Mauritius is an island nation with a population of 1.3 million people. The Government of Mauritius (GoM) claims an Exclusive Economic Zone (EEZ) of approximately 2.3 million square kilometers. Mauritius has a stable and competitive economy, with a gross domestic product (GDP) of USD 14.22 billion (2018) and per capita gross national income (GNI) of USD 12,050 in 2018. According to the International Monetary Fund, real GDP growth for 2019 is estimated at 4 percent and projected to fall to negative 6.8 percent in 2020 due to the Covid-19 effect on the global economy. The inflation rate decreased from 3.2 percent in 2018 to 0.5 per cent in 2019. The unemployment rate decreased from 6.9 percent in 2018 to 6.7 percent at the end of 2019. According to the World Bank’s 2020 Ease of Doing Business Index, Mauritius ranks first in Africa and 13th worldwide, out of 190 countries.
Since achieving independence in 1968, Mauritius has made a remarkable economic transformation from a mono-crop economy (sugarcane) to a diversified economy driven by export-oriented manufacturing (mainly textiles), tourism, financial and business services, information and communication technology, seafood processing, real estate, and education/training. Before Covid-19, authorities planned to stimulate economic growth in five areas: Serving as a gateway for investment into Africa, increasing the use of renewable energy, developing smart cities, growing the blue economy, and modernizing infrastructure, especially public transportation, the port, and the airport. But 2020 will, like most countries, focus on rebuilding existing sectors whose customers disappeared due to the pandemic. Economists predicted that tourism and manufactured exports would be the hardest hit sectors.
Government policy in Mauritius seeks to promote trade and investment. The GoM has signed Double Taxation Avoidance Agreements with 46 countries and jurisdictions and maintains a legal and regulatory framework that keeps Mauritius highly ranked on “Ease of Doing Business” and good governance indices. In recent years, Mauritius has been especially intent on attracting foreign direct investment from emerging economies like China and India, as well as courting more traditional markets like the United Kingdom, France and the United States. The GoM, which is currently finalizing bilateral trade agreements with both India and China, promotes Mauritius as a safe, secure place to do business due to its favorable investment climate and tradition as a stable democracy. Corruption in Mauritius is low by regional standards but there remains room for improvement improve in terms of transparency and accountability. A recent commercial dispute between a U.S. investor and a parastatal partner that has turned into a criminal investigation, for instance, has raised questions of governmental impartiality.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Mauritius actively seeks foreign investment. The Investment Office (formerly the Board of Investment) of the Economic Development Board (EDB) is the single-gateway government agency responsible for promoting investment in Mauritius, and for helping guide investors through the country’s legal and regulatory requirements.
According to a number of surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. The 2020 Index of Economic Freedom, published by the Heritage Foundation, ranks Mauritius first in the Sub-Saharan Africa region among 43 countries and 21st globally. For the 12th consecutive year, the World Bank’s 2020 Doing Business report ranked Mauritius first among African economies, and 13th worldwide, in terms of overall ease of doing business.
There is no formal ongoing dialogue with investors. However, one-to-one meetings are usually held with investors while the government prepares its annual budget.
Limits on Foreign Control and Right to Private Ownership and Establishment
A non-citizen can hold, purchase, or acquire real property under the Non-Citizens (Property Restriction) Act, or NCPRA, subject to government approval. A foreigner can acquire residential property and apartments under the government-regulated Property Development Scheme (PDS) http://www.edbmauritius.org/schemes/property-development-scheme. The NCPRA was amended in December 2016 to allow foreigners to purchase certain types of properties, as long as the amount paid is over six million Mauritian rupees (approximately USD 172,000). A non-citizen is eligible for a residence permit upon the purchase of a house under the PDS if the investment made is more than USD 500,000. More information is available at http://dha.pmo.govmu.org/English/Mandate/Pages/Non-Citizens-Property-Restriction.aspx.
Regarding business activities, the GoM generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper or magazine publishing, and certain operations in the tourism sector.
