Mauritius is an island nation with a population of 1.3 million people. The Government of Mauritius (GoM) claims an Exclusive Economic Zone (EEZ) of approximately 2.3 million square kilometers, but its undisputed EEZ amounts to approximately 1.3 million square kilometers, in addition to jointly managing about 388,000 square kilometers of continental shelf with Seychelles. Mauritius has maintained a stable and competitive economy. Real GDP grew at an average of 4.7 percent from 1968 to 2017, enabling the country to achieve middle-income status in less than 50 years. In 2019, Mauritius’ GDP was 14 billion USD and its gross national income per capita surpassed 12,900 USD. In July 2020, the World Bank classified Mauritius as a high-income country based on 2019 data, but most analysts forecasted that Mauritius would likely revert below high-income status in 2021 due to the effects of the Covid-19 pandemic.
The pandemic severely damaged the economy. While the government was relatively successful in mitigating the health impact – only 10 people died from the virus in 2020 – tourism, which contributed around 20 percent to the economy, disappeared. Export demand, specifically textile manufacturing, also declined. The IMF estimated that GDP growth contracted 14.2 percent in 2020, the country’s worst economic performance in four decades. Statistics Mauritius estimated significant contractions in the 2020 growth rate in sectors such as accommodation and food services (-67.4 percent), construction (-25.4 percent), manufacturing (-20.1 percent), and commerce (-12 percent). The IMF forecasted that the country’s economy would rebound with a 9.9 percent growth in 2021, but a second lockdown that began in March 2021 could change that estimate.
According to the World Bank’s Ease of Doing Business Index 2020, Mauritius ranked first in Africa and 13th worldwide out of 190 countries. Unemployment was estimated at 6.7 percent at the end of 2019, while inflation forecasted for 2020 was 2.8 percent.
One of the poorest countries in Africa at independence in 1968, Mauritius has become one of the continent’s wealthiest. It successfully diversified its economy away from sugarcane monoculture to a manufacturing and services-based economy driven by export-oriented manufacturing (mainly textiles), tourism, financial and business services, information and communication technology, seafood processing, real estate, and education/training. Before Covid-19, authorities planned to stimulate economic growth in five areas: Serving as a gateway for investment into Africa, increasing the use of renewable energy, developing smart cities, growing the blue economy, and modernizing infrastructure, especially public transportation, the port, and the airport. In 2020, however, officials focused on keeping sectors afloat whose customers disappeared due to the pandemic.
Government policy in Mauritius is pro-trade and investment. The GoM has signed Double Taxation Avoidance Agreements with 46 countries and maintains a legal and regulatory framework that keeps Mauritius highly ranked on “Ease of Doing Business” and good governance indices. In recent years, Mauritius has been especially intent on attracting foreign direct investment from China and India, as well as courting more traditional markets like the United Kingdom, France, and the United States. The China-Mauritius free-trade agreement went into effect on January 1, 2021. Mauritius also signed a preferential trade agreement with India in February 2021, and it took effect in April 2021. The Mauritian government promotes Mauritius as a safe, secure place to do business due to its favorable investment climate and tradition as a stable democracy. Corruption in Mauritius is low by regional standards, but recent political and economic corruption scandals illustrated there was room for improvement in terms of transparency and accountability. A commercial dispute between a foreign investor and a parastatal partner that has turned into a criminal investigation, for instance, has raised questions of governmental impartiality.
1. Openness To, and Restrictions Upon, Foreign Investment
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. For the 12th consecutive year, the World Bank’s 2020 Doing Business report ranked Mauritius first among African economies, and 13th worldwide, in terms of overall ease of doing business. It also outperforms all other African countries on the Human Development Index where, in 2020, it ranked 67 out of 189 countries. The 2021 Index of Economic Freedom, published by the Heritage Foundation, ranked Mauritius first among 47 countries in the Sub-Saharan Africa region and 13th globally, compared to being 21st in 2020. However, the index said that the government would need to reverse its negative trend in government integrity, which registered at a level typical of countries that were ranked lower in economic freedom.
The Economic Development Board (EDB), formerly the Board of Investment, is the single gateway government agency responsible for promoting investment in Mauritius, and for helping guide investors through the country’s legal and regulatory requirements.
In terms of investor retention policy, the EDB provided aftercare services that considered future business environment requirements for survival and/or expansion. The EDB has a customer service unit that took investor suggestions and complaints. EDB also organized workshops and roundtable sessions to inform investors about changes in investment policies.
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. A foreigner can acquire residential property and apartments under the government-regulated Property Development Scheme (PDS). The NCPRA was amended in December 2016 to allow foreigners to purchase certain types of properties, as long as the amount paid is over 6 million Mauritian rupees (approximately 172,000 USD). A non-citizen is eligible for a residence permit upon the purchase of a house under the PDS if the investment made is more than 500,000 USD. More information is available at http://dha.pmo.govmu.org/English/Mandate/Pages/Non-Citizens-Property-Restriction.aspx.
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. More information is available at www.dha.govmu.org.
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 or 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. Similarly, control by foreign nationals in broadcasting was limited to 49.9 percent. Furthermore, a foreign investor cannot hold 20 percent or more of a company that owns or controls any newspaper or magazine, or any printing press publishing such publications. 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.
In the tourism sector, there are conditions on investment by non-citizens in the following activities: (i) guesthouse/tourist accommodation; (ii) pleasure craft; (iii) diving; and (iv) tour operators. Generally, the conditions include a minimum investment amount, number of rooms, or a maximum equity participation, depending on the business activity.
