Type of Legal System

Mauritius has a “hybrid” or “mixed” legal system, inherited from its past colonial masters – the French and the British. The Constitution of Mauritius is based on the Westminster model, while the substantive law (civil rights, property law, contract law) are French-derived and procedural laws are English-based.

Sources of Mauritian Law

The primary sources of law in Mauritius emanate from:

• the written Constitution, which is the supreme law of the country;
• the legislature – ie, Parliament, which enacts laws in accordance with its power to make laws under the Constitution;
• the executive, which administers the laws enacted by Parliament;
• the judiciary, which interprets the laws; and
• judicial precedent, legal customs, equity and doctrine.

The Supreme Court

The Supreme Court is a superior court of record that has original jurisdiction to:

• hear and determine civil and criminal matters;
• interpret the Constitution;
• act as a court of equity; and
• exercise general powers of supervision over all the subordinate courts.

The Commercial Division of the Supreme Court

The Commercial Division of the Supreme Court has jurisdiction to hear and determine:

• matters arising under the Insolvency Act 2009 and the Companies Act 2001;
• disputes relating to banking, bills of exchange, offshore business, patents and trade marks or passing off;
• disputes between traders and related matters; and
• in general, anything that is of a commercial nature.

The Intermediate Court

Following recent legislative amendments, the Intermediate Court now has jurisdiction in all civil cases where the claim or matter in dispute ranges between MUR250,000 and MUR2 million.

The District Court

The District Court has jurisdiction to hear civil cases where the claim or matter in dispute does not exceed MUR250,000.

Business Structures

In regard to businesses operating in Mauritius, the common legal structures used are as follows.

Companies

Companies, established under the Companies Act 2001, can be public or private, limited (by shares, guarantees or both) or unlimited.

Limited partnerships

A limited partnership (LP), established under the Limited Partnerships Act 2011, may be set up with or without a legal personality.

Limited liability partnerships

Another widely used business vehicle in Mauritius is the limited liability partnership (LLP), which is established under the Limited Liability Partnerships Act 2016.

Protected cell companies

A protected cell company (PCC), established under the Protected Cell Company Act 1999, is a special type of corporate vehicle, made up of different “cells” that are segregated from each other.

Trusts

A trust, under the Trusts Act 2001, is an arrangement for holding and administering property, where the beneficial owner (known as the settlor) creates the trust and transfers property or legal rights to a trustee.

Sociétés

Sociétés are governed by the Commercial Code and the Civil Code. The life of a Société is limited to a maximum of 99 years.

Regulatory Bodies

The Registrar of Companies of Mauritius (ROC) administers:

• the Companies Act 2001;
• the Business Registration Act 2002;
• the Insolvency Act 2009;
• the Limited Partnerships Act 2011; and
• the Foundations Act 2012.

The Financial Services Commission of Mauritius (FSC) is the integrated regulator for the non-bank financial services sector and for global business. The FSC is mandated to license, regulate, monitor and supervise the conduct of business activities in these sectors.

The Stock Exchange of Mauritius (SEM) has full regulation over listing requirements, compliance and market supervision.

The Competition Commission is a statutory body established in 2009 to enforce the Competition Act 2007, under which the Competition Commission can investigate possible anti-competitive behaviour by businesses.

The Bank of Mauritius provides for its objects, powers and functions regarding the licensing, operation, regulation and supervision of banks and other financial institutions.

The Financial Intelligence Unit is responsible for the request, receipt, analysis and dissemination of financial information regarding suspected proceeds of crime and alleged money-laundering offences.

The Ombudsperson for Financial Services is responsible for providing better protection to consumers of financial services.

Restrictions on and Approval of Foreign Investments

Foreign investors may invest in a number of fields, such as:

• agro-industry;
• aqua-culture and ocean economy;
• education;
• financial services;
• healthcare;
• hospitality;
• property development and smart cities;
• ICT-BPO (information and communications technology, and business process outsourcing);
• life sciences;
• logistics;
• manufacturing; and
• media and creative industries.

Depending on the nature of the activity, some may require prior approval from the Economic Development Board (EDB) and/or other relevant authorities.

