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Online News Sources
L’ express: www.lexpress.mu
Le mauricien: www.lemauricien.com
Business Environment
Mauritius made a commitment to the OECD to eliminate harmful tax
practices by the end of 2005. Under the Financial Services Development
Act 2001 the Financial Services Commission took over the functions of
the Stock Exchange Commission, the Controller of Insurance and the
Mauritius Offshore Business Activities Authority. The Financial
Services Commission is the regulator for all non-banking financial
activities, including global business activities (formerly known as
offshore activities), insurance business, the securities market.
Mauritius has a relatively sophisticated banking sector with 11
domestic banks and 12 offshore banks as at the end of 2004. The
offshore banks are engaged in a wide range of internationally based
business, including private banking, deposit-taking and lending,
foreign exchange trading, fund management, investment advisory
services, trade financing, trusteeship of offshore trusts, and
securities custodial services. The Bank of Mauritius, the central bank,
carries out the supervision and regulation of banks as well as non-bank
financial institutions authorized to accept deposits. The Bank of
Mauritius started licensing offshore banks in the early 1990s. Offshore
banks have to be a branch or related corporation of a foreign bank of
established reputation, or a bank incorporated in Mauritius. As part of
a drive to modernize the banking sector, the government passed a new
Banking Act in September 2004, which puts an end to the distinction
between domestic and offshore banks.
Global business is defined under the Financial Services Development
Act 2001 as activities carried on from within Mauritius with persons
all of whom are resident outside Mauritius and which is conducted in
foreign currency. The Act also defines global business as activities
carried on by a private company incorporated or registered under the
Companies Act 2001, which does not conduct business with persons
resident in Mauritius nor conduct any dealings in Mauritius currency
and which holds a category two global business licence.
The main corporate vehicles available to carry offshore activities
from within Mauritius are: (1) category 1 global business licence; (2)
protected cell company; (3) category 2 global business licence.
Offshore activities can also be carried out through a trust structure
or a société (partnership).
A category 1 global business licence (GBC 1) company is allowed to
engage in various activities including those involving capital raising
from the public. It is characterised by its provisions for investors'
protection and is required to file annual audited financial statements
with the Financial Services Commission. A GBC 1 may be set up by direct
incorporation, or by registration of a branch of a foreign company, or
by way of continuation where it is allowed by the law in the country of
origin. A branch of foreign company may have access to Mauritius’
double tax treaties provided that local tax authorities are satisfied
that effective control and management of the foreign company is in
Mauritius. The GBC 1 structure allows a foreign company to register in
Mauritius by way of continuation and gain tax relief for existing
holdings in a country with which Mauritius has a double taxation
treaty. A GBC 1 may be unlimited or limited by shares or by guarantee
(for non-profit making businesses only). A GBC 1 may be registered as a
limited life company. Offshore funds may be listed on the Stock
Exchange of Mauritius.
A protected cell company (PCC) is a special purpose vehicle
providing legal segregation of assets attributable to each cell of the
company whether corporately or individually owned. A PCC may be
directly incorporated or may be registered as a foreign company by way
of continuation as a PCC as long as the incorporation and registration
requirements prescribed in the Companies Act 2001 are satisfied. The
incorporation procedure for a PCC is similar to that of a GBC 1. In the
case of a continuation, additional requirements as laid down in section
5 of the PCC Act 1999 must be satisfied. Section 6 of the Act
stipulates that the suffix 'PCC' must be added to the name of the
company. The PCC Act also allows an existing company to convert into a
PCC.
A category 2 global business licence (GBC 2) provides for greater
confidentiality and is used for holding and managing private assets. A
GBC 2 is not allowed to raise capital from the public. The GBC 2 is not
resident for tax purposes and is barred from benefiting from double
taxation relief under the Mauritius' tax treaties. The GBC 2 may either
be limited by shares or by guarantee or limited by shares and guarantee
or simply unlimited. An international company may also be registered as
a limited life company.