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 provides assistance with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2020, 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. EDB then advises the potential investor on specific permits or licenses required, depending on the nature of the business. Foreign investors can also apply through the EDB for necessary permits. In the event an investment fails review, the prospective investor may appeal the decision within the EDB or to 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 amount for obtaining an occupation permit was halved to 50,000 USD. The minimum turnover and minimum amount invested for the Innovator Occupation Permit was removed. Professionals with an occupation permit and foreign retirees with a residence permit were able to invest in other ventures without any shareholding restrictions. 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.
The conditions relating to the acquisition of property developed under the Property Development Scheme (PDS) and Smart City Scheme (SCS) were also loosened. The minimum price of a property that buyers could use to then apply for a residence permit dropped to 375,000 USD from 500,000 USD.
In 2020, the Non-Citizens (Employment Restriction) Act was amended to enable the following categories of individuals to engage in any occupation without the need for a permit: (a) the holder of an occupation permit issued under the Immigration Act; (b) the holder of a residence permit issued under the Immigration Act; (c) a non-citizen who has been granted a permanent resident permit under the Immigration Act; and (d) a member of the Mauritian diaspora under the Mauritian Diaspora Scheme.
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. The GoM also requested UNCTAD’s assistance to craft a strategic investment plan.
Mauritius’ other most recent third-party investment policy reviews through multilateral organizations were completed in 2014. In June 2014, the Mauritius Government conducted an investment policy review with the Organization for Economic Cooperation and Development (OECD). The review concluded that, while policies and legislation in Mauritius support private sector development, incentive schemes tend to bias investment towards real estate and property development. In October 2014, the Mauritius Government also conducted a trade policy review with the World Trade Organization (WTO). A new trade policy review was expected to start in May 2020.
In February 2020, the Financial Action Task Force (FATF) placed Mauritius on the list of jurisdictions under increased monitoring concerning anti-money laundering/combating the financing of terrorism (AML/CFT). The European Union also concluded that Mauritius had strategic deficiencies in its AML/CFT regime under Article 9 of its 4th Anti-Money Laundering Directive and in October 2020 added Mauritius to its list of high-risk countries.
The Mauritian government 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 Registrar of Companies. In 2020, the Business Registration Act was amended to highlight that the Registrar of Companies shall be the Central Repository of business licenses and information. Accordingly, every public sector agency shall 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”). As a general rule, a company incorporated in Mauritius can be 100 percent foreign owned with no minimum capital. According to the World Bank 2020 Doing Business report, while the procedure for registering a company takes one day, actually starting a business takes 4.5 days.
After the Registrar of Companies issues a certificate of incorporation, foreign-owned companies must register their business activities with the EDB. The company can then 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.
In partnership with the Corporate and Business Registration Department (a division of the Ministry of Finance and Economic Development), the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System, a web-based portal that allows electronic submission for incorporation of companies and application for the Business Registration Number, file statutory returns, pay yearly fees, register businesses, and search for business information.
In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS is a single point of entry for the processing of permits and licenses needed to start and operate a business. The submission of business licensing (including Building and Land Use Permit, Occupation Certificate, etc.) can now be done electronically with the implementation of the National Electronic Licensing System.
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 report and publish any actions taken.
Mauritius also implemented the e-Registry System, where a national register of real estate properties and statistics on land dispute resolutions were publicly available. A mechanism for filing of complaints was also implemented. The e-Registry System featured an electronic dashboard for registry searches, submission of documents, online payment of registration fees, and electronic copies of registered documents.
The Mauritian government 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 has established the Mauritius Africa Fund, a public company with $13.8 million capitalization to support Mauritian investment in Africa. Through the Fund, the government participates as an equity partner up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa. The government has signed agreements with Senegal, Madagascar, and Ghana establishing and managing Special Economic Zones (SEZ) in these countries and 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.
Since 2012, the Board of Investment (now restructured as the Investment Office of the EDB) has been operating an Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa. It acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa.
In 2019, the most recent figures available from the Bank of Mauritius, gross direct investment flows abroad (excluding the offshore sector) amounted to 96 million USD. The top three sectors for outward investment were financial and insurance activities (24 percent), accommodation and food service activities (18 percent), and real estate activities (8 percent). Investment abroad was focused mainly on developing countries, particularly in Africa, which received 32 million USD. Seychelles was the top recipient country, receiving 15 million USD.
2. Bilateral Investment Agreements and Taxation Treaties
In 2006, Mauritius and the United States signed a Trade and Investment Framework Agreement (TIFA) aimed at strengthening and expanding trade and investment ties between the two countries. The United States has not signed a bilateral investment treaty or a free trade agreement with Mauritius. Mauritius benefits from duty free and quota free access to the United States on approximately 6,500 tariff lines through the African Growth and Opportunity Act (AGOA). This trade preference is valid until 2025 unless Mauritius graduates out of AGOA before then by moving up to high-income country status as defined by the World Bank. In 2020, even though the World Bank upgraded Mauritius to high-income status, the U.S. government did not put Mauritius on track to graduate from AGOA.
Mauritius has been a member of the World Trade Organization since 1995 and has signed trade agreements with several regional blocs and countries. These include the Common Market for Southern and Eastern Africa Free Trade Area (COMESA), the Indian Ocean Commission (IOC – only Madagascar offers trade preferences under the IOC), the interim Economic Partnership Agreement with the European Union (EU), the Southern African Development Community Free Trade Area (SADC), a free trade agreement with Turkey, and a preferential trade agreement with Pakistan.