Businesses engaged in unregulated activities may start operations immediately after registering with the Corporate and Business Registration Department.

Investing in Certain Regulated Activities

The following activities may be invested in when meeting the relevant requirement:

• banking – licence from the Bank of Mauritius;
• freeport activities – Freeport Certificate issued by the Economic Development Board;
• tourism-related activities – licence from the Tourism Authority;
• telecommunications operations – licence from the Information and Communication Technologies Authority;
• education and training – certificate of registration/licence from the Early Childhood Care and Education Authority, the Private Secondary Education Authority and/or the Tertiary Education Commission;
• healthcare activities – licence from the Ministry of Health and Wellness;
• gambling and gaming activities – licence from the Gambling Regulatory Authority; and
• offshore petroleum activities – licence/permit from the Department for Continental Shelf, Maritime Zones Administration and Exploration.

No information is available.

The most common structure used for mergers and acquisitions (M&A) in Mauritius is the acquisition of the shares of the target company. The share acquisition is documented in a share purchase agreement.

Other structures include asset purchase and amalgamation of two or more companies into one of the amalgamating companies or a new company, or a takeover offer where the offeror offers to acquire more than 30% of the rights attached to the voting shares of the target. There are no distinct preferences for acquisitions of public companies versus private companies.

The key considerations for a foreign investor will depend not so much on the structure but on whether the target company holds immovable property in Mauritius, in which case the foreign investor will have to seek the prior approval of the Prime Minister’s Office before making the acquisition, whether by way of share purchase, asset purchase or amalgamation (as there are restrictions on the acquisition of immovable property, directly or indirectly, by foreigners in Mauritius).

Other factors which come into play include:

• the time taken by the authorities to process an application for authorisation (if applicable);
• the due diligence process for ascertaining the financial and corporate position of the target; and
• any tax or potential tax issues which have to be addressed prior to the acquisition.

When there is no immovable property involved, the more straightforward structure is share acquisition.

As for minority investments, these usually take the form of a share purchase.

As indicated in 3.1 Transaction Structures, the prior authorisation of the Prime Minister’s Office is required if the target company holds immovable property, or if the assets purchased comprise immovable property, and the registration duty must be paid to the Registrar-General.

Full know-your-customer (KYC) has to be provided by the foreign investor in accordance with the anti-money laundering legislation in Mauritius.

The ROC oversees the regulation of share transfers and mergers, while the FSC regulates takeovers. Compliance with the listing rules of the SEM is mandatory for listed companies involved in takeovers or mergers, including submission of  all the relevant documents and information for review and approval before the transaction can take place. Furthermore, if the target company operates in a specific sector or engages in regulated activities, approval from various regulators may be necessary.

Although the Mauritian government encourages foreign investments, there are some restrictions on the acquisition of immovable property and in certain sectors, such as public media, etc.

Types of Legal Structures and the Most Commonly Used Structure

An investor may choose from a range of corporate vehicles (such as companies, partnerships, limited partnerships, limited liability partnerships, trusts or foundations) to invest in Mauritius.

The most commonly used legal entity is the company limited by shares, which offers limited liability to its shareholders. In the event of liquidation of a company limited by shares, the liability of the shareholders is limited only to the amount unpaid, if any, on the shares.

A company having more than 50 shareholders or wishing to offer its shares to the public is constituted as a public company.

Corporate Governance

The main legislation governing the operation of a company incorporated in Mauritius is as follows.

• The Companies Act 2001 (the “Companies Act”), which sets out how a company in Mauritius is incorporated and managed. The Companies Act gives the shareholders a certain degree of flexibility to provide for a management which would suit the specific shareholders on certain aspects.
• The Securities Act 2005, which, inter alia, regulates the disclosure of information by persons issuing securities to the public; and
• The Insolvency Act 2009, which governs the procedures and distributions to be made in the event that the company becomes insolvent or is wound up.

Mauritius has also implemented a code of corporate governance which applies to:

• public institutions;
• entities listed on the Stock Exchange of Mauritius;
• insurance companies;
• certain categories of financial institutions;
• companies which have, during the preceding two consecutive years, an annual turnover exceeding MUR500 million or total assets exceeding MUR500 million; and
• group companies which have, during the preceding two consecutive years, an annual turnover exceeding MUR1 billion or total assets exceeding MUR1 billion.