In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Similarly, control by foreign nationals in broadcasting was limited to 49.9 percent. Furthermore, a foreign investor cannot hold 20 percent or more of a company that owns or controls any newspaper or magazine, or any printing press publishing such publications. The IBA Act can be accessed via http://www.iba.mu/legal.htm.
In the construction sector, foreign consultants or contractors are required to register with the Construction Industry Development Board (CIDB). Details on registration procedures are available at https://www.cidb.mu/registration/contractors.
The Investment Office of the EDB screens foreign investment proposals and provides a range of services to potential investors. The EDB is a useful resource for investors exploring business opportunities in Mauritius and provides assistance with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2019, U.S. Embassy Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms.
The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. EDB then advises the potential investor on specific permits or licenses required, depending on the nature of the business. Foreign investors can also apply through the EDB for necessary permits. In the event an investment fails review, the prospective investor may appeal the decision within the EDB or to the relevant government ministry.
Other Investment Policy Reviews
Mauritius’ most recent third-party investment policy reviews through multilateral organizations were completed in 2014. In June 2014, the GoM conducted an investment policy review with the Organization for Economic Cooperation and Development (OECD). The review can be accessed via http://www.oecd.org/daf/inv/investment-policy/mauritius-investment-policy.htm. The review concluded that, while policies and legislation in Mauritius support private sector development, incentive schemes tend to bias investment towards real estate and property development. In October 2014, the GoM also conducted a trade policy review with the World Trade Organization (WTO), which can be accessed at https://www.wto.org/english/tratop_e/tpr_e/tp404_e.htm. A new trade policy review was expected to start in May 2020.
The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures. The act can be accessed at https://www.edbmauritius.org/resources/legislations.
The incorporation of companies and registration of business activities falls under the provisions of The Companies Act of 2001 and The Business Registration Act of 2002. All businesses must register with the Registrar of Companies. As a general rule, a company incorporated in Mauritius can be 100 percent foreign-owned with no minimum capital. According to the World Bank 2020 Doing Business report, while the procedures for registering a company takes less than a day, actually starting a business takes between four and five days.
After the Registrar of Companies issues a certificate of incorporation, foreign-owned companies must register their business activities with the EDB. The company can then apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign.
In partnership with the Corporate and Business Registration Department (a division of the Ministry of Finance and Economic Development), the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System, a web-based portal that allows electronic submission for incorporation of companies and application for the Business Registration Number, file statutory returns, pay yearly fees, register businesses, and search for business information. Applicants can register with MNS at https://portalmns.mu/cbris. In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS is a single point of entry for the processing of permits and licenses needed to start and operate a business. It can be accessed at https://business.edbmauritius.org.
The GoM imposes no restrictions on capital outflows. Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses. As part of its Africa Strategy, the government has established the Mauritius Africa Fund: a public company with USD 13.8 million capitalization to support Mauritian investment in Africa. Through the Fund, the government participates as an equity partner up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa. The government has signed agreements with Senegal, Madagascar, and Ghana establishing and managing Special Economic Zones (SEZ) in these countries and has invited local and international firms to set up operations in the SEZs. As per the 2018 Finance Act, Mauritian companies collaborating with the Mauritius-Africa Fund for development of infrastructure in the SEZs benefit from a five-year tax holiday. To further facilitate investment, Mauritius has also signed Investment Promotion and Protection Agreements and Double Taxation Avoidance Agreements with African states.
Since 2012, the Board of Investment (now restructured as the Investment Office of the EDB) has been operating an Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa. It acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa.
In 2018, the most recent year for which the Central Bank of Mauritius has published data, gross direct investment flows abroad (excluding the global business sector) amounted to USD 106 million. The top three sectors for outward investment were manufacturing (38 percent), finance and insurance activities (30 percent), and accommodation and food service activities (10 percent). Investment abroad was mainly geared toward developing countries, and Africa was the biggest recipient region of foreign direct investment, amounting to USD 44 million. Kenya was the top recipient country with USD 31 million. Data on outward investment can be obtained at https://www.bom.mu/publications-and-statistics/statistics/external-sector-statistics/direct-investment-flows.
