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 2020, Mauritius’ GDP was $11 billion and its gross national income per capita amounted to $10,230. In July 2020, the World Bank classified Mauritius as a high-income country based on 2019 data, but Mauritius reverted to upper-middle income status in 2021 due to the effects of the COVID-19 pandemic.
The pandemic severely damaged the economy. Tourism, which contributed around 20 percent to the economy pre-COVID, did not return as expected following the reopening of borders in October 2021. There was a moderate rebound in exports of goods, but exports of services declined further due to the difficult situation in the tourism sector. The GoM estimated that GDP growth would increase 4.8 percent in 2021, with contractions in tourism (18.8 percent) and sugar (9.6 percent), according to Statistics Mauritius. The IMF forecasted that the economy would grow 6.7 percent growth in 2022. Unemployment was estimated at 9.2 percent at the end of 2020, while inflation for 2021 was 4.0 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 service-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 November 2021 at the Conference of Parties 26 (COP 26), the GoM pledged to reduce its greenhouse gas emissions to 40 percent of the business-as-usual scenario 2030 figures. To achieve this target, the government plans to undertake major reforms in its energy, transport, waste, refrigeration and air-conditioning, agriculture, and conservation sectors. The government aims to produce 60 percent of the country’s energy from green sources by 2030, to phase out the total use of coal before 2030, and to increase energy efficiency by 10 percent based on 2019 figures. As part of the national strategy to modernize the public transport system, the light rail network that launched in 2019 is expected to be extended. The government was also working to diversify 70 percent of waste from the landfill by 2030 through the implementation of composting plants, sorting units, biogas plants and waste-to-energy plants.
In 2020 and 2021, however, officials focused on supporting sectors whose revenue disappeared due to the pandemic. In May 2020, the Bank of Mauritius (BoM) set up the Mauritius Investment Corporation (MIC) to mitigate the economic downturn due to the pandemic. The BoM invested $2 billion of foreign exchange reserves in the MIC which were largely directed towards the pharmaceutical and blue economy sectors, in addition to assisting companies that suffered during the pandemic. The BoM also intervened regularly on the domestic foreign exchange market to supply foreign currency.
Government policy in Mauritius is pro-trade and investment. The GoM has signed Double Taxation Avoidance Agreements with 46 countries and maintains a well-regarded legal and regulatory framework. Mauritius has been eager to attract 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, which went into effect in April 2021. The GoM 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. For instance, a commercial dispute between a U.S. investor and a parastatal partner that turned into a criminal investigation 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. Mauritius outperforms all other African countries on the Human Development Index where, in 2020, it ranked 66 out of 189 countries. The 2022 Index of Economic Freedom, published by the Heritage Foundation, ranked Mauritius first among 47 countries in the Sub-Saharan Africa region and 30th globally, compared to being 13th in 2021. This decline in the ranking is due to a drop in the country’s fiscal health score. The index also highlighted that while property rights and judicial effectiveness are strong, government integrity is relatively weak.
The Economic Development Board (EDB) is the single gateway government agency responsible for promoting investment in Mauritius and helping guide investors through the country’s legal and regulatory requirements. In terms of investor retention policy, the EDB provides aftercare services that consider future business environment requirements for survival and/or expansion. The EDB has a customer service unit that receives investor suggestions and complaints, and it organizes workshops and roundtable sessions to inform investors about changes in investment policies. In 2021, the EDB also set up a Business Support Facility that provides facilitation and advisory services to all businesses in Mauritius: https://business-support-portal.edbmauritius.org/business-support-facility/.
Limits on Foreign Control and Right to Private Ownership and Establishment
A non-citizen can hold, purchase, or acquire real property under the Non-Citizens (Property Restriction) Act (NCPRA), subject to government approval. The NCPRA can be accessed on this link: https://dha.govmu.org/Pages/Services/PRA.aspx. A non-citizen is eligible for a residence permit upon purchasing residential property under the government-regulated Property Development Scheme (PDS), Integrated Resort Scheme (IRS), and Real Estate Scheme (RES) as long as the investment exceeds $375,000 or its equivalent in any freely convertible foreign currency.
No government approval is required in certain situations provided under the NCPRA, namely: (i) holding of immoveable property for commercial purposes under a lease agreement not exceeding 20 years; (ii) holding of shares in companies that do not own immoveable property; (iii) holding of immoveable property by inheritance or effect of marriage to a citizen under the “régime legal de communauté”; (iv) holding of shares in companies listed on the Stock Exchange of Mauritius; and (v) through a unit trust scheme or any collective investment vehicle as defined in the Securities Act.
Regarding business activities, the GoM generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper and magazine publishing, and certain operations in the tourism sector.
In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Control by foreign nationals in broadcasting was likewise capped at 49.9 percent. The IBA Act can be accessed via http://www.iba.mu/legal.htm.
In the 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 assists with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2021, the U.S. Embassy in Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms.
The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. The EDB then advises potential investors on specific permits or licenses required, depending on the nature of the business. Foreign investors may apply through the EDB for necessary permits; alternately, investors may apply directly to the relevant authorities. In the event an investment fails the review process, the prospective investor may appeal the decision within the EDB or with the relevant government ministry.