Under the Trust Act 2001 a trust may be set up by residents and
non-residents in Mauritius as charitable trusts, discretionary trusts,
purpose trusts or trading trusts. Trusts are not required to disclose
the name of the settlor or beneficiary. Mauritius' forced heirship rule
does not apply to trusts set up by non-citizens. The Trust Act 2001
allows the enforceability of a foreign trust provided that it does not
purport to do anything which is amounts to an offence under the law of
Mauritius or is 'immoral or contrary to public policy'. A trust may
carry on a 'qualified global business' after obtaining a category 1
global business licence. A trust may not apply for a category 2 global
business licence.
The Code de Commerce Amendment Act 1985 allows for registration as a société en nom collectif (partnership) and société en commandite simple
(limited partnerships). Both types of registration may be used for
structuring investment as under the Financial Services Development Act
2001. A société may conduct any qualified global business
activities after it has received a category 1 global business licence
from the Financial Services Commission. However, a société does not qualify for a category 2 global business licence. The Finance Act 1996 allows sociétés to be covered by Mauritius' double taxation treaties.
The main vehicles used to carry out business, other than an approved offshore business, are the company or the société (partnership). Local companies and local branches of a foreign company are governed by the Companies Act 1984. Sociétés
are governed by the Code de Commerce. Local companies are regulated by
the Registrar of Companies. Both public and private companies should
have a minimum of two shareholders. Private companies may not have more
than 25 shareholders. A company must have a minimum paid up capital
of Rs25,000.
Taxes
One of the major attractions of Mauritius as a base for inward
investment in several countries, especially India, China and Pakistan
is its network of double taxation treaties. Mauritius has a growing
network of double Tax Treaties with 33 countries including Barbados,
Belgium, Botswana, China, Croatia, Cyprus, France, Germany, India,
Indonesia, Italy, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia,
Mozambique, Namibia, Nepal, Oman, Pakistan, Russian Federation, Rwanda,
Senegal, Singapore, Sri Lanka, South Africa, Swaziland, Sweden,
Thailand, Uganda, United Kingdom, Zimbabwe.
Corporate income tax rates
- Current normal rate: 35% (for assessment year ending 30 June 2001, thereafter 25%)
- Tax incentive companies : 15%
- Listed companies on the Stock Exchange (including a subsidiary of a listed company) : 25%
- Offshore Companies: taxed as tax incentive companies (see below)
- International Companies : Exempt
Offshore Trusts
- Resident Offshore Trust (taxed on trust's net income) : 15%
- Resident beneficiaries (taxed on distributions) : 15%
- Non-resident offshore trust : Exempt
- Non-resident beneficiaries : Exempt
Income Tax
- Basic: 15% - 25%
- Salaries of expatriate employees: 12.5%
- Value Added Tax (basic rate): 10%
Notes
- Offshore companies are included in the list of tax incentive companies.
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Offshore companies registered before 1 July 1998 could either elect to
be taxed at any rate between 0 to 35% or could irrevocably elect to be
taxed at 15%. Companies registered on and after that date pay 15%, or
until 30 June 2001 can elect to pay any rate between 15 to 35%.
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Offshore companies are entitled to a credit for foreign tax on foreign
source income. The foreign tax credit is equal to the higher of the
actual foreign tax paid or the deemed foreign tax (at present 90% of
the Mauritius Tax payable). The deemed foreign tax rate will reduce to
80% on 1st July 2003.
- Associates of an offshore société
are liable to income tax in respect of their share of income tax in
that société at the rate of 15%. An offshore société may also elect to
be taxed as a tax incentive company in which case it will qualify as a
resident for the purposes of certain double taxation treaties.
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An offshore trust is liable to tax as a tax incentive company on its
chargeable income, and is entitled to foreign tax credit. The trustees
of an offshore trust may make a declaration of non-residence, in which
case the offshore trust will not be regarded as resident in Mauritius
for tax purposes.
- No capital gains tax is levied on
gains arising on the sale of movable and immovable property (including
shares) other than gains made on the parceling out of land for resale.
Dividends are exempt from tax, and interests are taxed at the rate of
25% (subject to available exemptions).