In January 2021, the free-trade agreement between China and Mauritius, the first free-trade agreement between China and an African country, took effect. Also in January 2021, the African Continental Free Trade Area Agreement (AfCFTA) took effect. India and Mauritius signed their Comprehensive Economic Cooperation Partnership Agreement (CECPA) in February 2021, and it took effect in April 2021.
The UK-ESA EPA also entered into force in January 2021 after the Brexit transitional period ended on the last day of 2020. This EPA, which Mauritius, Seychelles, and Zimbabwe signed in January 2019, was a continuity agreement based on the EU-ESA interim Economic Partnership Agreement (iEPA).
Mauritius has signed Investment Promotion and Protection Agreements (IPPA) with 45 countries. The following 30 IPPAs have been ratified and are in force: Barbados, Belgium/Luxemburg Economic Union, Burundi, China, Czech Republic, Egypt, Finland, France, Germany, Indonesia, Kuwait, Madagascar, Mozambique, Pakistan, Portugal, Cabo Verde, Republic of Congo, Romania, Senegal, Singapore, South Africa, South Korea, Sweden, Switzerland, Tanzania, Turkey, United Arab Emirates, United Kingdom, and Zambia. The following 15 IPPAs have been signed but await ratification: Benin, Cameroon, Chad, Comoros, Cote d’Ivoire, Gabon, Ghana, Guinea, Kenya, Mauritania, Nepal, Rwanda, Eswatini, Sao Tome and Principe, and Zimbabwe.
In 2013, Mauritius signed a Tax Information Exchange Agreement (TIEA) and an Inter-Governmental Agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA).
Mauritius has concluded 46 Double Taxation Avoidance Agreements (DTAAs) and is party to a series of treaties under negotiation. The treaties currently in force are: Australia (Partial), Belgium, Botswana, Cape Verde, Congo, Croatia, Cyprus, Egypt, France, Germany, Ghana, Guernsey, India, Italy, Jersey, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Malta, Monaco, Mozambique, Namibia, Nepal, Oman, Pakistan, Bangladesh, China, Rwanda, Seychelles, Singapore, Sri Lanka, South Africa, Qatar, Eswatini, Sweden, Thailand, Tunisia, Uganda, United Arab Emirates, United Kingdom, and Zambia. Six treaties await ratification: Gabon, Comoros, Kenya, Morocco, Nigeria, and Russia. Six treaties await signature: Cote d’Ivoire, Estonia, Gibraltar, Malawi, the Gambia and Angola. Another 21 treaties were being negotiated: Algeria, Burkina Faso, Canada, Czech Republic, Greece, Hong Kong, Lesotho, Montenegro, Sudan, Portugal, Iran, Saudi Arabia, Senegal, Spain, St. Kitts & Nevis, Tanzania, Vietnam, Yemen, Zambia, Mali, and Turkey.
Mauritius has adopted the OECD’s Standard for Automatic Exchange of Financial Account Information (Common Reporting Standard – CRS), which sets a global benchmark that participating countries will adhere to in a proactive fiscal-information world. The first reporting under this standard was undertaken in September 2018.
3. Legal Regime
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. 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 substantially full 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 Mauritius Government 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. Negotiations are still ongoing regarding the Tripartite FTA.
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, among the first African countries to do so. Mauritius was 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 of 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, amongst others. The committee meets twice a year and discussion topics include identification of sources of financing for category C commitments and resolution of non-tariff barriers in Mauritius.
Mauritius is also part of the Cotonou Agreement, a 2000 treaty between the European Union and the African, Caribbean and Pacific Group of States. The Cotonou Agreement was extended until November 2021 and negotiations were held to finalize a post-Cotonou Agreement. This new agreement was finalized in December 2020 and was expected to take effect in December 2021. It will focus 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 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 Mauritian government as well as the judiciary are supportive of arbitration. Mauritius is a party to the New York Convention 1958, the United Nations Convention on Transparency in Treaty-based Investor State Arbitration, and has two arbitration centers.
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.
The Embassy 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.
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 55 investigations, of which 45 have been completed and 10 are ongoing as of March 2021. To date, it has also conducted 281 enquiries, which are preliminary research exercises prior to proceeding to investigations. The Competition Commission has also assessed 143 mergers across the Common Market for Southern and Eastern Africa Free Trade Area (COMESA) member states that affected Mauritius.
Since 2018, the Competition Commission has initiated a process to review and amend the Competition Act of 2007 to enable more effective enforcement. The process is expected to be completed in 2021.
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. The government enacted this law in the immediate aftermath of the financial scandal explained below.
In April 2015, the Bank of Mauritius, the central bank, revoked the banking license of Bramer Bank, the banking arm of Mauritian conglomerate British American Investment (BAI) Group, citing an inadequate capital reserve ratio. As a result, Bramer Bank entered receivership and by May 2015 the receiver had transferred the assets and liabilities of Bramer Bank to a newly created state-owned bank, the National Commercial Bank Ltd., thus effectively nationalizing Bramer Bank. In January 2016, the Mauritian government merged the National Commercial Bank with another government-owned bank, resulting in Maubank, a new bank dedicated mainly to servicing small- and medium-sized enterprises. The GoM owns over 99 percent of Maubank shares. Efforts to privatize the bank in 2018 did not produce any results.