In response to the COVID-19 crisis, the GoM relaxed investment terms and conditions for foreign investors in 2020. For instance, the minimum investment for obtaining an occupation permit was halved to $50,000. The GoM also removed the minimum turnover and minimum amount invested for the Innovator Occupation Permit. Professionals with an occupation permit and foreign retirees with a residence permit were able to invest in other ventures without any shareholding restrictions. The permanent residence permit validity was doubled to 20 years. Non-citizens who had a residence permit under the various real estate schemes were no longer required to hold an occupation or work permit to invest and work in Mauritius. Additionally, the GoM introduced a 10-year Family Occupation Permit, which allows foreign families to invest and reside in Mauritius for a period of 10 years in exchange for a minimum contribution of $250,000 to the COVID-19 Projects Development Fund. More information is available at https://residency.mu/.
In 2020, the Non-Citizens (Employment Restriction) Act was amended to enable the following categories of individuals to engage in any occupation without 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. In 2021, the GoM also introduced the premium investor certificate, which allows companies investing at least $11 million, as well as companies involved in the manufacture of pharmaceuticals and medical devices, to benefit from incentives.
Other Investment Policy Reviews
In 2018, the United Nations Conference on Trade and Development (UNCTAD) published its 2017 Report on the Implementation of the Investment Policy Review (IPR) for Mauritius.
In November 2021, Mauritius concluded its fifth trade policy review with the World Trade Organization. The review concluded that Mauritius’ openness to trade and its stable and robust democratic system have contributed to its economic success in recent years. The review also highlighted that, after two decades of liberalizing reforms, Mauritius has transformed into an almost duty-free economy, with the notable exception of sugar, on which Most Favored Nation tariff rates reach 100 percent. The trade policy review is available at https://www.wto.org/english/tratop_e/tpr_e/s417_e.pdf.
After the GoM put in place new measures to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime, in October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning AML/CFT. In January 2022, the European Union Commission likewise removed Mauritius from its list of high-risk third countries.
The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures.
The incorporation of companies and registration of business activities falls under the provisions of the Companies Act of 2001 and the Business Registration Act of 2002. All businesses must register with the Corporate and Business Registration Department (CBRD); the registration can be completed online at https://companies.govmu.org/Pages/default.aspx. In 2020, the Business Registration Act was amended so that the CBRD became the central repository of business licenses and information. According to the amendment, all government agencies must electronically forward a copy of any permit, license, authorization, or clearance to the registrar for publication in the Companies and Businesses Registration Integrated System (“CBRIS”). As a general rule, a company incorporated in Mauritius can be 100 percent foreign owned with no minimum capital.
Upon completion of the registration process, the CBRD issues a certificate of incorporation. The company can subsequently apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign. To this end, a Business Support Facility was established at the EDB in 2021. For more information, see https://business-support-portal.edbmauritius.org/.
In partnership with the Corporate and Business Registration Department, 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. Through NELS, the submission of business licensing (including the Building and Land Use Permit, Environmental Impact Assessment, Occupation Certificate, Land Conversion Certificate, etc.) can now be done electronically.
In 2020, the Economic Development Board Act was amended to allow companies to log any obstacles relating to obtaining licenses, permits, authorizations, or other clearances; to enquire about any issue and make recommendations to government agencies; and to publish any actions taken to resolve the reported obstacles.
Mauritius also implemented the e-Registry System, where a national register of real estate properties and statistics on land dispute resolutions are now publicly available. An independent mechanism for filing of complaints was also implemented. The e-Registry System features an electronic dashboard for registry searches, submission of documents, online payment of registration fees, and electronic copies of registered documents.
The GoM imposes no restrictions on capital outflows. Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses. As part of its Africa Strategy, the government established the Mauritius Africa Fund, a public company with a budget of $13.8 million to support Mauritian investment in Africa. Through the Fund, the government participates as an equity partner for up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa. The government has signed agreements with Senegal, Madagascar, and Ghana to establish and manage Special Economic Zones (SEZ) in these countries. The GoM 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.
Additionally, 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. This office also acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa.
According to the most recent figures available from the Bank of Mauritius, in 2020, gross direct investment flows abroad (excluding the offshore sector) amounted to $68 million. The top three sectors for outward investment were accommodation and food service activities (32 percent), manufacturing (12 percent), and real estate activities (9 percent). Investment abroad was focused mainly on developing countries, particularly in Africa, which received $31 million. Seychelles was the top recipient country, receiving $22 million.
2. Bilateral Investment 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 by moving up to high-income country status as defined by the World Bank.
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. Negotiations to finalize a Comprehensive Economic Partnership Agreement with the EU are ongoing.
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. The Comprehensive Economic Cooperation Partnership Agreement (CECPA) between India and Mauritius took effect in April 2021.
The economic partnership agreement between the United Kingdom and Eastern and Southern African countries, known as the UK-ESA EPA, also entered into force in January 2021, following the end of the Brexit transitional period. 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 44 countries. The following 29 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. Updated information on IPPAs can be accessed at https://www.edbmauritius.org/info-centre/ippa.
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 45 Double Taxation Avoidance Agreements (DTAAs) and is party to a series of treaties under negotiation. The treaties currently in force are: Australia (Partial), Barbados, Belgium, Botswana, Cape Verde, Congo, Croatia, Cyprus, Egypt, Estonia, 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 Zimbabwe. Six treaties await ratification: Gabon, Comoros, Kenya, Morocco, Nigeria, and Russia. Five treaties await signature: Cote d’Ivoire, Gibraltar, Malawi, the Gambia, and Angola. Another 20 treaties are being negotiated: Algeria, Burkina Faso, Canada, Czech Republic, Greece, Hong Kong, Montenegro, North Sudan, Portugal, Iran, Saudi Arabia, Senegal, Spain, St. Kitts & Nevis, Tanzania, Vietnam, Yemen, Zambia, Mali, and Turkey. Updated information on DTAAs can be accessed at https://www.mra.mu/index.php/taxes-duties/international-taxation/double-taxation-agreements.