2. Bilateral Investment and Taxation Treaties
In 2006, Mauritius and the United States signed a Trade and Investment Framework Agreement (TIFA) aimed at strengthening and expanding trade and investment ties between the two countries. The United States has not signed a bilateral investment treaty or a free trade agreement with Mauritius. Mauritius benefits from duty free and quota-free access to the United States on approximately 6500 tariff lines through the African Growth and Opportunity Act (AGOA). This trade preference is valid until 2025 unless Mauritius graduates out of AGOA before then by moving up to high-income country status as defined by the World Bank.
Mauritius has been a member of the World Trade Organization since 1995 and has signed trade agreements with several regional blocs and countries. These include the Common Market for Southern and Eastern Africa Free Trade Area (COMESA), the Indian Ocean Commission (IOC – only Madagascar offers trade preferences under the IOC), the interim Economic Partnership Agreement (iEPA) with the European Union (EU), the Southern African Development Community Free Trade Area (SADC), a free trade agreement with Turkey, and a preferential trade agreement with Pakistan.
The Mauritian government and the People’s Republic of China completed negotiations for a free trade agreement in September 2018. The agreement has been signed by both countries, but will not go into effect until ratified. Mauritius also signed an agreement with the UK in January 2019 to safeguard trade preferences it currently enjoys under the iEPA with the European Union. The new agreement, known as the UK-ESA EPA, is expected to enter into force on January 1, 2021. Negotiations for a preferential trade agreement with Indonesia and a Comprehensive Economic Partnership Agreement (CECPA) with India are ongoing. Furthermore, Mauritius and four other countries in the COMESA region launched negotiations to broaden their iEPA in October 2019. The negotiations included trade in services, investment, competition policy, agriculture, intellectual property, sustainable development and development cooperation, among others.
As of April 2020, Mauritius has signed Investment Promotion and Protection Agreements (IPPA) with 43 countries. The following 27 IPPAs have been ratified and are in force: Barbados, Belgium/Luxembourg Economic Union, Burundi, China, Czech Republic, Egypt, Finland, France, Germany, India, Indonesia, Kuwait, Madagascar, Mozambique, Pakistan, Portugal, Republic of Congo, Romania, Senegal, Singapore, South Africa, South Korea, Sweden, Switzerland, Tanzania, Turkey, UK, and Zambia. The following 16 IPPAs have been signed, but await ratification: Benin, Cameroon, Chad, Comoros, Cote D’Ivoire, Gabon, Ghana, Guinea, Kenya, Mauritania, Nepal, Rwanda, Swaziland, Sao Tome and Principe, United Arab Emirates, and Zimbabwe. Mauritius and France signed a re-negotiated IPPA in 2010, but it has not yet been ratified. Updated information on IPPAs can be accessed via http://www.edbmauritius.org/resources/bilateral-agreements.
In 2013, Mauritius signed a Tax Information Exchange Agreement (TIEA) and an Inter-Governmental Agreement (IGA) with the United States to implement the Foreign Account Tax Compliance Act (FATCA). Procedures for FATCA reporting can be accessed via http://www.mra.mu/index.php/e-services/fatca.
Mauritius has also signed TIEAs with Australia, Austria, Denmark, Faroe Island, Finland, Greenland, Guernsey, Iceland, Korea and Norway. TIEAs with Argentina, Greece, and Isle of Man await signature.