The government likewise took over much of Bramer’s parent, the BAI Group. The FSC placed the BAI Group in conservatorship, alleging fraud and corporate mismanagement in BAI’s insurance business. Following passage of the Insurance (Amendment) Act in 2015, the FSC created the National Insurance Company, which took over the BAI Group’s core insurance business, and the National Property Fund, which took over other BAI Group assets, including a hospital and several retail outlets. CIEL Healthcare, a local private company, bought the hospital in 2017.
In 2015, BAI’s former chairman filed a dispute against the GoM with the United Nations Commission on International Trade Law (UNCITRAL), alleging that the government illegally appropriated BAI’s assets. The former chairman, who is a Mauritian-French dual national, claimed that Mauritius had breached the Mauritius-France bilateral investment treaty and requested the restitution of his assets and payment of compensation. The tribunal concluded that it lacked jurisdiction over the dispute and ruled in favor of the GoM. The former chairman has appealed this decision. In May 2019, the former chairman filed a case in the Supreme Court to challenge the appointment of the liquidator for the Bramer Banking Group.
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.
Investor-State Dispute Settlement
The Mauritian government 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.
The embassy is aware of a dispute between a U.S. company that operates in Mauritius and a parastatal partner. After an apparent commercial impasse, in early 2020 the parastatal board filed a criminal complaint against the CEO of the U.S. company, who is a U.S. citizen. The accused, whom police did not take into custody but forbade to leave the country pending investigation, alleged that the parastatal filed the complaint to gain leverage in the commercial dispute. Both the commercial and criminal disputes continued through early 2021.
Recent investor-state disputes involving Mauritius and heard before ICSID include the following:
The Doutremepuich v. Mauritius arbitration began in 2018 due to an investment dispute over the ownership of three locally incorporated enterprises for the construction and operation of a forensic DNA and paternity testing laboratory in Mauritius. The investor claimed that the GoM terminated the project after approving it. The arbitral tribunal decided in favor of the GoM because the court lacked jurisdiction to hear the claims.
The Gosling and Others v. Mauritius arbitration began in 2016 and was related to a dispute over investments in two tourist resorts. The investors claimed that GoM policies, namely changes to its planning guidance policy and the designation of one area as an UNESCO World Heritage Site, rendered the investments worthless. In February 2020, the arbitration panel decided in the GoM’s favor.
The Rawat v. Mauritius arbitration, linked to the BAI case outlined above, started in 2015. The claimant alleged that the GoM illegally appointed special administrators to take control over two insurance and banking companies as well as related companies in which the claimant held interests, and later sold or transferred assets to state-owned companies and third parties. In April 2018, the arbitral tribunal decided in favor of the GoM on jurisdictional grounds.
In 2017, the Supreme Court ruled on an unfair competition case lodged in 2005 by Emtel, a local telecommunications firm, against state-owned Mauritius Telecom and the former Telecommunications Authority. The court awarded over $16 million in damages to Emtel.
Another dispute involved Mauritian company Betamax against the State Trading Corporation (STC) for breach of contract. STC is a public body and trading arm of the GoM. In 2009, it entered into a contract with Betamax to transport petroleum products to Mauritius. The contract provided for arbitration under the rules of the Singapore International Arbitration Centre. In 2015, following a change of government, the cabinet terminated the contract alleging that it violated the 2006 Mauritian Public Procurement Act. Betamax initiated arbitration proceedings against STC. In 2017, the arbitrator decided in favor of Betamax and awarded damages for STC’s failure to perform its obligations under the contract. STC then petitioned the Supreme Court of Mauritius to set aside the verdict, arguing that the Singapore tribunal lacked jurisdiction. In 2019, the Supreme Court set aside the arbitral award on the grounds that the contract violated the Public Procurement Act, was illegal and unenforceable, and therefore the arbitral award was contrary to the public policy of Mauritius under the Mauritian International Arbitration Act 2008. In June 2019, Betamax appealed to the UK Privy Council, which in June 2021 decided in favor of Betamax and enforcement of the arbitration decision. The Privy Council ruled that the Supreme Court was not entitled to review the arbitration decision and that the contract did not breach public procurement laws.
In October 2017, the Association des Hoteliers et Restaurateurs of Mauritius (AHRIM) and the Sea Users Association (SUA) challenged the GoM’s issuance of a license to Growfish International to develop aquaculture farms. The groups feared the fish farms would negatively impact tourism and the marine environment. The Environment and Land Use Appeal Tribunal ruled in favor of AHRIM and SUA. The Ministry of Environment and Growfish appealed to the Supreme Court and proceedings were ongoing.
A Malaysian power company, CT Power, challenged the GoM’s decision to cancel a proposed energy project that it had been negotiating with the previous government. The Supreme Court ruled in favor of the Malaysian company, and the GoM appealed to the Judicial Committee of the Privy Council. In June 2019, the Privy Council decided in favor of the GoM.
Local courts recognized and enforced foreign arbitral awards issued against the government or a public body. 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.
There is no known or reported extrajudicial action taken against foreign investors in Mauritius.
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. The organization’s website has additional information: 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). As from July 2020, MARC was operating under the Mediation and Arbitration Center (Mauritius) Ltd. More information is available via the following link: https://www.marc.mu/en.
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.
According to the World Bank’s 2020 Doing Business report, Mauritius ranks 28th out of 190 countries in terms of resolving insolvency, with a rating of 12 over 16 in the World Bank’s strength of insolvency framework index.
