Type of Legal System

Mauritius has a “hybrid” or “mixed” legal system, inherited from its former colonial masters, the French and the British. The Constitution of Mauritius is based on the Westminster model, while substantive law (civil rights, property law, contract law) is French-derived, and procedural law is 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 trademarks or passing off;
• disputes between traders and related matters; and
• in general, anything that is of a commercial nature.

The Intermediate Court

Following legislative amendments, the Intermediate Court has jurisdiction over all civil cases in which the claim or matter in dispute ranges from MUR250,000 to 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

For businesses operating in Mauritius, the most commonly used legal structures 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), 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 composed of different “cells” that are segregated from each other.

Trusts

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

Sociétés

The Commercial Code and the Civil Code govern sociétés. The life of a société is limited to a maximum of 99 years.

Regulatory Bodies

• The Registrar of Companies of Mauritius (ROC) administers:
1. the Companies Act 2001;
2. the Business Registration Act 2002;
3. the Insolvency Act 2009;
4. the Limited Partnerships Act 2011; and
5. 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 requesting, receiving, analysing and disseminating 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 recent developments have been identified, and no trends are currently emerging.

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

Other structures include asset purchase and the amalgamation of two or more companies into one of the amalgamating companies, a new company, or a takeover offer in which 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 must be addressed prior to the acquisition.

Where the transaction does not involve immovable property, the more straightforward structure is share acquisition.

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

As noted in 3.1 Transaction Structures, prior authorisation from the Prime Minister’s Office is required if the target company owns immovable property or if the acquisition involves assets that include immovable property. Additionally, registration duty must be paid to the Registrar-General.

The foreign investor must provide full know-your-customer (KYC) information in accordance with Mauritius’s anti-money laundering legislation.

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

Although the Mauritian government encourages foreign investment, some restrictions apply to the acquisition of immovable property (for example, 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 a company’s liquidation that is limited by shares, the liability of shareholders is confined to any amount that remains unpaid on their shares.

A company with 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”): sets out how a company in Mauritius is incorporated and managed. The Companies Act gives shareholders a degree of flexibility to provide for management that suits their specific needs in certain aspects.

The Securities Act 2005: it, inter alia, regulates the disclosure of information by persons issuing securities to the public.

The Insolvency Act 2009: 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 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 must be provided on the nature of the business and the ownership and control structure, including any individuals exercising control over the structure. This would include the identity of the natural persons with a controlling ownership interest in a legal person. While the law does not set a specific threshold for controlling ownership, a 20% stake is generally regarded as the standard benchmark.

In other circumstances, the individuals exercising control or the identity of the 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 Financial Action Task Force's guidance notes on transparency and beneficial ownership have been enshrined in 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 at the governmental authorities’ level.

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 profiles, and growth plans.

Capital markets can be defined as markets where individuals and institutions buy/sell financial securities, such as 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), allowing them to raise public investors’ funds.

Equity Financing

IPOs on the SEM

Companies seeking equity financing can go public by listing on the SEM, thereby attracting 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. It 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 2005 (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 disclose material information to the public in a timely and accurate manner.

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 investors' interests and ensure 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 investments (including foreign investment funds) may be subject to regulatory review to confirm compliance with all relevant laws and regulations. Key criteria considered during 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 that publicly offer interests to foreign investors (including investment funds) are required to comply with specific public offer securities requirements set out in the Securities Act 2005.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 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 for merging enterprises to notify the Competition Commission of a potential merger before or after its execution.

Merger parties may notify the Competition Commission of the merger situation and seek guidance on whether the proposed merger 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 in which the merger is likely to result in a substantial lessening of competition in any market in Mauritius, including directions to block the merger or to require the divestment of assets. For this purpose, a merger situation is defined as the consolidation of two or more enterprises under common ownership and control, where at least one operates in Mauritius or through a Mauritian-incorporated company.

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 in a given market;
• one or all of the merging enterprises have 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 complementary).

A party to a prospective merger must notify the Competition Commission if either one party or the combined parties hold more than 30% market share in any market for goods or services, and the merger is likely to result in a 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.

With regard to the specificities of each merger situation, the Competition Commission is flexible with its 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 (all information therein must be provided to the Competition Commission); or
• a short form notification (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 determining whether an SLC has occurred or is likely to occur, the Competition Commission will conduct a structured analysis and report it, giving reasons to the merging parties and in public, in 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 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 insofar as it concerns 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 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). A foreign investor may appeal to the Supreme Court of Mauritius against a written direction within 21 days of its issuance. Similarly, the Executive Director has the right to appeal to the Supreme Court within 21 days if dissatisfied with an order or direction from the Commission, provided it concerns a restrictive business practice they investigated or initiated. 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), which is responsible for promoting investment in Mauritius and facilitating certain categories of investments in the country.

Some business activities require permits and clearances from relevant authorities, such as a building and land use permit, an occupation permit, and an environmental impact assessment (EIA) licence (among others). 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 the 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, the foreign investment is reviewed at the EDB level. If the licence is not granted for the proposed business activity, an appeal may be made to the EDB or to the court.