A minority shareholder who considers that the affairs of a company are being conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial to them can seek redress in court.

Minority shareholders may also request the company to buy back its shares in the event of:

• adoption of a new constitution;
• approval of amalgamation;
• variation of rights attached to their shares; or
• the company entering into a major transaction.

In line with the anti-money laundering, combating of terrorism and proliferation financing laws applicable in Mauritius, a person is required to disclose their CDD documents – ie, documents attesting their identity, nationality and residential address, and in some cases source of funds/wealth.

Where the investor is a legal person or legal arrangement, details would have to be provided on the nature of the business and the ownership and control structure, including details on any individuals exercising control over the structure. This would include identity of the natural persons who ultimately have a controlling ownership interest in a legal person. No specific threshold has been set out in the law qualifying the controlling ownership, but the generally accepted threshold is 20%.

In other circumstances, the individuals exercising control, or the identity of such relevant natural person who holds the position of senior managing official, would have to be disclosed. In essence, the same principles and standards set out in the guidance notes on transparency and beneficial ownership of the Financial Action Task Force have been enshrined in the domestic laws and regulations.

In the event of a disposal of the FDI, there is an obligation on banks, financial institutions, cash dealers or other professionals dealing with the transaction to scrutinise the transactions undertaken – including, where necessary, the source of funds – to ensure that the transactions are consistent with the customer’s business. However, no disclosure is required to be made at the level of governmental authorities.

There is no threshold of ownership percentage for FDI.

In Mauritius, businesses often consider a mix of capital market instruments, bank financing and other sources based on their specific needs, risk profile and growth plans.

Capital markets can be defined as markets in which individuals and institutions buy/sell financial securities, which can be shares or stocks, bonds, debentures and other financial instruments.

The Stock Exchange of Mauritius (SEM) is the principal stock exchange in Mauritius. It provides a platform for the listing and trading of equities and other financial instruments.

Listing on the SEM

Companies can access capital by listing their shares on the SEM through initial public offerings (IPOs). This allows them to raise funds from public investors.

Equity Financing

IPOs on the SEM

Companies seeking equity financing can go public by listing on the SEM. This allows them to attract investment from a broader range of investors.

Debt Financing

Corporate bonds

Businesses can issue corporate bonds on the SEM to raise funds through debt financing. Investors, including institutional investors, may purchase these bonds.

Regulatory Body

The Financial Services Commission (FSC)

The FSC regulates the financial services sector in Mauritius, including capital markets. The FSC licenses, regulates, monitors and supervises activities in the financial services sector other than banking, including capital markets.

Key Regulatory Aspects

Licensing and registration

The Securities Act mandates licensing and registration requirements for entities involved in securities activities, including stockbrokers, dealers, and investment advisers.

Listing requirements

The SEM sets out listing requirements for companies seeking to go public. These requirements ensure transparency and protect the interests of investors.

Continuous disclosure

Issuers listed on the SEM are typically required to make timely and accurate disclosures of material information to the public.

Market conduct

Securities laws in Mauritius govern market manipulation, insider trading and other forms of market abuse to maintain the integrity of the capital markets.

Investor protection

Regulations are in place to safeguard the interests of investors, ensuring fair and equitable treatment.

Securities Laws and Foreign Investors

Foreign investors engaging in securities activities or investing in listed companies in Mauritius are generally subject to the same securities laws and regulations as domestic investors.

Compliance with licensing, registration and disclosure requirements may be necessary for foreign entities involved in securities activities.

Foreign investors are likely to be subject to AML and KYC requirements, which are crucial aspects of financial regulations aimed at preventing money laundering and ensuring due diligence in financial transactions.

Foreign Investment Considerations

Foreign investment, including foreign investment entities as funds, may trigger regulatory review to ensure compliance with applicable laws and regulations. The criteria used in conducting a regulatory review include the following.

Nature of the investment

The FSC may assess the nature and purpose of the investment to ensure it aligns with the regulatory framework and economic policies.

