How to start business in Mauritius

Considered part of Africa geographically, Mauritius has friendly relations with other African states in the region, particularly South Africa, by far its largest continental trading partner. Mauritius has excelled in positioning itself as the entry point into India and Africa and has succeeded in drawing significant investment by companies setting up regional headquarters.

Mauritius has a sophisticated, transparent and well-regulated International Financial Centre (IFC).  Mauritius is a worldwide reference for political stability and has recently been ranked as the top African country in the Doing Business Report by the World Bank.  Mauritius has one of the fastest-growing economies in Africa, backed by social and political stability. Successive governments have continued to show a commitment to a market-driven economy and encourage foreign investments.

With a population of 1.3 million, Mauritius has an estimated GDP growth rate of 3.8%, boasting a growing economy across different sectors including tourism, manufacturing, financial services and agriculture, with new sectors emerging such as healthcare and renewable energies.

The Financial Services Commission (FSC) is the regulator of the non-bank financial and global business markets in Mauritius which comprises Securities Exchanges, clearing and settlement facilities and securities trading systems on the one hand and Collective Investment Schemes and intermediaries on the other.

In line with international best practice, the law provides modern vehicle for domestic and international investors to invest in and from Mauritius.  Companies can be incorporated or registered under the Mauritius Companies Act 2001 and can be either private or public.

Fintech

Other investment opportunities in the Mauritian financial services sector are available in banking, global business, global funds, trusts, insurance, capital markets and other financial services including accounting and international law firms.

The Government has put in place a National Regulatory Sandbox Licence to promote the growth of Fintech.  It offers the possibility for investors to conduct a business activity for which there is exists no legal framework.

Among several innovation incentives for fintech in Mauritius, a noteworthy incentive is the eightyear tax holiday for innovation-driven activities on income derived by a company from IP assets developed in Mauritius.

Mauritius Tax regime

A corporation resident in Mauritius is subject to tax on its worldwide income. A non-resident corporation is liable to tax on any Mauritius-source 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%. Companies engaged in the export of goods are liable to be taxed at the rate of 3% on the chargeable income attributable to exports based on a prescribed formula.

Global Business Licence (GBL) companies will be liable to tax at the rate of 15%.

Companies (including GBL companies) will qualify for a partial exemption of 80% in relation to certain specified foreign-source income (e.g. foreign dividend derived by the company, interest income, foreign-source income derived by a Collective Investment Scheme (CIS), closed end funds, CIS manager, CIS administrator, investment adviser or asset manager licensed or approved by the FSC, income derived by companies engaged in ship/aircraft leasing, income derived from the leasing and provision of international fibre capacity, interest income derived by a person from money lent through a peer-to-peer lending platform operated under a licence issued by the relevant authority after the five-year tax holiday, income derived from reinsurance and reinsurance brokering activities, income derived from the sale, financing arrangement, and asset management of aircraft and its spare parts, including aviation-related advisory services).

Partial exemption is available to a company subject to the following conditions:

• it must carry out its core income generating activities in Mauritius;
• it must employ directly or indirectly, an adequate number of suitable persons to conduct its core income generating activities; and
• it must incur a minimum expenditure proportionate to its level of activities.

Corporate Social Responsibility

Every year, a company has to set up a CSR Fund equivalent to 2% of its chargeable income of the preceding year.

Tax incentives

• 8-year income tax holiday to newly set up freeport operator or developer making an investment of at least MUR 50 million and complies with OECD substance requirements;
• Increase of additional deduction from 10% to 25% to large manufacturer (annual turnover exceeds MUR100 million), on the amount incurred to purchase locally manufactured products from a small enterprise;
• 8-year tax holiday to innovative agricultural practices under the Integrated Modern Agricultural Morcellement Scheme and planters registered with Economic Development Board;
• Accelerated annual allowance on expenditure on green technology equipment will be allowed to Property Developers to develop areas close to metro stations under the Transit Oriented Scheme.
• Work and Resident Permits – Holders of the Global Headquarters Administration licence will be provided with work and residence permits for five executives and their dependents.
• Premium Visa – Foreign employers of Premium Visa holders will not be subject to corporate tax and social contributions in Mauritius in respect of an employee.

Personal Income Tax

When it comes to personal income taxation in Mauritius, Residency status does not matter. This implies that irrespective of the nationality of the individual, personal income tax is charged on income that has been derived or earned within Mauritius.

Resident individuals in Mauritius, however, are subject to their worldwide income for personal income taxation only if the income sourced internationally has been received within Mauritius.

Income that is earned from employment duties that are executed in Mauritius is considered to be derived from within Mauritius. This is regardless of the remuneration being received outside of Mauritius.

Tax Band Rate for the FY 30 June 2023 is as follows: