Mauritius as an emerging platform for business opportunities and foreign investors.
Investing in Mauritius is more attractive than many other places because of its very light tax regime, and its strong track record on the rule of law. The success of Mauritius is built on its low tax economy which helped in promoting business and provides prosperity for all its economic partners.
For local companies, the corporate tax is 15% whilst companies dealing in the global business (‘offshore’) sector are taxed at a flat corporate rate of 15% on business profits, although foreign tax credits will be allowed to the full extent on the Mauritius tax for taxes paid at source (where ever this can be evidenced). Alternatively, a system of foreign tax credits of 80% effectively reduces the income tax rate to 3% on the qualifying income of the company. Hence, the tax payable in Mauritius can be less than 3% (and can even be reduced to nil), whereas the actual foreign taxes are above 12%.
With the upcoming challenges and the need for adherence to stringent international norms and standards that are impinging on Financial Services Sector, the Mauritian Government is working on solutions to overcome these issues. In the budget 2017/2018, it has announced the Elaboration of a 10-year blueprint to cater for the forthcoming international fundamentals with regards to taxation without hindering the competitiveness of the jurisdiction. In addition, to enhance the reputation of the country as a jurisdiction of substance, the licensing criteria for GBC1 companies will become more stringent so that these companies will be required to fulfil at least two of six criteria established by the FSC. Investors are constantly in search of jurisdictions having highest standards of regulation and which are committed to comply with international standards. Investors are also on the lookout for jurisdictions that have the breadth and depth in respect of legal vehicles and professional services. In this aspect, Mauritius offers a wide range of choices pertaining to the types of investment vehicles such as companies, protected cell companies, sociétés, trusts, limited partnerships and foundations making Mauritius a unique jurisdiction for the structuring of cross border transactions, asset protection and estate/succession planning.
To further develop the financial services industry, Mauritius is positioning itself as a Fintech Hub for Africa to harness the benefits of the emerging technologies & services. It is a logical sequence that Mauritius now leverages its competitive edge to pioneer the provision of services and products in Fintech to the region and tap the multi-billion worth of investment in areas such as e-payment, insurance, crowdlending or crowdfunding.
In the domestic area, investors willing to set-up a Manufacturing plant in Mauritius for exportation will be delighted with the new budget measures, whereby tax rate on exports of goods has decreased from 15% to 3%. Other measures they would be benefiting from are an 8-year income tax-holiday for manufacturers of pharmaceuticals, medical devices and high-tech products incorporated after 8 June 2017 and extension of the 8-year work permit policy, currently applicable exclusively to expatriate workers in export-oriented enterprises, to all manufacturing activities. On the other hand, new companies involved in innovation-driven activities will benefit from a tax holiday of 8 years on the income derived from the totality of their Intellectual Property Assets. These measures will surely encourage investors to come to Mauritius to tap into the potential offered by the country.
To further facilitate businesses, the Mauritian government is enhancing economic cooperation and diplomacy, embarking on setting up Permanent Joint Commissions in several countries and the development of Special Economic Zones in Senegal, Ghana, Madagascar and Côte d’Ivoire. Mauritius now has a vision to create an ecosystem of value-added services to consolidate its position as the regional hub for Africa.
In addition, to attract investors as well as immigrants to come to live and work in Mauritius, the following additional measures have been announced;
- For the purpose of an application for an Occupation Permit, high tech machines and equipment will be considered as part of the minimum investment of USD100, 000.
- Retired non-citizens transferring at least USD 2,500 monthly will be eligible to a residence permit.
- An Innovation Occupation Permit for innovative start-ups with a minimum operational expenditure of 20% on Research & Development.
- Reduction in the timeframe for issuance and renewal of work permit from 40 to 15 working days.
- A short-term bridging work permit in cases of delays in renewal of work permits.
- Mauritian Diaspora Scheme – 10-year tax holiday will be limited only on income derived from specific employment, business, trade, profession or investment registered.
- A Non-Citizen buyer acquiring a unit in a hotel for an amount of at least USD 500,000 will qualify for Residence Permit.