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.
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.
4. Industrial Policies
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. In the 2018-2019 national budget, a number of incentives were implemented to attract investors to Mauritius. These 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; (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 500,000 USD 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), announced in the 2016-2017 national budget, is intended 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: http://www.edbmauritius.org/schemes/regulatory-sandbox-license/.
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 350,000 square meters in 2020. Trade volume increased to 517,000 metric tons in 2019 from 347,000 metric in 2013, and trade value to 29 billion rupees from 23 billion rupees during the same time period. That said, both trade value and volume in 2019 decreased from 2018, which was 542,000 metric tons worth 44 billion rupees.
As of 2021, there were eight third-party freeport developers, three private freeport developers, and 220 freeport operators, representing over 3,500 jobs. Top trading partners for import in 2019 were the United Kingdom, India, Taiwan, Malaysia, and China. Top trading partners for export in 2019 were Reunion (France), South Africa, Kenya, Seychelles, and United Arab Emirates. Top goods traded through the freeport included mineral products, live animals, foodstuffs and beverages, and 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 USD. Companies operating in the freeport are exempt from corporate tax. Foreign-owned firms operating in the freeport have the same investment incentives and opportunities as local entities.
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 GoM does not impose local employment requirements on foreign investors. A foreign national can apply for an Occupation Permit (OP), which is a combined work and residence permit, subject to certain conditions such as minimum investment, salary, and/or business turnover. The OP allows foreign nationals to work and reside in Mauritius under three specific categories, namely: (i) investor, (ii) professional, or (iii) self-employed. Also, foreign nationals above the age of 50 years may choose to retire in Mauritius under a Residence Permit (RP). An OP or an RP is issued for a maximum period of three years and the permit holder may submit a new application upon expiry of the permit. Dependents of an OP or RP holder may also apply for residence permits for a duration not exceeding that of the OP or RP holder.
The Data Protection Act (DPA) 2017 is the law that governs the protection of personal data in Mauritius. The Government of Mauritius established the Data Protection Office (http://dataprotection.govmu.org/English/Pages/default.aspx) 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 with regard to 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.
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.
5. Protection of Property Rights
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. According to the World Bank’s 2019 Doing Business Report, Mauritius ranks 35th out of 190 countries for the ease of registering property.
Intellectual Property Rights
Intellectual property rights (IPR) in Mauritius are protected by two pieces of legislation, namely the Patents, Industrial Designs and Trademarks Act of 2002 and the Copyrights Act of 2014.
The Mauritius Parliament passed the Industrial Property Bill in July 2019. The act consolidates all industrial property-related issues in one statute. The protection framework covers patents, utility models, patent cooperation treaty; layout-designs of integrated circuits; protection of new varieties of plants; industrial designs governed by the Hague Agreement; and trademarks, trade names, geographic indications, and the Madrid Protocol.
The act allows international filing of trademarks under the Madrid Protocol, international filing of industrial designs under the Hague Agreement, and for the filing of patent applications under the Patent Cooperation Treaty. The process of accession to these international conventions will be initiated by the GoM once the law takes effect.
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 Bern Conventions for the protection of industrial property and the Universal Copyright Convention. Trademark and patent laws comply with the WTO’s Trade Related Aspects of Industrial Property Rights (TRIPS) agreement. A trademark is initially registered for 10 years and may be renewed for successive periods of 10 years. A patent is granted for 20 years and cannot be renewed. While IP legislation in Mauritius is consistent with international norms, enforcement is relatively weak. According to a leading IP law firm, police will normally only take action against IP infringements in cases where the IP owner has an official representative in Mauritius because 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. 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. An application can also be filed 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. 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 2019, the Customs Department carried out seizures of a total of 261,267 goods valued at 2.3 million USD. The infringing party is responsible for paying for the storage and/or destruction of the counterfeit goods. Mauritius is not listed in the U.S. Trade Representative (USTR) Special 301 Report or the Notorious Market List.
Embassy Contact for IPR:
U.S. Embassy Port Louis, Mauritius
Tel: +230 202 4400; Fax: +230 208 9534
IPR Law Firms in Mauritius*
River Court, St Denis Street
Port Louis, Mauritius
Tel: +230 210 3838; Fax: + 230 210 3912
Email: email@example.com www.geroudis.com
Chairman, Juristconsult Chambers
Level 12 Nexteracom Tower II, Ebene Cyber City
Tel: +230 465 0020; Fax: +230 465 0021
Email: firstname.lastname@example.org www.juristconsult.com
CEO, Eversheds Sutherland
Suite 310, 3rd Floor Barkly Wharf, Le Caudan Waterfront
Port Louis, Mauritius
Tel: +230 5726 3941; fax: +230 211 0780
Email: email@example.com www.eversheds-sutherland.com
*Law firms listed for convenience and should NOT be taken to imply U.S. Government endorsement.
6. Financial Sector
Capital Markets and Portfolio Investment
The Mauritian government 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 December 2019, the shares of 58 companies (local, global business, and foreign companies) were listed on the Official Market, representing a market capitalization of 7.4 billion USD, a fall of 15.8% from the previous financial year. This fall is mainly attributed to the impact of the Covid 19 pandemic. 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. The DEM was launched in 2006 and the shares of 39 companies are currently listed on this market with a market capitalization of 1.1 billion USD as of June 2020, falling by 24.4 percent during the financial year 2019-2020. Foreign investors accounted for 26.4 percent of the trading volume on the exchange for the financial year 2019-2020, compared to 39.5 percent for the financial year 2018-2019. 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 2018, in line with its strategy to digitalize its investor services, SEM launched the mySEM mobile application.