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. Mauritius is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and is party to the deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.
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. At the time of writing of this report, the government was drafting a bill that would require regulatory bodies to submit an impact of upcoming regulations on the business environment.
Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. To combat corruption, money laundering and terrorist financing, the government also enacted the Prevention of Corruption Act, the Prevention of Terrorism Act, and the Financial Intelligence and Anti-Money Laundering Act. The National Code on Corporate Governance encourages companies to present a balanced assessment of the organization’s financial, environmental, social, and governance performance and outlook in its annual report and on its website. While Mauritius does not have a freedom of information act, members of the public may request information by contacting the permanent secretary of the relevant ministry.
Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, are publicly available and provide a substantial picture of Mauritius’ planned expenditures and revenue streams.
International Regulatory Considerations
Mauritius is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). The GoM implements its commitments to these regional economic institutions with domestic legal and regulatory adjustments, as appropriate). Mauritius is a signatory to the Tripartite Free Trade Area and the African Continental Free Trade Area (AfCFTA). AfCFTA took effect in January 2021. 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, and was among the first African countries to do so. Mauritius was also the fourth country to submit its instrument of acceptance for the Trade Facilitation Agreement (TFA). Mauritius notified its category B & C commitments and its corresponding indicative dates of implementation in 2015. It also indicated its requirements to implement category C measures. With the coming into force of the WTO Trade Facilitation Agreement (TFA) in February 2017, Mauritius is implementing all its category A commitments.
Of TFA’s 36 measures, Mauritius has classified 27 as category A, five as B, and four as C. Discussions with donors to obtain technical assistance to finance trade facilitation projects listed under category C are ongoing. Mauritius has already secured assistance from the World Bank and the World Customs Organization.
To coordinate efforts to implement the TFA, in 2015 Mauritius set up a National Committee on Trade Facilitation co-chaired by representatives from government and the private sector. Members include MRA Customs, the Ministry of Agro-Industry and Food Security, the Ministry of Finance and Economic Development, the Mauritius Chamber of Commerce and Industry and the Economic Developments Board, among others. The committee meets twice a year and discussion topics include identification of the TFA, policy recommendations of trade facilitation, dissemination of information on trade facilitation, and addressing the bottlenecks to trade due to the COVID-19 pandemic.
Mauritius is also part of the Cotonou Agreement, a 2000 treaty between the EU and the African, Caribbean and Pacific Group of States. On December 3, 2020, the EU and the Organization of African, Caribbean and Pacific States (OACPS) reached a new agreement that succeeded the Cotonou Partnership Agreement and is expected to be signed in June 2022. The agreement 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 based on a unique mixture of traditions. Mauritius draws legal principles from both French civil law and British common law traditions; its procedures are largely derived from the English system, while its substance is based in the Napoleonic Code of 1804. Commercial and contractual law is also based on the civil code. However, some specialized areas of law are comparable to other jurisdictions. For example, its company law is practically identical to that of New Zealand. Mauritian courts often resolve legal disputes by drawing on current legislation, the local legal tradition, and by means of a comparative approach utilizing various legal systems. The highest court of appeal is the judicial committee of the Privy Council of England. Mauritius is a member of the International Court of Justice. Mauritius established a Commercial Court in 2009 to expedite the settlement of commercial disputes.
In 2020, the Courts Act was amended to provide for the creation of a Financial Crimes Division within the Supreme Court and the Intermediate Court. An amendment to the Courts Act provided for the establishment of a Land Division court at the Supreme Court to expedite land dispute resolutions.
The GoM and judiciary are supportive of arbitration. Mauritius has two arbitration centers and is a party to the New York Convention 1958 and the United Nations Convention on Transparency in Treaty-based Investor State Arbitration.
Contracts are legally enforceable and binding. Ownership of property is enforced with the registration of the title deed with the Registrar-General and payment of the registration duty. Mauritian courts have jurisdiction to hear intellectual property claims, both civil and criminal. The judiciary is independent, and the domestic legal system is generally non-discriminatory and transparent.
U.S. Embassy Port Louis is not aware of any recent cases of government or other interference in the court system affecting foreign investors.
Laws and Regulations on Foreign Direct Investment
The Economic Development Board Act of 2017 governs investment in Mauritius, while the Companies Act of 2001 contains the regulations governing incorporation of businesses. The Corporate and Business Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the Companies Act of 2001, the Business Registration Act of 2002, the Insolvency Act of 2009, the Limited Partnerships Act of 2011, and the Foundations Act of 2012. The Economic Development Board website provides information on investment incentives, procedures to establish a company in Mauritius, and occupation/work permits: https://www.edbmauritius.org/.
Competition and Antitrust Laws
The Competition Commission of Mauritius (CCM) is an independent statutory body established in 2009 to enforce Competition Act 2007. It is mandated to safeguard competition by preventing and remedying anticompetitive business practices in Mauritius. Anticompetitive business practices, also called restrictive business practices, may be in the form of cartels, abuse of monopoly situations, and mergers that lessen competition.
The institutional design of the Competition Commission houses both an adjudicative and an investigative organ under one body. While the Executive Director has power to investigate restrictive business practices (the Investigative Arm), the commissioners determine the cases (the Adjudicative Arm) on the basis of reports from the Executive Director. Any party dissatisfied with an order or direction of the commission may appeal to the Supreme Court within 21 days.