Investor due diligence

The FSC may require comprehensive due diligence on the foreign investor, including information on the source of funds and the investor’s background.

Compliance with regulations

The fund will likely be reviewed to ensure compliance with relevant investment regulations, including those related to securities laws and anti-money laundering (AML) regulations.

Mauritian entities publicly offering their interests to foreign investors, including investment funds, must comply with certain public-offer securities requirements under the Securities Act 2008. There are workable exemptions/exceptions where the investor is:

• a sophisticated investor;
• a recognised foreign CIS (which is a collective investment scheme established in a foreign country whose securities are marketed to retail investors in or from Mauritius and recognised by the FSC following an application to it); or
• undertaking certain permitted CIS activities.

The latter-mentioned activities are defined as the marketing/selling to a sophisticated investor in Mauritius of units or shares of an entity that carries out the activities of a collective scheme, and that is established in a foreign country where such marketing is undertaken:

• by a CIS manager established in Mauritius;
• by a person carrying out the activities of an investment dealer outside Mauritius; or
• in accordance with such other provisions as the FSC may determine.

Mauritius has a voluntary merger notification regime. There is no legal obligation, or mandatory requirement, for merging enterprises to notify a merger situation to the Competition Commission either before or after implementation of the merger.

Merger parties have the option of notifying the merger situation to the Competition Commission and of seeking guidance as to whether the proposed merger situation is likely to result in a substantial lessening of competition in any market in Mauritius.

In practice, parties are encouraged to contact the Competition Commission, through pre-merger consultations, to discuss the nature of the transaction and whether notification to the Competition Commission is advisable. Indeed, notwithstanding the discretionary nature of the notification, the Competition Commission is empowered to impose directions to remedy a situation where the merger is likely to result in substantial lessening of competition in any market in Mauritius, including directions to block the merger or to require divestment of assets. For this purpose, a merger situation is defined as the bringing together under common ownership and control of two or more enterprises, of which at least one carries out its activities in Mauritius or through a company incorporated in Mauritius.

Notification is strongly advisable if any of the following conditions are present:

• one or all of the merging enterprises is a significant player in the economy;
• one or all of the merging enterprises is a significant player on a given market;
• one or all of the merging enterprises has significant market shares;
• the turnover or assets of the enterprises are significant (indicatively above MUR100 million); and/or
• the products supplied or acquired by the merging enterprises are related (either horizontally, vertically, or are complementary).

For a party to a prospective merger to notify the Competition Commission of a prospective merger, either one of the parties to the merger situation or the parties’ combined market share must be above 30% in any market for goods and services, and the merger must lead to substantial lessening of competition.

There is no specific timeline for notification. Therefore, the Competition Commission may be notified of a prospective merger at any point in time; however, parties are encouraged to notify the Competition Commission as soon as a firm intention to enter into the proposed transaction has been formed, as there may be certain queries and the Competition Commission may take some time to provide its views on the transaction.

Having regard to the specificities of each merger situation, the Competition Commission is flexible to the information requirements depending on the nature of the merger transaction and the products/markets involved. The Competition Commission may require either:

• a complete notification/full form notification – where all information therein must be provided to the Competition Commission; or
• a short form notification, which must be pre-agreed with the Competition Commission.

The standard under which a merger or anticipated merger will be assessed is whether it has resulted in, or is likely to result in, a substantial lessening of competition (SLC).

In establishing whether an SLC has occurred, or is likely to do so, the Competition Commission will carry out a structured analysis, and will report on this analysis when giving reasons to the merging parties and in public for its decision. The assessment of competitive effects goes through four stages (not necessarily in sequence):

• market definition;
• counter-factual (what would have happened without the merger);
• assessment of entry constraints; and
• theory of harm and effects.

The Competition Commission will form an expectation using all the available relevant evidence it can reasonably obtain. Parties to the Commission’s investigation are welcome to submit evidence, but should be prepared to demonstrate the truth of any assertions they make about market conditions, in the form of evidence of actual behaviour in the market.

In the case of a prospective merger, the Competition Commission may require an enterprise to:

• desist from completion or implementation of the merger in so far as it relates to a market in Mauritius;
• divest such assets as directed within a specified period before the merger can be completed; and
• adopt or desist from such conduct, including conduct in relation to prices, as a condition of proceeding with the merger.