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

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

The foreign investor’s customer due diligence (CDD) documents would be required, and enhanced CDD would apply 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 fraud or 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 Mauritius, the general rule is that a foreigner may acquire 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 in which the equity participation of foreigners is capped (to a certain level) or where special conditions apply to foreigners. These include:

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

Resident individuals are subject to Mauritian income tax on their worldwide income from all sources, except that income derived from outside Mauritius is taxable only to the extent that it is remitted in Mauritius.

Income from employment duties performed in Mauritius is deemed to have been derived from Mauritius.

A non-resident is taxable on income derived from Mauritius; for instance, income derived from any business carried on wholly or partly in Mauritius.

Employees

Currently, individuals’ incomes are taxed incrementally; ie, the chargeable incomes are divided into different revenue brackets.

Each bracket has a specific tax rate starting at 0% and is capped at a maximum of 20%.

The income tax rates and bands have been revised. The revised progressive tax bands are as follows: 0% on the first Rs 500,000 of chargeable income, 10% on the next MUR500,000, and 20% on the remaining income.

An individual (employed or self-employed) has to file income tax returns for the preceding income year, declaring their income and deductions to the Mauritius Revenue Authority (MRA).

Employers are required to operate a cumulative system of pay as you earn (PAYE), whereby tax withheld from emoluments made available to an employee must be remitted to the MRA within 20 days.

If tax is underpaid under the PAYE system, the unpaid balance becomes payable on or before 30 September following the end of the income year. If tax is overpaid, a refund of the excess tax is made to the taxpayer.

Every month, every employer shall pay the amount of contribution to the MRA in respect of every employee who was employed during the preceding month.

Currently, the CSG and National Solidarity Fund (NSF) contributions are payable at the prescribed rate on an employee’s basic wage/salary.

An employer is required to contribute 2.5% of remuneration to the NSF and to pay a monthly rate of 1.5% of each employee's basic salary.

Under the CSG:

• employees earning MUR50,000 or less monthly will be subject to a contribution of 1.5%, and 3% for the employers;
• employees earning more than MUR50,000 monthly will be subject to a contribution of 3%, and 6% for the employers;
• a public sector employee earning MUR50,000 or less monthly will not be subject to the contribution, and 4.5% for the employers;
• a public sector employee earning more than MUR50,000 monthly will not be subject to the contribution, and 9% for the employers; and
• an employee who is in domestic service earning MUR3,000 or less monthly, from one or more employers, shall not be subject to the contribution, and 3% for the employers.

Fair Share Contribution

An additional 15% tax has been imposed on individuals whose annual income (including dividends) exceeds Rs 12 million.

Taxes Applicable to Businesses

A resident company is chargeable to tax in respect of its worldwide income, whether its foreign source income is remitted or not to Mauritius. 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.

The benefit of the reduced income tax rate of 3% has been extended to freeport operators and private freeport developers engaged in the retreading of used tyres and the recycling of waste intended for the local market.

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. In a tax-transparent limited partnership, only the partners who are residents of Mauritius are required to pay tax in Mauritius at a rate of 15%, subject to any applicable tax credits or exemptions. Non-resident limited partners are only liable for 15% tax on income earned in Mauritius and have no tax obligations on income sourced from a foreign country.

Trusts and Foundations

Income tax laws distinguish between resident and non-resident trusts and between resident foundations and non-resident foundations.

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 considered non-resident if the founder is a non-resident and all the beneficiaries specified in the charter or will are non-residents of Mauritius for the entire income year. Non-resident foundations are exempt from taxation in Mauritius. Additionally, non-resident trusts or foundations must submit an annual declaration of “non-residency” to the Mauritius Revenue Authority (MRA).

Charitable trusts and foundations in Mauritius are exempt from income tax. In contrast, a non-charitable trust, non-charitable foundation, or non-charitable institution that is considered tax-resident in Mauritius is subject to a tax rate of 15% per annum on its chargeable income. However, these entities may qualify for tax credits on foreign taxes paid or receive a partial exemption of 80% on certain specific types of Mauritian tax liabilities.

Société

Resident société

A resident société is not liable to tax. Instead, every associate of the société is liable to tax on his/her share of income, whether distributed or not.

Non-resident société

A non-resident shall be liable to income tax as if the société were a company and shall pay income tax on its chargeable income at a rate of 15%.

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 from companies engaged in ship and aircraft leasing.

Corporate Social Responsibility (CSR)

Every year, a company must set up a CSR fund equal to 2% of its chargeable income for the preceding year.

Value-Added Tax (VAT)

VAT shall be charged at the standard rate of 15% on all taxable goods and services, except certain food items that are zero-rated.

A person who makes taxable supplies in the course of their business and whose annual turnover exceeds or is likely to exceed MUR3 million is required to register for VAT on a compulsory basis.