As of April 2020, Mauritius has concluded Double Taxation Avoidance Treaties (DTATs) with 46 countries and jurisdictions: Australia (partial), Bangladesh, Barbados, Belgium, Botswana, Cape Verde, China, Croatia, Cyprus, Egypt, France, Germany, Ghana, Guernsey, India, Italy, Jersey, Kuwait, Lesotho, Luxembourg, Madagascar, Malaysia, Malta, Monaco, Mozambique, Namibia, Nepal, Oman, Pakistan, Qatar, Rwanda, Republic of Congo, Senegal, Seychelles, Singapore, Sri Lanka, South Africa, Swaziland, Sweden, Thailand, Tunisia, Uganda, United Arab Emirates, United Kingdom, Zambia, and Zimbabwe. Six DTAT treaties await ratification: Comoros, Gabon, Kenya, Morocco, Nigeria, and Russia, and five DTAT treaties await signature: Cote d’Ivoire, Estonia, Gibraltar, Malawi, and the Gambia. Updated information on TIEAs and DTATs can be accessed via https://www.mra.mu/index.php/taxes-duties/international-taxation/double-taxation-agreements
Mauritius has adopted the OECD’s Standard for Automatic Exchange of Financial Account Information (Common Reporting Standard – CRS), which sets a global benchmark that participating countries will adhere to in a proactive fiscal-information world. The first reporting under this standard was undertaken in September 2018. Further information on the list of reportable jurisdictions for the CRS can be accessed at https://www.mra.mu/index.php/business/cbcr.
3. Legal Regime
Transparency of the Regulatory System
Since 2006, the GoM has reformed trade, investment, tariffs, and income tax regulations to simplify the framework for doing business. Trade licenses and many other bureaucratic hurdles have been reduced or abolished. With a well-developed legal and commercial infrastructure and a tradition that combines entrepreneurship and representative democracy, Mauritius is one of Africa’s most successful economies. Business Mauritius, the coordinating body of the Mauritian private sector, participates in discussions with and presents papers to government authorities on laws and regulations affecting the private sector.
Regulatory agencies do not request comments on proposed bills from the general public. Both the notice of the introduction of a government bill and a copy of the bill are distributed to every member of the Legislative Assembly and published in the Government Gazette before enactment. Bills with a “certificate of urgency” can be enacted with summary process. All proposed regulations are published on the Legislative Assembly’s website, which is publicly accessible via http://mauritiusassembly.govmu.org/English/bills/Pages/default.aspx.
Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. To combat corruption, money laundering and terrorist financing, the government also enacted the Prevention of Corruption Act, the Prevention of Terrorism Act, and the Financial Intelligence and Anti-Money Laundering Act. While Mauritius does not have a freedom of information act, members of the public may request information by contacting the permanent secretary of the relevant ministry.
Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, are publicly available and provide a substantially full picture of Mauritius’ planned expenditures and revenue streams. Information on debt obligations is also at http://mof.govmu.org/English/Public%20Debt/Pages/Debt-Data.aspx.
International Regulatory Considerations
Mauritius is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). It is a signatory to the African Continental Free Trade Area (AfCFTA), which entered into force in May 2019, and the COMESA-EAC-SADC Tripartite Free Trade Area. As at April 2020, the Tripartite FTA has yet to enter into force. The GoM implements its commitments to these regional economic institutions with domestic legal and regulatory adjustments, as appropriate.
Mauritius has been a member of the World Trade Organization (WTO) since 1995. The GoM reports that they notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade to the extent possible. In July 2014, Mauritius notified its category A commitments to the WTO, among the first African countries to do so. Mauritius was the fourth country to submit its instrument of acceptance for the Trade Facilitation Agreement (TFA). In 2019, Mauritius notified its category B and C commitments and their corresponding dates of implementation.
Of TFA’s 36 measures, Mauritius has classified 27 as category A, five as B, and four as C. Discussions with donors to obtain technical assistance to finance trade facilitation projects listed under category C are ongoing and Mauritius secured assistance from the World Bank and the World Customs Organization.
To coordinate efforts to implement the TFA, in 2015 Mauritius set up a National Committee on Trade Facilitation, co-chaired by representatives from government and the private sector. Members include Customs, the Ministry of Agro-Industry and Food Security, the Ministry of Finance and Economic Development, and the Mauritius Chamber of Commerce and Industry. The committee has met 10 times since. Discussion topics include identification of sources of financing for category C commitments and resolution of non-tariff barriers in Mauritius.