Since it began operations, the Competition Commission has undertaken 62 investigations, of which 50 have been completed and 12 are ongoing as of March 2022. To date, the commission has also conducted 312 enquiries, which are preliminary research exercises prior to proceeding to investigations. The Competition Commission conducts market studies and five of the eight market studies have been completed. It has also issued six papers to the government on policy matters affecting competition.
Regionally, the Competition Commission has assessed 166 mergers across the Common Market for Southern and Eastern Africa Free Trade Area (COMESA) member states that affected Mauritius. It has also assisted the African Competition Forum (ACF) on two cross-country market studies.
The Competition Commission has also 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 2022.
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 GoM 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 by way of arbitration administered by the Permanent Court of Arbitration. The court concluded that it lacked jurisdiction over the dispute and ruled in favor of the GoM. The former chairman had appealed this decision to the French-speaking Court of First Instance in Brussels, which ruled in favor of the GoM in June 2021. In May 2019, the former chairman filed two cases in the Mauritian Supreme Court to challenge the appointment of the special administrator for the Bramer Banking Corporation and BAI Co Ltd, the holding company of the BAI group. Both cases are ongoing.
ICSID Convention and New York Convention
Mauritius is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), and a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act. Mauritius is also a member of the Multilateral Investment Guarantee Agency of the World Bank. In 2014, it became a signatory of the United Nations Convention on Transparency in Treaty-based Investor State Arbitration 2014, also known as the Mauritius Convention as it was first signed in Mauritius. In August 2019, it signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention.
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 2004 is the domestic legislation providing for the enforcement of awards under the 1958 New York Convention. Because Mauritius is a party to the New York Convention without any reciprocity reservation, all foreign arbitral awards are enforceable in Mauritius. The 1969 Investment Disputes (Enforcement of Awards) Act is the domestic legislation providing for enforcement of disputes under the Washington Convention.
Investor-State Dispute Settlement
The GoM is party to several investment agreements recognizing international arbitration of investment disputes. Most Investment Promotion and Protection Agreements (IPPA) include an arbitration clause referring to the ICSID dispute settlement mechanism.
While Mauritius has a Trade and Investment Framework Agreement with the United States, it does not have a specific bilateral investment treaty or free trade agreement with the United States.
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 2022.
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. The claimant appealed this decision to the French-speaking Court of First Instance in Brussels, which ruled in favor of the GoM in June 2021.
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. Following this ruling, the government paid the sum of $115 million to Betamax for damages with interest and costs.
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, which ruled in favor of AHRIM in May 2019.
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 available at http://miac.mu/.
Additionally, the Mauritius Chamber of Commerce and Industry (MCCI), which pioneered institutional arbitration in Mauritius, set up the MCCI Permanent Court of Arbitration in 1996. In 2012, it was rebranded as the MCCI Arbitration and Mediation Center (MARC). From July 2020, MARC has been operating under the Mediation and Arbitration Center (Mauritius) Ltd. More information is available via the following link: https://www.marc.mu/en.
In 2018, the arbitral institution Delos listed Mauritius as the only safe seat of arbitration in the African Union in a list of 40 safe seats worldwide.
Bankruptcy is not criminalized in Mauritius. The Insolvency Act of 2009 amended and consolidated the law relating to insolvency of individuals and companies and the distribution of assets in the case of insolvency and related matters. Most notably, the Act introduced administration procedures, providing creditors the option of a more orderly reorganization or restructuring of a business than in liquidation. A bankrupt individual is automatically discharged from bankruptcy three years after adjudication but may apply to be discharged earlier. The Act draws on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997.
There were no special procedures that foreign creditors must comply with when submitting claims in insolvency proceedings. The law provides that foreign creditors have the same rights regarding the commencement of, and participation in, an insolvency proceeding as Mauritian creditors. The Second Schedule to the Insolvency Act applies to foreign creditors with respect to the procedures for proving their debts.
The creditor must send to the liquidator of the company an affidavit, sworn by the creditor or an authorized person, that verifies the debt and contains a statement of account showing the particulars of the debt. The affidavit must also state whether the creditor is a secured creditor. Section 132 of the Act outlines the conditions under which a liquidator may be appointed for a foreign company and related procedures.
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. A number of incentives have been 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 or lower depending on business activity; (ii) 100 percent foreign ownership permitted; (iii) no minimum foreign capital required; (iv) no tax on dividends or capital gains; (v) free repatriation of profits, dividends, and capital; (vi) accelerated depreciation on acquisition of plant, machinery, and equipment; (vii) exemption from customs duty on imported equipment; and (viii) access to an extensive network of double taxation avoidance treaties.
Additionally, the government has established a Property Development Scheme (PDS) to attract high net worth non-citizens who want to acquire residences in Mauritius. Buyers of a residential unit valued over $375,000 in certain projects are eligible to apply for a residence permit in Mauritius. The residential unit can be leased or rented out by the owner.
The Regulatory Sandbox License (RSL) was implemented to promote innovation by eliminating barriers to investment in cutting-edge technology. An RSL gives an investor fast-track authorization to conduct business activity in a sector even if there is not yet a legal or regulatory framework in place for the sector. Further details on the RSL can be accessed via the following link: https://www.edbmauritius.org/schemes.
The government offers tax incentives to companies that make clean energy investments through provisions in the 1995 Income Tax Act, the Customs Act, and the Value Added Tax Act. The tax incentives for a company include (i) double deduction of the expenditure of a fast charger for an electric car; (ii) an annual allowance of 100 percent on the capital expenditure for the acquisition of a solar energy unit; (iii) an annual allowance of 50 percent each year for a maximum two years on the capital expenditure for the acquisition of green technology equipment; (iv) tax exemption on interest earned by a company that invests in renewable energy projects through debentures and bonds; (v) eight-year tax holiday for a company that used deep ocean water for providing air conditioning services; (vi) customs duty and value-added tax exemption on any purchase of photovoltaic systems and chargers for electric vehicles.