Additionally, certain service providers (eg, accountants and auditors, attorneys and solicitors, consultants, surveyors, valuers) must be VAT-registered irrespective of their turnover.

A person may also be subject to a reverse charge of VAT with respect to the supply of services in Mauritius. A reverse mechanism where the local recipient of a service, rather than the foreign supplier, is responsible for reporting and paying VAT. This ensures VAT is collected on services imported from abroad, especially when the foreign supplier is not registered for VAT locally.

The reverse charge provision on the supply of services received from abroad applies only if:

• the taxable supply performed or utilised in Mauritius is made by a person who does not belong in Mauritius and is not VAT registered; and
• the recipient of the supply is a VAT-registered person.

Where a VAT-registered person is engaged in a project spanning several years and the MRA is of the opinion that the apportionment of input tax between taxable supplies and exempt supplies on a prorated basis is not appropriate, it may require the registered person to apply an alternative basis of apportionment for input tax.

Local Income Taxes

Local income taxes levied by a local administration, such as urban councils, do not exist in Mauritius.

Corporate Withholding Taxes

There are no withholding taxes (WHTs) in Mauritius on payments made by GBL companies to non-residents who do not carry 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 (i) residents – 10%, and (ii) non-residents – 15%;
• rent payable to (i) residents – 5%, and (ii) non-residents – 10%;
• payments to contractors and subcontractors – 0.75%; and
• payments to providers of services (accountant/accounting firm, architect, attorney/solicitor, barrister, dentist, doctor, engineer, land surveyor, legal consultant, project manager in the construction industry, quantity surveyor, property valuer, and tax adviser or representative) – 3%.

Transfer Pricing

Mauritius does not have any specific transfer pricing legislation. However, it does contain 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.

Anti-Evasion Rules

There are no controlled foreign companies rules under Mauritian tax legislation.

Additionally, the Income Tax Act 1995 provides for certain measures relating to anti-avoidance provisions in relation to interest on debentures issued by reference to shares, excess of remuneration or share of profits, excessive remuneration to shareholders or directors, benefits to shareholders and excessive management expenses.

Corporate Withholding Taxes

There are no withholding taxes (WHTs) in Mauritius on payments made by GBL-holding companies to non-residents who do not carry 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 service providers – 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 a 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

Mauritian tax legislation has no group taxation provisions 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.

Mauritius does not impose a tax on capital gains. However, some transactions may be taxed as ordinary business profits rather than capital gains. Where a transaction is in the nature of trade, the MRA may view it as 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 has no specific transfer pricing legislation. However, an arm’s-length provision requires transactions between related parties to reflect a commercially objective value, which would be the amount charged for the services if the parties were not connected.

In Mauritius, 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 and defines a “worker” as 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 for poor performance or misconduct, giving the employee an opportunity to respond within the statutory timeline. Employees may claim that their agreement has been terminated by their employer for these reasons:

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

Redundancies

The Act also provides for collective redundancies and employee representation during workforce reductions 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 common in Mauritius, as the Constitution recognises employees’ right to representation at the trade union level. Union representatives play a vital role in negotiating employees’ rights, both within companies and with the government. They have the authority to represent employees in labour disputes with employers and frequently assist in disciplinary committees. Additionally, they are significant stakeholders in negotiating annual salary compensation.

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 options:

• option 1: initial investment of USD50,000;
• option 2: initial investment of USD100,000; and
• option 3: innovative start-ups.

Professional and young professionals may also apply for an occupation permit, subject to meeting the requirements.

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

Minimum Wage

The national minimum wage payable to a worker is for all workers (except part-time workers), including those employed in an export enterprise, a national monthly minimum wage of MUR17,110.

The national minimum wage for a worker of an export enterprise shall include any housing allowance, food allowance, and any fixed monthly remuneration in cash guaranteed for work performed during normal scheduled working hours and not reduced for authorised absences. It shall not include any variable pay component.

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% not later than 5 clear working days before 25 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 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 their employees' retirement pensions. 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 each worker’s monthly remuneration.

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 the 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 retain all their rights and conditions of work upon an acquisition, change of control, or other investment transaction, unless 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 employee’s consent is crucial if there is to be any amendment to their employment contract.

As a rule, collective bargaining is not required for the completion of an acquisition or investment transaction unless an existing collective agreement specifically requires it.

Intellectual property (IP) tends to be 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 steps, and industrial applicability. The application process involves filing at the IPO, public inspection, and potential opposition. Patents expire after 20 years, and annual fees are payable. Restoration is possible within a grace period.

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

The Industrial Property Act also covers other IP rights, such as certification marks, layout designs, protection of new plant varieties, and geographical indications.

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 IP disputes, and if needed, appeals may be made to the Supreme Court and the Judicial Committee of the Privy Council in the UK. Obtaining damages and other remedial action before the civil courts is also possible.

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 arising 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 committed offence; and
• order or prohibit the doing of any act to stop a continuing contravention.