In 2020, the slowdown in domestic economic activity resulting from the Covid-19 pandemic caused many listed companies to publish reduced earnings and defer dividend payments. After a strong decline between March and April 2020, the SEMDEX and SEM-10 continued a downward trend during the rest of the year. Stocks associated with tourism were the hardest hit.
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 the end September 2020, 19 banks were licensed to undertake banking business, of which eight were local banks, eight were foreign-owned subsidiaries, and three are branches of foreign banks. The license of one bank was revoked in August 2020. Another bank is currently under conservatorship. One bank conducts solely Islamic banking. Further details can be obtained at https://www.bom.mu/financial-stability/supervision/licensees/list-of-licensees.
The Mauritian banking sector historically accounts for about 7 percent of GDP (excluding bank-owned leasing businesses) and is the main component of financial services, which contribute 12 percent of GDP. The total assets of the sector represented around 393.8 percent of GDP at the end of September 2020, compared to 319.3 percent at the end of March 2020. 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 40 percent of the total domestic market. Maubank, the third-largest bank in the country, 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 January 2021 amounted to 43.5 billion USD).
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 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 to 11.2 million USD from 5.8 million USD. 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. The latest International Monetary Fund Article IV report highlights that banks have increased exposure to the region and that the Bank of Mauritius has strengthened cross-border supervision and cooperation with foreign regulators. The IMF report also recommends that additional steps be taken to strengthen financial stability, including lowering the high non-performing loans stock through a more stringent approach to writing-off legacy exposures, and by safeguarding the longer-term forex funding needs stemming from banks’ swift expansion abroad.
As part of its Covid-19 response, the BoM has made 132 USD 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 to 8 percent from 9 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 USD million, raising concerns about the central bank’s independence.
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 report being in jeopardy of doing so as of April 2020.
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. Mauritius is working to implement its action plan, including (i) demonstrating that the supervisors of its global business sector and Designated Non-Financial Businesses and Professions implement risk-based supervision; (ii) ensuring the access to accurate basic and beneficial ownership information by competent authorities in a timely manner; (iii) demonstrating that law enforcement agencies have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases; (iv) implementing a risk based approach for supervision of its non-profit sector to prevent abuse for terrorism financing purposes, and (v) demonstrating the adequate implementation of targeted financial sanctions through outreach and supervision.
In October 2020, the European Commission added Mauritius to its list of AML-CTF high-risk jurisdictions. As of April 2021, Mauritius was still on the EU and FATF lists.
In February 2018, the Fintech and Innovation-driven Financial Services (FIFS) Regulatory Committee held its first meeting at the Financial Services Commission, the regulator for the non-banking financial services, to assess the regulatory framework concerning FIFS regulations in Mauritius and to identify priority areas within the regulatory space of fintech activities. In May 2018, the Committee submitted recommendations for regulating the fintech sector to authorities. A National Regulatory Sandbox License (RSL) Committee was set up to assess all fintech applications requiring a sandbox license for business activities without an existing legal framework.
Effective March 2019, the Financial Services Commission allows businesses that provide custodial services for digital assets. According to the Bank of Mauritius 2019 Annual Report, the FIFS committee has initiated work on approaches to regulate Fintech tools such as artificial intelligence, big data, distributed ledger technologies, and biometrics.
In June 2020, the BoM announced that it was creating a central Know Your Client registry.
Foreign Exchange and Remittances
The government of Mauritius abolished foreign exchange controls in 1994. Consequently, no approval is required for converting, transferring, or repatriating profits, dividends, or capital gains earned by a foreign investor in Mauritius. Funds associated with any form of investment can be freely converted into any world currency.
The exchange rate is generally market-determined though the Bank of Mauritius, the central bank, occasionally intervenes. Between January 2019 and December 2019, the Mauritian rupee depreciated against the U.S. dollar by 6.4 percent, the pound by 8.3 percent, and the euro by 3.6 percent. Due to the Covid-19 crisis, the Bank of Mauritius intervened regularly on the domestic foreign exchange market in early 2020.
There are no time or quantity limits on remittance of capital, profits, dividends, and capital gains earned by a foreign investor in Mauritius. Mauritius has a well-developed and modern banking system. There is no legal parallel market in Mauritius for investment remittances. The Embassy is unaware of any proposed changes by the government to its investment remittance policies.
Sovereign Wealth Funds
The government of Mauritius does not have a Sovereign Wealth Fund.
7. State-Owned Enterprises
The government’s stated policy is to act as a facilitator to business, leaving production to the private sector. The government, however, still controls key services directly or through parastatal companies in the power and water, television broadcasting, and postal service sectors.
The government also holds controlling shares in the State Bank of Mauritius, Air Mauritius (the national airline), and Mauritius Telecom. These state-controlled companies have Boards of Directors on which seats are allocated to senior government officials. The government nominates the chairperson and CEO of each of these companies. In April 2020, Air Mauritius requested voluntary administration, similar to Chapter 11 bankruptcy in the United States, because it could not comply with financial obligations.
The government also invests in a wide variety of Mauritian businesses through its investment arm, the State Investment Corporation. The government is also the owner of Maubank and the National Insurance Company.