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 400,000 square meters in 2021. Due to the pandemic, trade volume decreased to 258,972 metric tons in 2021 from 268,930 metric in 2020, and trade value increased to $816 million from $607 million during the same period.
As of 2022, there were nine third-party freeport developers, three private freeport developers, and more than 200 freeport operators, representing over 3,500 jobs. Top trading partners for import in 2021 were Taiwan, China, India, Singapore and South Africa. Top trading partners for export in 2021 were South Africa, Madagascar, Reunion, United States and Taiwan. Top goods traded through the freeport included live animals, foodstuffs and beverages, plastic, and metal products.
The government’s objective is to promote the country as a regional warehousing, distribution, marketing, and logistics center for eastern and southern Africa and the Indian Ocean rim. Through its membership in COMESA, SADC, and the IOC, Mauritius offers preferential access to a market of over 600 million consumers, representing an import potential of $100 billion. Companies operating in the freeport are exempt from corporate tax. 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 Data Protection Act (DPA) of 2017 governs the protection of personal data in Mauritius. The GoM established the Data Protection Office in 2009. The Data Protection Commissioner is responsible for upholding the rights of individuals set forth in the DPA and for enforcing the obligations imposed on data controllers and processors. In 2016, Mauritius ratified the Council of Europe’s Convention for Protection of Individuals regarding Automatic Processing of Personal Data (Convention 108). Mauritius is the second non-European country and the first African country to sign the convention. The agreement gives individuals the right to protection of their personal data. In September 2020, Mauritius signed the Amending Protocol to the Convention for the Protection of Individuals regarding the Processing of Personal Data and, at the same time, deposited the instrument of ratification, becoming the sixth state to ratify the modernized Convention 108.
Mauritian data protection law tracks the European Union’s Regulation on the Protection of Natural Persons with regards to the Processing of Personal Data and on the Free Movement of such Data, commonly known as the General Data Protection Regulation. Mauritius’ DPA applies only when processing of personal data is concerned. Failure to comply with Section 28 of the DPA, which establishes the lawful purposes for which personal data may be processed, can result in a fine and up to five years imprisonment. Section 29 sets requirements for processing special categories of data, such as ethnic origin, political adherence, and mental health condition.
There are no enforcement procedures for investment performance requirements.
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.
Intellectual Property Rights
Intellectual property rights (IPR) in Mauritius are protected by three pieces of legislation, namely the Industrial Property Act of 2019, the Copyrights Act of 2014, and the Protection against Unfair Practices (Industrial Property Rights) Act of 2022.
The 2019 Industrial Property Act and the accompanying regulations entered into force on January 31, 2022. This act consolidates all industrial property-related issues in one statute. The protection framework covers patents; trademarks; industrial designs; utility models; layout-designs of integrated circuits; plant varieties; trade names, and geographic indications.
The Industrial Property Act also allows the international filing of trademarks under the Madrid Protocol, the international filing of industrial designs under the Hague Agreement, and the filing of patent applications under the Patent Cooperation Treaty. However, Mauritius has not yet acceded to these international instruments. 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. Mauritius is a member of the African Regional Intellectual Property Organization (ARIPO). However, as Mauritius has not yet acceded to the Harare or Banjul Protocols, it cannot be designated in patent, trademark or design applications filed via the ARIPO system.Trademark and patent laws comply with the WTO’s Trade Related Aspects of Industrial Property Rights (TRIPS) agreement. A trademark is initially registered for 10 years and may be renewed for successive periods of 10 years. A patent is granted for a maximum of 20 years. . While IP legislation in Mauritius is consistent with international norms, enforcement is relatively weak. In practice, police will usually take action against IP infringements only in cases where the IP owner has an official representative in Mauritius, as the courts require a representative to testify that the products seized are counterfeit.
The Customs Department of the Mauritius Revenue Authority is the primary agency responsible for safeguarding Mauritian borders against counterfeit goods and piracy, and is also the competent authority that enforces IP rights. The Customs Department requires owners or authorized users of patents, industrial designs, collective marks, marks or copyrights to apply in writing to the Director General to suspend clearance of goods suspected of infringing intellectual property rights. Once an application is approved, it remains valid for two years. There are no administrative costs to pay for an application. It is recommended to file an application as a preventive measure.Customs may act upon its own initiative to suspend clearance if there is evidence that IP rights are being infringed. Customs will then contact the owner or authorized user for follow-up actions. For this reason, it is best for foreign companies to have a local representative in Mauritius.Owners of IP rights are recommended to join the Interface Public Members (IPM) which allows Customs officers to access operational data input by right owners concerning their products, thus facilitating the identification of counterfeit goods.
The Customs Department keeps a record of counterfeit goods seized. Customs has authority to seize and destroy counterfeit goods. In 2021, the Customs Department carried out seizures of a total of 30,036 goods valued at $78,030, a significant decline from pre-pandemic figures. The infringing party is responsible for paying for the storage and/or destruction of the counterfeit goods. Mauritius is not listed in the 2021 U.S. Trade Representative (USTR) Special 301 Report or the 2021 Notorious Market List.
*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 GoM welcomes foreign portfolio investment.