In the case of a completed merger, the Competition Commission may require an enterprise to divest itself of such assets and to adopt or desist from such conduct, including conduct in relation to a process as a condition of maintaining or proceeding with the merger.

The Competition Commission may, through a written direction, block or challenge FDI. See 6.3 Remedies and Commitments. The foreign investor may appeal to the Supreme Court of Mauritius against such direction within 21 days of the date of the written direction. Given that Mauritius has a voluntary notification regime, no prior approval is required before making an investment.

Mauritius welcomes foreign investment and has in place a single gateway government agency, the Economic Development Board (EDB), responsible for promoting investment in Mauritius and for facilitating certain categories of investments in the country.

Some business activities require permits and clearances from the relevant authorities, such as a building and land use permit, occupation permit and environment impact assessment (EIA) licence (among others), and these permits can be applied for through the EDB.

Subject to a few exceptions, acquiring shares in a Mauritian company holding an interest in immovable property (freehold or leasehold) requires prior approval of the Prime Minister of Mauritius.

The indicative timeline for applications to the EDB and Prime Minister’s Office is one to three months.

It is noteworthy that not all FDI needs to run through the EDB, and such FDI can be completed within a few days.

Where applicable, a review of the foreign investment is undertaken at the level of the EDB. If the licence is not granted to the proposed business activity, an appeal may be undertaken at the level of the EDB or in court.

Mauritius does not discriminate between local and foreign investment in nearly all business activities.

All FDIs through the EDB or through any Mauritius professional (lawyers, accountants, real estate agents, etc) are subject to strict anti-money laundering, counter-terrorism and proliferation-financing screening.

Customer due diligence (CDD) documents of the foreign investor would be required, and enhanced CDD would be applied where, for example, the foreign investor is or is linked to a politically exposed person (PEP).

Property rights are well protected in Mauritius. Properties may be subject to attachment orders where they are derived directly or indirectly from a crime. These measures are generally enforced in cases of fraud or in drug-related cases.

A person making an investment without the approval of the authority (where such approval is legally required) runs the risk of losing the investment. For instance, any transfer of shares in the foreign investor’s name would be considered invalid if the relevant government approval (if applicable) has not been obtained.

In terms of immovable property acquisition in Mauritius, the general rule is that a foreigner may hold immovable property, subject to the approval of the EDB or the Prime Minister of Mauritius.

Mauritius has a National Sanctions Secretariat in place, which provides support to the National Sanctions Committee in the administration of the United Nations (Financial Prohibitions, Arms Embargo and Travel Ban) Sanctions Act 2019.

There are no foreign exchange controls in Mauritius.

There are only a few business activities where the equity participation of foreigners is capped to a certain level or where special conditions apply for foreigners. These include:

• television broadcasting;
• sugar production;
• newspaper and magazine publishing;
• the construction business; and
• certain operations in the tourism sector.

Taxes Applicable to Businesses

A corporation resident in Mauritius is subject to tax on its worldwide income. A non-resident corporation is liable to tax on any Mauritius-sourced income, subject to any applicable tax treaty provisions. Corporations are liable to income tax on their net income, currently at a flat rate of 15%.

Exportation of Goods

Companies engaged in the exportation of goods are liable to be taxed at the rate of 3% on the chargeable income attributable to that export based on a prescribed formula.

Partnerships

Limited partnerships are tax-transparent and are therefore not taxable under the laws of Mauritius – unless they hold a global business licence (GBL), in which case they can elect to be taxpayers. Where a limited partnership is tax-transparent, only the partners who are residents of Mauritius are liable to pay tax in Mauritius at the rate of 15% (subject to any available tax credit or exemption). Limited partners who are non-residents of Mauritius are only liable to 15% tax on income that is derived in Mauritius, but have no tax liability on foreign-sourced income.

Trusts and Foundations

The income tax laws make a distinction between resident and non-resident trusts and between a resident foundation and a non-resident foundation.

A non-resident trust is a trust of which the settlor and the beneficiaries are not resident in Mauritius, or in the case of a purpose trust, where such purpose is carried out wholly outside Mauritius. Such trusts are not subject to taxation in Mauritius.

