these figures may under-represent the actual amounts of FDI because foreign investors' dealings no longer have to go through the central bank since the abolition of foreign exchange controls in 1994. - Foreign Direct Investment by Sector, 2003-2006
- Foreign Direct Investment by Country of Origin, 2003-2006
Source: Bank of Mauritius * Figures for 2006 are for the period January-September only Major sources of FDI in Mauritius are France, India, South Africa, and the U.K. FDI from the United States is negligible with the exception of 2004, when it was the single most important source of FDI as a result of the purchase of equity by U.S. firm Covance Laboratories Ltd in a local monkey-breeding company. In the first nine months of 2006, the U.K. and Switzerland accounted for most FDI inflows in Mauritius, directed mainly to the Integrated Resort Scheme. There is one U.S. investor in the Mauritius Export Processing Zone. Mauriden Ltd, owned by a U.S. investor, was one of the first companies to operate in the EPZ more than 30 years ago. It is involved in diamond cutting and polishing as well as jewelry. As indicated in the Freeport section above, three U.S. companies (Expeditors International, Boxmore, and Casamar) are present in the Freeport zone. MIC-USA Inc., a subsidiary of Millicom International Cellular, is a joint venture partner (50 percent shareholding) with local company Emtel Ltd in the provision of cellular phone service in Mauritius. Ceridian (Mtius) Ltd., a subsidiary of Ceridian Inc., started operations in Mauritius in 2000 and specializes in software development and payroll and human resource solutions for European, U.S., and Canadian markets. Other U.S. businesses operating in the domestic Mauritian market include Caltex, which is a wholly-owned subsidiary of U.S. Texaco Corporation. Microsoft, IBM, and Oracle have regional distribution offices in Mauritius, serving the Indian Ocean region. KFC, Pizza Hut, McDonald's, and Toys-R-Us have been operating in Mauritius for a number of years, all through local franchisees. UPS and FedEx also have offices in Mauritius. More recent U.S. investments in Mauritius include Teleforma Inc. which is engaged Business Process Outsourcing activities, focusing on customer relations management for U.S. clients. Covance Laboratories Ltd, a subsidiary of Covance Inc., holds 43 percent of the share capital of Noveprim Ltd., a local company involved in the breeding of monkeys for export to U.S. and European medical research laboratories. In 2006, Covanta Energy established a joint venture with local company Gamma Civic Ltd to build, own, and operate a USD 160 million waste-to-energy project in Mauritius. The 20 MW power plant is expected to utilize 300,000 metric tons of solid waste annually. Plans for the project are still underway. Several French and British companies in joint ventures with Mauritian partners have invested in the ICT sector in Mauritius as a result of the government's determination at the beginning of this decade to develop Mauritius into a cyber island. Other leading international companies, including Accenture, InfoSys (India), Hinduja (India), and Huawei (China), have started Business Process Outsourcing activities, call centers, disaster recovery and business continuity centers, and software development. Significant investment has been made by Indian companies in the past couple of years. Indian Oil Ltd. invested USD 18 million in fuel storage terminals and retail distribution outlets. Universal Breweries Ltd. opened up a beer factory with a total investment of USD 9 million. Mahanagar Telephone Mauritius Ltd. (MTML) started international long distance telephone service as well as fixed phone services in competition with the local utility (Mauritius Telecom), in early 2006. It inaugurated its mobile phone and wireless internet service in December 2006. The State Bank of India acquired 51 percent equity in a local domestic bank for the sum of USD 8 million. In mid 2006, Sagar Hotels & Resorts started the construction of 250-room hotel, estimated at USD 47 million. More recently, Indian companies have expressed interest in investing in ethanol production, wind energy production, and healthcare. Apollo, an Indian firm focused on high-tech hospitals, has already signed a joint venture agreement with a local partner to build a USD 30 million 200-bed hospital in Mauritius. The Shanxi Tianli Enterprise Group, a Chinese firm which is already operating a spinning plant in Mauritius, is planning to invest USD 100 million in infrastructural works for the establishment of a Trade and Economic Zone near the Mauritius port. The total cost of the Trade and Economic Zone project, supported by the Chinese government, is estimated at about USD 320 million and is expected to attract Chinese investors in a wide range of sectors, including textile and apparel, light engineering, manufacturing, fish processing, and high-tech operations. The Chinese government is encouraging Chinese businessmen to invest and operate in the zone in order to tap the regional markets of COMESA and SADC. Following his late 2006 investment promotion missions in Europe, Asia, and South Africa, the Minister of Finance announced potential investment by British, Malaysian, South African, and Danish companies in property development (through the Integrated Resort Scheme), seafood, information technology, and banking. Investment opportunities in Mauritius are available in the following sectors: ethanol production, spinning, information and communication technology, tourism, seafood and aquaculture, land-based oceanic industry (exploiting deep-sea cold water for various applications), hospitality and real estate development (including hotels and integrated resort/luxury villas), energy, education and training, and healthcare. CAPITAL OUTFLOWS: In Mauritius, there are no restrictions on capital outflows. Tourism accounted for a relatively large share of the total outward investment during the period 2004-2006, followed by manufacturing. During the same period, Maldives, Mozambique, Madagascar, and Seychelles received more than half of Mauritian investments. Outward FDI was estimated at USD 22 million for the first nine months of 2006, with significant investment directed to the agricultural sector in Mozambique, the tourism sector in the Maldives and Seychelles, and the manufacturing sector in Madagascar. The GOM strongly supports regional integration. The Mauritius Commercial Bank Ltd, the largest banking corporation in Mauritius, has established a strong presence in the Indian Ocean region with operations in Reunion, Madagascar, Seychelles, and Mozambique as well as in France. The State Bank of Mauritius, another important local bank, has established banking operations in India and Madagascar. Outward FDI in the garments industry emerged in 1990, when the low-end operations were relocated to lower wage countries in the region. The first major move was by Floreal Knitwear, one of the largest apparel manufacturing entities in Mauritius, which began relocating to Madagascar in 1990 and is the largest textile manufacturer there. CIEL Textile Group, which owns Floreal Knitwear, also opened two garment factories in India in 2005-2006 and plans to invest in a sweater factory in China. The African Growth and Opportunity Act (AGOA) also provided the impetus for several other textile companies operating in Mauritius to open factories in the region, mainly Madagascar and Mozambique. Other Mauritian investments on the African mainland relate to the use of expertise in the sugar industry to rehabilitate and manage sugar production in Mozambique, Tanzania, Ivory Coast, and Madagascar. In December 2006, a Mauritian sugar consortium won a bid for the taking over of 51 percent of shares in a sugar factory in Uganda. Long-established conglomerates like the Rogers Group, IBL Group, the Currimjee Group, the Food and Allied Industries Group, the Altima Group, and the British American Investment Ltd. have established foreign subsidiaries in commerce, poultry, and financial non-banking services, principally in Madagascar. Mauritius Telecom and Emtel, a subsidiary of the Currimjee group, have also invested in the telecommunications sector in Madagascar and Seychelles. The following tables provide statistics on FDI outflows by country and sector of investment during the period 2003-2006. Direct Investment Abroad by Sector, 2003-2006
Direct Investment Abroad by Host Country, 2003-2006
Source: Bank of Mauritius * Figures for 2006 are for the period January-September only |
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