The Stock Exchange of Mauritius (SEM) was created in 1989 and was opened to foreign investors following the lifting of foreign exchange controls in 1994. Foreign investors do not need approval to trade shares, except for when doing so would result in their holding more than 15 percent in a sugar company, a rule detailed in the Securities (Investment by Foreign Investors) Rules of 2013. Incentives to foreign investors include no restrictions on the repatriation of revenue from the sale of shares and exemption from tax on dividends for all resident companies and for capital gains of shares held for more than six months.
The SEM currently operates two markets: the Official Market and the Development and Enterprise Market (DEM). As of December 2020, the shares of 58 companies (local, global business, and foreign companies) were listed on the Official Market, representing a market capitalization of $7.0 billion, a fall of 17 percent 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. In June 2021, guidelines for the issue and listing of sustainable bonds were published. The DEM was launched in 2006 and the shares of 38 companies were listed on this index with a market capitalization of $1.1 billion as of December 2020, falling by 10 percent from December 2019. Foreign investors accounted for 41.2 percent of the trading volume on the exchange for the financial year 2020-2021, which was the highest foreign participation recorded since the financial year 2015-2016.
Standard & Poor’s, Morgan Stanley, Dow Jones, and FTSE have included the Mauritius stock market in a number of their stock indices. Since 2005, 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, the SEM launched the mySEM mobile application. In November 2020, the SEM amended its internal AML/CFT policies and procedures to align with the revamped AML/CFT framework. In 2021, the SEM secured a $600,000 grant from the African Development Bank to implement a state-of-the-art trading platform. The new trading platform is expected to go live by the end of March 2022.
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.
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 March 2022, 19 banks were licensed to undertake banking business, of which eight were local banks, eight were foreign-owned subsidiaries, and three were branches of foreign banks. One bank conducts solely Islamic banking. One bank, under conservatorship since April 1, 2020, was acquired and recapitalized by a new shareholder on October 15, 2021. Further details can be obtained at https://www.bom.mu/financial-stability/supervision/licensees/list-of-licensees.
In 2021, the Mauritian banking sector accounted for an estimated 8 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 420 percent of GDP at the end of September 2021, compared to 397 percent at the end of March 2021. The banking landscape is relatively concentrated, with the two, long-established domestic entities: the Mauritius Commercial Bank (MCB) and the State Bank of Mauritius (SBM), which together constitute about 46 percent of the market share for total deposits, advances, and assets total domestic market. Maubank, a state-owned bank, became operational in 2016 following a merger between the Mauritius Post & Cooperative Bank and the National Commercial Bank. The Bank of China started operations in Mauritius in 2016. Other foreign banks present in Mauritius include HSBC, Barclays Bank, Bank of Baroda, Habib Bank, BCP Bank (Mauritius), Standard Bank, Standard Chartered Bank, State Bank of India, and Investec Bank. Per the Bank of Mauritius, total banking assets as of December2021 amounted to $48 billion. 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).
At the end of December 2021, non-banking, deposit-taking institutions, comprising leasing companies and finance companies, held assets amounting to $1.6 billion, an increase of about 2 percent since December 2020.
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 from $ 5.8 million to $11.2 million. The Central Bank began reporting the liquidity coverage ratio in 2017 to improve the liquidity profile of banks and their ability to withstand potential liquidity disruptions.
As part of its COVID-19 response, the BoM made $132 million available through commercial banks as special relief funds to help meet cash flow and working capital requirements. The cash reserve ratio applicable to commercial banks was reduced from 9 percent to 8 percent. The BoM also put on hold the Guideline on Credit Impairment Measurement and Income Recognition, which took effect in January 2020.
In July 2019, the Bank of Mauritius Act was amended to allow the Bank of Mauritius to use special reserve funds in exceptional circumstances and with approval of the central bank’s board for the repayment of central government external debt obligations, provided that repayments would not adversely affect the bank’s operations. This provision was used in January 2020 to repay government debt worth $450 million, raising concerns about the central bank’s independence. The Mauritius Investment Corporation (MIC), a fully owned subsidiary of BoM, was also established with an initial capital of $2 billion drawn from the BoM’s reserves to provide support to economic operators through a range of equity and quasi-equity instruments. The latest International Monetary Fund Article IV report highlights that in response to the pandemic and in coordination with the government, the BoM deployed policies that led to a substantial deterioration of its balance sheet and could make it challenging to fulfill the price-stability mandate going forward.
Most major banks in Mauritius have correspondent banking relationships with large banks overseas. In recent years, according to industry experts, no banks have lost correspondent banking relationships, and none reported being in jeopardy of doing so as of April 2022. The National Payment Systems (Authorization and Licensing) Regulations, which entered into force in June 2021, provides for the authorization of operators of payment systems, clearing systems, and settlement systems and licensing of payment service providers.
In October 2021, the Bank of Mauritius launched the Climate Change Centre, which will integrate climate-related and environmental financial risks into its regulatory, supervisory, and monetary policy frameworks, while also supporting the development of sustainable finance. In February 2021, the BoM became a member of the Global Financial Innovation Network (GFIN). The BoM is currently working on a central bank digital currency (CBDC) pilot roll-out with technical assistance from the IMF.