Two parastatal entities are involved in the importation of agricultural products: the Agricultural Marketing Board (AMB) and the State Trading Corporation (STC). The AMB’s role is to ensure that the supply of certain basic food products is constant, and their prices remain affordable. The STC is the only authorized importer of petroleum products, liquefied petroleum gas, and flour. SOEs purchase from or supply goods and services to private sector and foreign firms through tenders.
Audited accounts of SOEs are published in their annual reports. Mauritius is part of the OECD network on corporate governance of state-owned enterprises in southern Africa.
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 USD 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. His office never identified a list of assets, but in parliament the prime minister has mentioned Maubank, the National Insurance Company, and Casinos of Mauritius as possible divestments.
8. Responsible Business Conduct
The National Committee for Corporate Governance (NCCG) was established under Section 63 of the Financial Reporting Act (2004) and is the coordinating body responsible for all matters pertaining to corporate governance in Mauritius. The purpose of the Committee is to: (i) establish principles and practices of corporate governance; (ii) promote the highest standards of corporate governance; (iii) promote public awareness about corporate governance principles and practices; and (iv) act as the national coordinating body responsible for all matters pertaining to corporate governance. The latest Code of Corporate Governance for Mauritius (2016) was launched on February 13, 2017 and can be accessed at http://www.miod.mu/info-centre/new-code-of-corporate-governance-for-mauritius-2016. The Financial Reporting Council (FRC), also set up under the Financial Reporting Act (2004), aims to advocate for the provision of high-quality reporting of financial and non-financial information by public interest entities and to improve the quality of accountancy and audit service.
The Ministry of Financial Services and Good Governance was established following the December 2014 elections. Its mandate is to provide guidance and support for enforcement of good governance and the eradication of corruption. The Mauritius Institute of Directors (MIoD) is an independent, private sector-led organization that also promotes high standards and best practices of corporate governance, with additional information available at http://www.miod.mu.
In 2017, the government set up a National Corporate Social Responsibility (CSR) Foundation, which operated under the Ministry of Social Integration and Economic Empowerment. In 2019, this foundation became the National Social Inclusion Foundation (NSIF). The NSIF is managed by a council consisting of members from the private and public sectors, civil society, and academia. Under the 2016 Finance Act, every company registered in Mauritius must set up a CSR fund and contribute each year the equivalent of 2 percent of its taxable income from of the previous year. In 2017 and 2018, companies were required to remit at least 50 percent of their CSR funds to tax authorities for the National CSR Foundation. The required contribution increased in 2019 to 75 percent. The NSIF is supposed to channel the money to NGO projects in priority areas identified by the government. These priority areas are poverty alleviation, educational support, social housing, family protection, people with severe disabilities, and victims of substance abuse. Further details can be found on the NSIF website: https://www.nsif.mu.
The prevalence of corruption in Mauritius is low by regional standards, but graft and nepotism nevertheless remain concerns and are increasingly a source of public frustration. Several high-profile cases involving corruption have reinforced the perception that corruption exists at the highest political levels, despite the fact that Mauritian law provides for criminal penalties for corruption by officials. According to Transparency Mauritius, the absence of a law regulating the financing of political parties fuels corruption. A former prime minister was arrested in 2015 on allegations of money laundering, though courts have since dismissed all charges. The state prosecutors appealed the last dismissal in late 2019 and the appeal is pending. A minister in the previous government stepped down in 2016 after allegations of bribery. In March 2017, allegations surfaced concerning possible political interference in the Financial Services Commission’s issuance of an investment banking license to Angolan billionaire Alvaro Sobrinho, who is being investigated for alleged corruption in Portugal. In March 2018, the president of Mauritius resigned after press reported that she bought apparel, jewelry, and a laptop computer with a credit card provided by an NGO financed by the same Angolan businessman. In June 2020, the prime minister dismissed his deputy prime minister following allegations of bribery and corruption in a public energy contract. In February 2021, the minister of commerce stepped down amid allegations of corruption and abuse of power.
Investors should know that while the constitution and law require arrest warrants to be based on sufficient evidence and issued by a magistrate, police may detain an individual for up to 21 days under a “provisional charge” based on a reasonable suspicion, with the concurrence of a magistrate. Two French businessmen claimed that in February 2015 authorities held them against their will. A U.S. investor has been unable to leave Mauritius since February 1, 2020, without charges filed against him.
In 2002, the government adopted the Prevention of Corruption Act, which led to the establishment of an Independent Commission Against Corruption (ICAC). ICAC has the power to investigate corruption and money laundering offenses and can also seize the proceeds of corruption and money laundering. The Director of ICAC is nominated by the prime minister. The Good Governance and Integrity Reporting Act of 2015 was announced as a measure to recover “unexplained wealth” and came into force in early 2016. Critics of the act dislike its presumption of guilt, requiring the accused to demonstrate a lawful source of questionable assets, as well as the application of the law retroactively for seven years. The 2018 Declaration of Assets Act (DoA) entered into force in June 2019 and defines which public officials are required to declare assets and liabilities to the ICAC. These public officials include members of the National Assembly, mayors, chairpersons and chief executive officers of state-owned enterprises and statutory bodies, among others.
Mauritius is the 52nd least-corrupt nation out of 175 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International, up from 51st in 2018 and down from 54th in 2017. However, Mauritius retained its first rank in overall governance in Africa for the 12th consecutive year, according to the 2018 Ibrahim Index of African Governance.