Stock Exchange
In 1989 Mauritius set up its own stock exchange under the
Stock Exchange Act 1988. The exchange is regulated by the Financial
Services Commission. The Stock Exchange of Mauritius (SEM) operates two
markets: the official market, on which securities of listed companies
are traded, and the over-the-counter (OTC) market. . In January 2005,
the SEM had 42 companies plus two mutual funds listed on the Official
Market and 78 Over-the Counter companies. Market capitalization grew
from US$55 million in 1989 to US$2.3 billion in mid-January 2005.
The Stock Exchange established a Central Depository
System in 1997 to provide centralized depository, clearing and
settlement services for equities and debts. In 2001, the SEM introduced
the Automated Trading System, which incorporates internet trading
facilities, enabling investors to follow the stock market on a real
time basis. The SEM's listing rules have been harmonized with the rules
of various stock markets of the Southern African Development Community
(SADC) countries and members of the African Stock ExchangesAssociation
to facilitate cross-border listings.
The stock market was opened to foreign investors
following the lifting of exchange control in 1994. Foreign investors do
not need approval to trade shares unless investment is for the purpose
of legal or management control of a Mauritian company or for the
holding of more than 15% in a sugar company. Revenues on the sale of
shares can be freely repatriated and dividends and capital gains are
tax-free for foreign investors.
The Exchange was recently promoted from the status of
'corresponding exchange' to that of Affiliated Securities Market within
the Fédération Internationale des Bourses de Valeurs (FIBV). Mauritius
is also a member of the African Stock Exchanges Association (ASEA).
In January 2006 the SEM plans to launch a ‘New Market’
and wind up the existing OTC Market. The ‘New Market’ will seek to
attract a wide range of companies from young, venture capital
businesses to more established businesses including those that are
family owned. It is envisaged that this market will act as a
stepping-stone to the Official Market.
Key Contacts
The Financial Services Commission.
4th Floor, Harbour Front Building,
President John Kennedy Street,
Port Louis, Mauritius
Tel : (230) 2107000
Fax: (230) 2087172
Internet: www.fscmauritius.org
Companies Division
Les Bacha Building,
Listley Geoffroy Street,
Port-Louis
Mauritius
Pabx: 211-2531, 211-4460
Hotline: 208-4539
Fax: 208-7263
e-mail: rocd@intnet.mu
Mauritius International Financial Services Centre
5th Floor, Barkly Wharf, Le Caudan Waterfront
Port Louis, Republic of Mauritius
Tel: (230) 211 83 83
Fax: (230) 208 81 60
E-mail - info @ f spamauritius.com
Internet: www.fspamauritius.com
Ministry of Industry, Small & Medium Enterprises, Commerce & Cooperatives
(COMMERCE DIVISION)
8 th Floor, Medcor, Air Mauritius Centre,
John Kennedy Street,
Port Louis,
Republic of Mauritius
Tel: (230) 210-3774 / 75 / 76
Fax: (230) 201-3289
E-mail : mincom@mail.gov.mu
The Stock Exchange of Mauritius
Mr. Sunil Benimadhu
Chief Executive
4th Floor, One Cathedral Square Building
16, Jules Koenig Street
Port Louis
Republic of Mauritius
E-mail: stxbeni@intnet.mu
Tel: (230) 212 9541
Fax: (230) 208 8409
Internet: www.semdex.com
Key Stats
Country Description: Republic of Mauritius. Capital:
Port Louis. Dependencies: Rodrigues Island, the Agalega Islands and
Cargados Carajos.
Population: 1,230,602 (July 2005 est.,). Ethnic
groups: Indo-Mauritians 68%, Creoles 27%, Sino-Mauritians 3%,
Franco-Mauritians 2%.
Language: English (official) and French. Creole (common). Hindi, Urdu, Hakka and Bhojpuri languages are also spoken.
Currency: Mauritian rupee (Rs). US$1 = Rs29.85 (September 2005)
Legal system
A hybrid system based on both on the
French Civil Code and English law. Mauritius has district courts, a
bail and remand court, an intermediate court, an industrial court and a
supreme court. The final court of appeal is the UK’s Privy Council.