In January 2019, the Bank of Mauritius signed a memorandum of cooperation with the Mauritius Police Force on financial crimes and illicit activities relating to the financial services sector. In February 2020, the Financial Action Task Force (FATF) named Mauritius as a jurisdiction under increased monitoring, commonly known as the Grey List. At that time, Mauritius made a high-level political commitment to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its AML/CFT regime. Since the completion of its Mutual Evaluation Report in 2018, Mauritius has made progress on a number of its recommended actions to improve technical compliance and effectiveness, including amending the legal framework to require legal persons and legal arrangements to disclose of beneficial ownership information and improving the processes of identifying and confiscating proceeds of crimes. In October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning anti-money laundering/combating the financing of terrorism (AML/CFT) based on the following reforms: (i) outreach work to promote understanding of money-laundering and terrorist financing risks and obligations; (ii) development of effective risk-based supervision plans for the regulator; (iii) improved focus on access to beneficial ownership information in a timely manner; and (iv) training to law enforcement authorities to ensure that they have capabilities to carry out money laundering investigations. In January 2022, the European Union Commission removed Mauritius from its list of high-risk third countries.
Effective March 2019, the Financial Services Commission (FSC) allows businesses that provide custodial services for digital assets. The FSC is the integrated regulator for the non-banking financial services sector and global business. In August 2020, the Peer-to-Peer Lending Rules, which enable the operation of peer-to-peer lending platforms in Mauritius by operators holding licenses issued by the FSC, entered into force. And in November 2021, the FSC launched the regulatory framework for crowdfunding. The Virtual Asset and Initial Token Offering Services Act 2021, which sets out a comprehensive legislative framework to regulate the business activities of virtual assets service providers and initial token offerings, entered into force in February 2022. Any person who is a virtual asset service provider, an issuer of initial token offerings in accordance with the Act, or a custodian (digital assets) in accordance with the Financial Services Act, needs to apply for a license or registration with the FSC.
Foreign Exchange and Remittances
The GoM abolished foreign exchange controls in 1994. Consequently, no approval is required for converting, transferring, or repatriating profits, dividends, or capital gains earned by a foreign investor in Mauritius. Funds associated with any form of investment can be freely converted into any world currency.
The exchange rate is generally market-determined though the Bank of Mauritius, the central bank, occasionally intervenes. Between January 2021 and January 2022, the Mauritian rupee depreciated against the U.S. dollar by 5.6 percent, the pound by 11.7 percent, and the euro by 7.7 percent. Due to the COVID-19 crisis, the Bank of Mauritius intervened regularly on the domestic foreign exchange market in 2020 and 2021. The latest IMF Article IV Report highlighted the fact that while the current intervention strategy has provided markets with much needed foreign exchange liquidity, its rigidity poses risks going forward.
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 GoM 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 national airline exited voluntary administration in September 2021 following a $280 million government bailout in the form of a loan arrangement through the central bank’s Mauritius Investment Corporation. In October 2021, a newly created state-owned enterprise, Airport Holdings Ltd., acquired 9.43 million shares in Air Mauritius, gaining effective control of the airline.
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 Declaration of Assets Act (DoA Act) was enacted in December 2018 and took effect in June 2019. It provides that certain key officials of the public sector, including chief executives of state-owned enterprises, must declare their assets and liabilities with the Independent Commission Against Corruption (ICAC). The declaration includes the assets and liabilities of spouses and minor children. This declaration is published on the website of ICAC. A list of SOEs is published in the Declaration of Assets (State-owned Enterprises) Regulations 2019: https://www.icac.mu/declaration-of-assets/.
The government has no specific privatization program. In 2017, however, as part of its broader water reform efforts, the government agreed to a World Bank recommendation to appoint a private operator to maintain and operate the country’s potable water distribution system. Under the World Bank’s proposed public-private partnership, the Central Water Authority (CWA) would continue to own distribution and supply assets, and will be responsible for business planning, setting tariffs, capital expenditure, and monitoring and enforcing the private operator’s performance.
In March 2018, despite protest by trade unions and consumer associations, the Minister of Energy and Public Utilities reiterated his intention to engage by the end of the year a private operator as a strategic partner to take over the water distribution services of the CWA. To date, this has not materialized. The government has said for years it planned to sell control of Maubank, into which it has injected about $173 million since it nationalized the bank in 2015. In the 2019-2020 budget speech, the prime minister said the government would sell non-strategic assets to reduce government debt. The prime minister’s 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 NCCG was attached to the Ministry of Financial Services and Good Governance until 2021, when it was recognized as a corporate body following an amendment to the Financial Reporting Act. 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 https://nccg.mu/full-code. In 2021, the NCCG also launched a Corporate Governance Scorecard to introduce an objective and quantitative element for companies to report on compliance. 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. Mauritius does not have a dedicated center for research on corporate governance.
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. In 2015, the Financial Services Commission introduced a Code of Business Conduct as part of its Fair Market Conduct Program. The Financial Services Commission has also introduced several measures in 2020 and 2021 to comply with recommendations made by the Financial Action ask Force for enhancing anti-money laundering and combatting terrorism financing standards.
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 annually contribute 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 for CSR funds set up on or after January 1, 2019. 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 and MRA websites: https://www.nsif.mu and https://www.mra.mu/download/CSRGuide.pdf.
Mauritius is highly vulnerable to climate change and its impacts on socio-economic development. The Climate Change Act, which took effect in 2021, created an inter-ministerial council on climate change chaired by the prime minister to set national targets and objectives. The cabinet must approve all decisions that fall under this law. This act also provided for the creation of a Department on Climate Change under the Ministry of Environment, which is now operational.