A foundation will be non-resident when the founder is a non-resident and all the beneficiaries appointed under the terms of a charter or a will are, throughout an income year, non-resident in Mauritius. A non-resident foundation is exempt from taxation in Mauritius. A non-resident trust or foundation has to file a declaration of “non-residency” on an annual basis with the Mauritius Revenue Authority (MRA).

Charitable trusts and foundations are also exempt from income tax in Mauritius. A non-charitable trust, a non-charitable foundation or a non-charitable institution that is tax-resident in Mauritius is taxable on its chargeable income at the rate of 15% per annum, although it will be entitled to tax credits on foreign tax paid or to a partial exemption of 80% of the Mauritian tax liability on certain specific types of income.

Companies Holding a Global Business Licence (GBL)

GBL-holding companies are taxed at the normal rate of 15%, except for an income tax exemption of 80%, which applies to:

• foreign dividends;
• foreign-sourced interest income;
• profit attributable to a permanent establishment of a resident company in a foreign company;
• foreign-sourced income derived from a collective investment scheme (CIS);
• closed-end funds;
• CIS managers;
• CIS administrators;
• investment advisers or asset managers licensed or approved by the FSC; and
• income derived by companies engaged in ship and aircraft leasing.

Corporate Withholding Taxes

There are no withholding taxes (WHTs) in Mauritius for payments made by GBL-holding companies to non-residents not carrying out any business in Mauritius. There is no WHT on dividends received from resident companies or on payments made by a company having an annual turnover of less than MUR6 million.

The following withholding tax rates are applicable to certain other income streams.

• Interest payable by any persons (other than banks or non-bank deposit-taking institutions operating under the Banking Act) to individuals and non-resident companies – 15%.
• Royalties payable to:
1. residents – 10%; and
2. non-residents – 15%.
• Rent payable to:
1. residents – 5%; and
2. non-residents – 10%.
• Payments to contractors and subcontractors – 0.75%.
• Payments to providers of services – 3%. This includes:
1. accountants/accounting firms;
2. architects;
3. attorneys/solicitors;
4. barristers;
5. dentists;
6. doctors;
7. engineers;
8. land surveyors;
9. legal consultants;
10. project managers in the construction industry;
11. quantity surveyors;
12. property valuers; and
13. tax advisers or representatives.

Available Tax Credits/Incentives

Mauritius has a credit system of taxation whereby foreign tax credit is given for any foreign-sourced income declared in Mauritius on which foreign tax of a similar character to Mauritian tax has been imposed.

No actual foreign tax credit is allowed on foreign-sourced income derived from a corporation issued with a GBL on or before 16 October 2017, if they have claimed the 80% exemption.

Tax Consolidation

There are no group taxation provisions in Mauritian tax legislation other than the transfer of losses by tax-incentive companies, sugar factory operators, subsidiaries in Rodrigues and manufacturing companies upon their takeover.

Thin Capitalisation Rules and Other Limitations

Mauritius does not have specific thin capitalisation legislation; however, it does have other anti-avoidance provisions.

If a company has issued debentures to each of its shareholders, subject to the number, the nominal value, or paid-up value of the shares in that company, any interest paid on debentures and claimed as a deductible expense may be disallowed and treated as a dividend.

There is no tax on capital gains in Mauritius. However, certain transactions are taxed as ordinary business profit instead of capital gains. Where a transaction is in the nature of trade, the MRA may take the view that it is an ordinary trading transaction and assess the gains derived as income.

Gains realised from the sale of any property or interest in property acquired in the course of a business, as part of a profit-making undertaking or scheme, are taxable as ordinary income.

There are no controlled foreign company rules under Mauritian tax legislation, and Mauritius does not have any specific transfer pricing legislation. However, there is an arm’s length provision requiring transactions between related parties to reflect a commercially objective value, which would be the amount charged for the services were the parties not connected.

In Mauritius, the employment relationships are governed by legislation, case law, employment agreements and collective agreements within specific industries. The Workers’ Rights Act 2019 (the “Act”) and the Employment Relations Act 2008 (ERA) are the main governing laws.