Mauritius has a written constitution.
Government
The head of state is the president. The
prime minister is the head of government, and presides over the
cabinet. The National Assembly, the country’s parliament, consists of
62 elected members plus up to eight members appointed by the election
commission from the losing political parties to give representation to
various ethnic minorities. Elections are held every five years.
President: Karl Auguste Offman
Prime minister, defence and home affairs: Paul Berenger
Elections
In elections held in September 2000, a
coalition of the Mouvement Socialiste Mauricien (MSM) and Mouvement
Militant Mauricien (MMM) received 51.7% of the vote and hold 54 seats
in the National Assembly. The Parti Travailiste won 36.6% of the vote
and holds six seats. The Organisation du Peuple Rodriguais, a
regionalist party, holds two seats.
Political parties
Mouvement Socialiste Mauricien (leader Aneerood Jugnauth)
Mouvement Militant Mauricien (leader Paul Berenger)
Mauritius Labour Party (leader Navin Ramgoolam).
Organisation du Peuple Rodriguais (Rodrigues People's Organisation)
Economy (2004)
Since independence in 1968, Mauritius has developed
from a low-income, agriculturally based economy to a middle-income
diversified economy with growing industrial, financial, and tourist
sectors. For most of the period, annual growth has been in the order of
5% to 6%. This remarkable achievement has been reflected in more
equitable income distribution, increased life expectancy, lowered
infant mortality, and a much-improved infrastructure. Sugarcane is
grown on about 90% of the cultivated land area and accounts for 25% of
export earnings. The government's development strategy centers on
expanding local financial institutions and building a domestic
information telecommunications industry. Mauritius has attracted more
than 9,000 offshore entities, many aimed at commerce in India and South
Africa, and investment in the banking sector alone has reached over $1
billion. Mauritius, with its strong textile sector, has been well
poised to take advantage of the Africa Growth and Opportunity Act
(AGOA) Source: CIA The World Factbook
Gross domestic product (2004)
GDP at basic prices in 2004 increased by 10.4% to
reach R 151,296 million compared to R 137,097 million in 2003. In real
terms, the growth rate is estimated at 4.1%, slightly higher than the
3.9% recorded in 2003.
Exports and Imports (2004)
Imports of goods and services reached R 99,215 million
in 2004 compared to R 86,694 million in 2003, representing an increase
of 14.4%. In real terms, it grew by 3.0% after a decline of 3.1% in
2003
Exports of goods and services, on the other hand,
increased by 7.3% from R 88,716 million in 2003 to R 95,177 million in
2004. In real terms, it grew by 0.5% after declining by 3.9% in 2003.
Net international reserves (November 2002): US$1,544.5 million or Rs42,319 million.
Annual Inflation rate (2004): 4.5%
Labour force (2004)
Total labour force: 560,000
(Mauritian and expatriate). Unemployment rate 10.8%. Foreigners make up
3% of those employed in Mauritius.
Government accounts (2004 est): revenues: US$1.231 billion; expenditures: US$1.582 billion, including capital expenditures of NA.
Government financial year
1 July – 30 June
Public holidays (2005)
1-2 January (New Year);
25January (Thaipoosam Cavadee); 1 February (Abolition of Slavery); 9
February(Chinese spring festival); 8 March (Maha Shivratree); 12 March
(National Day); 9 April (Ougadi); 1 May (Labour Day); 15 August
(Assumption of the Virgin Mary); 8 September (Ganesh Chathurti);
1November (All Saints Day); 1 November (Divali); 2 November (Arrival of
Indentured Labourers); 4 November (Eid-Ul-Fitr, depending on the
visibility of the moon); 25 December (Christmas).
Time zone
GMT +4 hours. There is no summer time clock change.
Restaurant Guide
We recommend:
Le Clos Saint-Louis
Domaine des Pailles
Indra
Domaine des Pailles
La Terrasse
Hotel Labourdonnais, Caudon Waterfront,
Port Louis
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