In November 2021, at the Conference of Parties 26 (COP 26), the GoM pledged to reduce its greenhouse gas emissions to 40 percent of the business-as-usual scenario 2030 figures. To achieve this target, the government plans to undertake major reforms in its energy, transport, waste, refrigeration and air-conditioning, agriculture, and conservation sectors. Details on the reforms for each of the six sectors will be available in the Nationally Determined Contributions (NDCs) action plan, which is scheduled for publication in April 2022. The Ministry of Environment is also working on policies to reach net-zero carbon emissions by 2070, and on a national mitigation strategy and action plan. The latter includes the development of an online NDC registry, which will serve as a monitoring, reporting, and verification tool to track biodiversity and ecosystem services to implement Mauritius’ NDC. The registry will record data on Mauritius’ adaptation and mitigation actions as well as financial and technological support required and received.
The current NDC indicates that the government plans to finance part of the $6.5 billion required to implement the NDC targets through private sector contributions. The private sector in Mauritius has indicated interest in investing in solar, hydro, and biomass renewable energy technologies.
Regulatory incentives that preserve clean air and biodiversity include: (i) exemption on excise duty applied for the purchase of a 180-kw electric car; (ii) 50 percent excise duty applied for the purchase of a hybrid car; (iii) 50 percent of registration fee applied for the purchase of both a 180-kw electric car and a hybrid car; (iv) excise duty on PET plastic bottles; (v) a petroleum levy on petroleum products; (vi) an environmental protection fee for battery and tyres upon purchase of an electric or hybrid car, (vii) a carbon levy upon purchase of a conventional motor car; and (viii) a permit fee for companies operating in a marine protected area.
The government also offers tax incentives to companies who make clean energy investments through provisions in the Income Tax Act 1995, the Customs Act, and the Value Added Tax Act. The tax incentives for a company include (i) double deduction of the expenditure of a fast charger for an electric car; (ii) an annual allowance of 100 percent on the capital expenditure for the acquisition of a solar energy unit; (iii) an annual allowance of 50 percent (straight line) on the capital expenditure for the acquisition of green technology equipment; (iv) tax exemption on interest perceived by a company that invests in renewable energy projects through debentures and bonds; (v) eight-year tax holiday for companies that use deep ocean water for providing air conditioning services; (vi) customs duty and value added tax exemptions on any purchases of photovoltaic systems and chargers for electric vehicles.
The tax incentives government provided on solar energy equipment encouraged investments in power production from solar energy. Statistics indicate that solar energy power production increased by 3.5 percent from 2018 to 2020.
The European Union is currently providing technical assistance to the government to improve its public procurement policies under the ‘Switch to Green’ facility. The objective of the project is to encourage public organizations to make their activities more environmentally friendly through the adoption of sustainable consumption practices with respect to energy and water conservation, waste minimization, paperless work, and adoption of sustainable technology and business practices to improve service delivery.
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 court proceedings are ongoing, with the latest hearing held in February 2022. 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 and board members of ICAC are 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, which requires 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. This declaration is published on the website of ICAC: https://www.icac.mu/declaration-of-assets/disclosure-of-declarations/.
Mauritius’ rating by the Corruption Perceptions Index of Transparency International improved in 2021. The country was rated the 49th least-corrupt nation out of 180 countries, compared to 52nd in 2020 and 56th in 2019. However, Mauritius retained its first rank in overall governance in Africa for the 10th consecutive year, according to the 2020 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 the declaration of assets, asset recovery, prevention of corruption, anti-money laundering, and criminal offenses 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 and adopted 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 has not yet adopted all the recommendations, such as the criminalization of corruption in the private sector. According to Transparency Mauritius, NGOs involved in fighting corruption are not given enough protection and funding.
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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, employment of Mauritians stood at 476,100 in September 2021 (289,100 males and 187,000 females), a decrease from 507,100 in 2020, and 591,000 in 2019. The number of unemployed stood at 49,800 in September 2021, a decrease from 52,200 in 2020. In 2019, the number of unemployed was estimated at 39,700. The unemployment rate for the third quarter of 2021 was estimated at 9.5 percent, compared to 10.5 percent in the second quarter of 2021 and 10.4 percent in the third quarter of 2020. Employment in large establishments (employing 10 or more persons) as of March 2021 was estimated at 305,532 (186,227 male and 119, 305 female) out of which 30, 013 were foreign workers (23,961 males and 6,052 females).
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. The HRDC, in collaboration with the Economic Development Board (EDB), has also established a Skills Development Support Scheme for Foreign Direct Investment to support foreign investors in training their employees. Through this scheme, the HRDC provides eligible employers up to 80 percent of the total amount disbursed on training; the remaining 20 percent is incurred by the employer. The objective is to develop technical expertise and specialization, and likewise boost the skills base for attracting FDI.
In 2018, the government introduced the SME Employment Scheme, which allows SMEs to employ recent graduates, whose monthly stipends are paid by the government for one year. In 2019, the government expanded the program to diploma holders.
In 2017, the National Assembly passed the National Employment Act. This act repealed the Employment and Training Act and introduced 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 $209) for all workers, which impacted 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 ($237), effective January 2020. The minimum wage was further increased to 10,575 rupees ($246) in January 2022.
Workers’ rights are protected under the 2019 Workers’ Rights Act. The legislation provides, among others: 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. The act also expands the Equal Opportunities Act through several measures against discrimination in employment and occupation.
Trade unions are independent of the government and employers. Mauritius has an active trade union movement that 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. Disputes are resolved at the Conciliation and Mediation Section of the Ministry of Labor or at the Commission for Conciliation and Mediation. If the matter is not resolved, it is referred to the Employment Relations Tribunal. 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 or Development Finance Programs
In December 1997, Mauritius signed an investment incentive agreement with OPIC. Mauritius, reclassified in July 2021 an upper middle-income economy, 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 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)