The Act specifically oversees the employment relationships between workers and employers in Mauritius. A worker, as defined by the Act, refers to someone whose monthly basic salary is MUR50,000 or less.

Employers must provide every worker engaged for more than one month with a written statement of particulars within 14 days of completing the first calendar month. The Act specifies crucial details to be included in employment contracts, encompassing:

• the employer’s information;
• the worker’s details;
• the agreement’s commencement date;
• place of work;
• employment category;
• remuneration details;
• payment intervals; and
• regular working hours.

Working Hours

In Mauritius, employment contracts may be for a determinate or indeterminate duration. Normal working hours constitute a 45-hour week for most workers, with variations for those working five or six days. Flexibility in working arrangements is possible with mutual consent, allowing for a four-day work week.

Termination of Employment Contracts

For fixed-term contracts, termination occurs on the last day of the agreement. Employers can terminate contracts due to poor performance or misconduct, providing the employee an opportunity to respond within the statutory timeline. Employees may terminate agreements owing to:

• ill treatment;
• non-payment of remuneration;
• failure to provide work; or
• resignation under duress.

Redundancies

The Act also makes provision for collective redundancies and employee representations during workforce reduction or enterprise closures. Employers intending to reduce the workforce or close down businesses must engage in negotiations with trade unions or workers’ representatives. Various measures, such as restrictions on recruitment and alternative employment options, are suggested to avoid layoffs.

The Redundancy Board (the “Board”) is established to handle cases where no agreement is reached, with the authority to order reinstatement, severance allowances or other actions based on the circumstances. The Board, consisting of various representatives, plays a crucial role in making orders related to collective redundancies and closures. It may also provide conciliation or mediation services to promote settlements, exploring options such as reinstatement, training or compensation. The Board’s decisions are enforceable, and the entire process, from notification to the completion of Board proceedings, is subject to specified timelines, which can be extended by mutual agreement.

Collective bargaining and labour union arrangements are prevalent in Mauritius as the employee’s constitutional right to representation at the trade union level is recognised. Union representatives play a crucial role in negotiating employees’ rights both at the level of the company and with the government. They are entitled to represent employees in labour disputes with the employer at the level of the company, and regularly assist employees in disciplinary committees. They are important stakeholders in the negotiations of the yearly salary compensations.

In addition to the above, foreign investors have to apply for an OP (a combined work and residence permit which allows foreign nationals to work and reside in Mauritius) under the following four options:

• option 1 – normal;
• option 2 – net asset value;
• option 3 – high technology machines and equipment; and
• option 4 – investor for innovative start-ups with no initial investment.

Furthermore, an OP under the investor category is granted for a maximum period of ten years, with the possibility of renewal based on established criteria.

In Mauritius, employee compensation encompasses various components, including the following.

Minimum Wage

The national minimum wage payable to a worker is as follows:

• for a worker employed in an export enterprise, other than a part-time worker – national minimum wage per month of MUR10,875; and
• for any other worker, other than a part-time worker – national minimum wage per month of MUR11,575.

As of January 2024, the minimum remuneration for a full-time worker is set to increase to MUR15,000.

End-of-Year Bonus

Employees who remain in continuous employment with the same employer throughout the year are entitled to an end-of-year bonus. This bonus is calculated as one twelfth of the employee’s annual earnings and is paid in two instalments – 75% before 25th December and the remaining balance by the last working day of the year.

For employees earning a monthly basic salary exceeding MUR100,000, the end-of-year bonus is governed by the End of Year Gratuity Act 2001. This Act stipulates that the bonus be based on one twelfth of the December basic salary multiplied by the number of months of continuous employment in that year.

Government Compensation

The government intervenes to adjust remuneration and allowances, considering factors such as inflation and the cost of living. The specific rates for these adjustments may vary from year to year.

Pensions

All employers must contribute to the retirement pension of their employees. They may do so through a private pension plan approved by the FSC or pay into the Portable Retirement Gratuity Fund (PRGF) set up under the Act. Employers are required to pay PRGF contributions at the rate of 4.5% of the monthly remuneration of each worker. However, small and medium enterprises (SMEs) will pay PRGF at a lower rate for the first three years, the difference being met by the government from a seed capital earmarked for that purpose. The PRGF rate, applicable on monthly remuneration, is based on the annual turnover of the SME.