U.S. investors, in conversations with embassy personnel, have not identified corruption as an obstacle to investment in the country. They have, however, encountered attempts for bribery.
Although the country lacks laws on political party financing, Mauritius has legislation to combat corruption by public officials. These include laws dealing with declaration of assets, asset recovery, prevention of corruption, anti-money laundering, and criminal offences related to abuse of office by public officials.
However, legal loopholes exist and enforcement is weak. Allegations of corruption and misallocation of government contracts by public entities occurred in 2020, namely the use of emergency procurement procedures during the pandemic to allegedly enrich friends and family of those in power.
According to Transparency Mauritius, more companies have introduced control and risk management protocols, as well as adopting code of ethics and good business conduct, even if these do no target government officials. The Prevention of Corruption Act targets mainly the public sector, but there is no whistleblower protection law.
Mauritius has ratified the UNCAC, but it has not yet adopted all the recommendations, for instance, the criminalization of corruption in the private sector. According to Transparency Mauritius, NGOs involved in fighting corruption are not given enough protection and funding.
4th Floor, Fon Sing Building, 12 Edith Cavell Street, Port Louis, Mauritius
+ 230 213 0796 firstname.lastname@example.org
10. Political and Security Environment
Mauritius has a long tradition of political and social stability. Civil unrest and political violence are uncommon. Free and fair national elections are held every five years with the last general elections held in November 2019. Those most recent elections took place without incident. The current prime minister, Pravind Jugnauth previously served as finance minister, and was appointed prime minister 2017 after his father resigned (in accordance with the constitution). Jugnauth won reelection in 2019. In August 2020 and February 2021, civilians engaged in mass protests following allegations of corruption and mismanagement by the government. The protests were orderly and without incident.
Crime rates are low, but petty and violent crime can occur. Visitors should keep track of their belongings at all times due to the potential for pickpocketing and purse-snatching, especially in crowded and tourist areas. Visitors should also avoid walking alone, particularly on isolated beaches and at night, and should avoid demonstrations.
11. Labor Policies and Practices
According to the GoM, total employment stood at 506,300 in September 2020, a decrease from 551,300 in 2019. The number of unemployed increased to 62,200 in September 2020 from 57,300 in July 2020. The unemployment rate was estimated at 10.9 percent in September 2020 compared to 10.3 percent in July 2020.
The labor market remains restricted by rising unemployment among graduates and low-skilled workers, and a high number of unemployed women. It is further characterized by a persistent mismatch between qualifications of the unemployed and the skills required in an increasingly services-oriented economy. Government labor market programs aimed at building human capital have been extended, with policies to develop skills of the unemployed focusing on apprenticeships and placements. In November 2016, the government introduced the National Skills Development Program (NSDP), a fully-funded technical training program for youth, which was still running as of April 2020. The NSDP is managed by the Human Resource Development Council (HRDC), which operates under the Ministry of Education and is responsible for promoting the development of the labor force in Mauritius. The HRDC, with technical and financial support from the French development agency, is also devising a National Skills Development Strategy (NSDS) for 2020-2024. The aim of the NSDS is to improve the effectiveness and efficiency of skills development programs. In 2018, the government introduced the SME Employment Scheme, which allows SMEs to employ recent graduates and the government pays the graduates a monthly stipend for one year. In 2019, the government opened the scheme to diploma holders as well.
In 2017, the National Assembly passed the National Employment Act. The object of the act was to repeal the Employment and Training Act and introduce a modern legislative framework. The act provides the labor market with information on supply and demand of skills, job seekers, and training institutions; promotes placement and training of job seekers, including young persons and persons with disabilities; and promotes labor migration and home-based work.
In November 2017, the Equal Opportunities Act was amended to protect prospective employees with criminal records from discrimination when being considered for recruitment or promotion.
In 2018, the government introduced a minimum monthly wage of 9,000 Mauritian rupees (approximately 255 USD) for all workers, affecting over 100,000 low-paid workers. In November 2019, the cabinet, following a recommendation from the National Wage Consultative Council, increased the minimum wage again to 10,200 rupees (284 USD), effective January 2020. Workers’ rights are protected under the 2019 Workers’ Rights Act, taking effect in January 2020. The legislation provides for a portable retirement gratuity fund, fair compensation in case of termination, harmonization of working conditions in different sectors, the flexibility to request the right to work from home either on a full- or part-time basis, and equal remuneration for equal work, among others. The act also adds to the Equal Opportunities Act through several measures against discrimination in employment and occupation.
Trade unions are independent of government and employers. Mauritius has an active trade union movement, representing about 25 percent of the workforce, and labor-management relations are generally positive. The last major strike affecting the economy took place in 1979. The government generally seeks to avoid strikes through a system that promotes settlement through negotiation or arbitration by the Employment Relations Tribunal and the National Remuneration Board. Mauritius participates actively in the annual International Labor Organization (ILO) conference in Geneva, Switzerland, and adheres to ILO core conventions protecting workers’ rights.
12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance and Development Finance Programs
In December 1997, Mauritius signed an investment incentive agreement with OPIC. Mauritius, classified in July 2020 a high-income country, is not a priority for DFC programs, but may be considered for programs that address key agency priorities. Mauritius is also a member of the World Bank’s Multilateral Investment Guarantee Agency. Countries with significant government-financed investment in Mauritius include India, China, France, Saudi Arabia, and Japan.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source*
USG or international statistical source
USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Host Country Gross Domestic Product (GDP) ($M USD)