In the context of acquisitions, change of control, or other investment transactions in Mauritius, employee compensation is commonly addressed through a thorough review of existing employment contracts. The investor will then decide whether to maintain all the employees in their position with their acquired rights and years of service, or agree with the former owner on a termination of all contracts or some of the contracts, with the payment of all the termination compensations by the owner prior to the acquisition, change of control or investment, so that the employees who remain post-transaction will be under a new contract of employment.

In Mauritius, employees maintain all their rights and conditions of work upon an acquisition, change of control or other investment transaction unless a termination of their initial contract of employment has occurred (see previously in 10. Employment and Labour). Any unilateral modification of their contracts can be construed as a breach of contract and warrant compensation by the employer. The consent of the employee is crucial if there is to be any amendment to their contract of employment.

In general, there is no collective bargaining requirement to be met to complete an acquisition or investment transaction, unless there is a collective agreement in place which provides for this.

Intellectual property (IP) tends to be quite secondary in screening FDI in Mauritius.

Mauritius has established a comprehensive legal framework for IP protection, governed by key legislation such as:

-the Industrial Property Act 2019;

-the Industrial Property Regulations 2022; and

-the Copyright Act 2014.

The Industrial Property Office (IPO) oversees the registration of various IP rights, including marks, patents, utility models and designs.

Trade mark registration is quite straightforward. However, foreign applicants must engage local representatives, conduct searches and adhere to specific documentary requirements. The registration process takes approximately three months, including a two-week examination period. Renewal is required every ten years.

Patents in Mauritius require novelty, inventive step and industrial applicability. The application process involves filing at the IPO, public inspection and potential opposition. Patents expire after 20 years, with annual fees payable. Restoration is possible within a grace period.

Industrial designs are protected for five years, renewable for three five-year periods. Similar to patents, renewal may occur within a grace period.

Other IP rights, such as certification marks, layout-designs, protection of new plant varieties, and geographical indications, are also covered under the Industrial Property Act.

Mauritius is a party to international treaties such as the Patent Cooperation Treaty, the Madrid Protocol and the Hague Agreement, facilitating global IP protection.

Criminal actions, with fines and imprisonment, are provided for in the Industrial Property Act 2019 and the Protection Against Unfair Practices (Industrial Property Rights) Act 2002. The Industrial Property Tribunal has been set up to handle disputes on IP and, if needed, appeals may be made to the Supreme Court and the Judicial Committee of the Privy Council in the UK. It is also possible to obtain damages and other remedial action before the civil courts.

Mauritius has a comprehensive legal framework for data protection, primarily governed by the Data Protection Act 2017 (DPA), which is aligned with the EU’s General Data Protection Regulation (GDPR). The DPA emphasises the protection of personal data and grants data subjects explicit rights, including the right to access, correct inaccuracies and request deletion of their data.

The Cybersecurity and Cybercrime Act 2021 complements data protection efforts by defining cybersecurity and addressing potential privacy breaches resulting from cyber-attacks.

Regarding extraterritorial scope, the DPA allows the transfer of personal data outside Mauritius under specific conditions. These conditions include:

• providing proof of appropriate safeguards;
• obtaining explicit consent from the data subject; or
• meeting certain legal criteria related to contracts, public interest, legal claims, vital interests or compelling legitimate interests.

The legislation acknowledges the role of public registers but limits the transfer of data from such registers to specific circumstances. Public authorities engaged in their functions are subject to specific rules, and the Commissioner has the authority to request proof of safeguards and may intervene to protect data subjects’ rights and freedoms.

Violating the DPA

Anyone found guilty of violating the DPA, in cases where no explicit penalty is outlined or who otherwise goes against the provisions of the Act, may, upon conviction, face a fine of up to MUR200,000 and imprisonment for a maximum of five years.

Furthermore, the court has the authority to:

• order the forfeiture of any equipment or any article used or connected in any way with the commission of an offence; and
• order or prohibit the doing of any act to stop a continuing contravention.