Legal System and Judicial Independence
Mauritius draws legal principles from both French civil law and British common law traditions. Its procedures are largely derived from the English system, while its substance is based on the Napoleonic Code of 1804. Commercial and contractual law is also based on the civil code. However, some specialized areas of law are comparable to other jurisdictions. For example, its company law is practically identical to that of New Zealand. Mauritian courts often resolve legal disputes by drawing on current legislation, the local legal tradition, and by means of a comparative approach utilizing various legal systems. The highest court of appeal is the judicial committee of the Privy Council of England. Mauritius is a member of the International Court of Justice. Mauritius established a Commercial Court in 2009 to expedite the settlement of commercial disputes.
Contracts are legally enforceable and binding. Ownership of property is enforced with the registration of the title deed with the Registrar-General and payment of the registration duty. Mauritian courts have jurisdiction to hear intellectual property claims, both civil and criminal. The judiciary is independent and the domestic legal system is generally non-discriminatory and transparent. The Embassy is not aware of any recent cases of government or other interference in the court system affecting foreign investors.
Laws and Regulations on Foreign Direct Investment
The 2017 Economic Development Board Act governs investment in Mauritius, while the 2001 Companies Act contains the regulations governing incorporation of businesses. The Corporate and Business Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the 2001 Companies Act, the 2002 Business Registration Act, the 2009 Insolvency Act, the 2011 Limited Partnerships Act, and the 2012 Foundations Act. Information regarding the various acts can be accessed via the CBRD’s website: http://companies.govmu.org/English/Legislation/Pages/default.aspx
The Competition Commission of Mauritius (CCM) is an independent statutory body established in 2009 to enforce the Competition Act of 2007. It is mandated to safeguard competition by preventing and remedying anti-competitive business practices in Mauritius. Anti-competitive business practices, also called restrictive business practices, may be in the form of cartels, abuse of monopoly situations, and mergers that reduce competition.
The institutional design of the CCM houses both an adjudicative and an investigative organ under one body. While the Executive Director has power to investigate restrictive business practices (the Investigative Arm), the Commissioners determine the cases (the Adjudicative Arm) on the basis of reports from the Executive Director.
Since it began operations, the CCM has undertaken 54 investigations, of which 44 have been completed and 10 are ongoing as of May 2020. To date, the CCM has conducted 266 enquiries, which are preliminary research exercises prior to proceeding to investigations. The results of completed investigations are available on the CCM’s website: http://www.ccm.mu.
Since 2018, the CCM has initiated a process to review and amend the Competition Act of 2007 to enable more effective enforcement. The process was expected to be completed in 2020.
Expropriation and Compensation
The Constitution includes a guarantee against nationalization. However, in 2015, the government passed the Insurance (Amendment) Act to enable the Financial Services Commission (FSC) to appoint special administrators in cases where there is evidence that the liabilities of an insurer and its related companies exceed assets by 1 billion rupees (approximately USD 26 million) and that such a situation “is likely to jeopardize the stability and soundness of the financial system of Mauritius.” The special administrators are empowered to seize and sell assets. The government enacted this law in the immediate aftermath of the financial scandal explained below.
In April 2015, the Bank of Mauritius, the central bank, revoked the banking license of Bramer Bank, the banking arm of Mauritian conglomerate British American Investment (BAI) Group, citing an inadequate capital reserve ratio. As a result, Bramer Bank entered receivership and by May 2015 the receiver had transferred the assets and liabilities of Bramer Bank to a newly created state-owned bank, the National Commercial Bank Ltd., thus effectively nationalizing Bramer Bank. In January 2016, the Mauritian government merged the National Commercial Bank Ltd. with another government-owned bank resulting in Maubank, a new bank dedicated mainly to servicing small- and medium-sized enterprises. The GoM owns over 99 percent of Maubank shares. Efforts to privatize the bank in 2018 did not produce any results.
The government likewise took over much of Bramer’s parent, the BAI Group. The FSC placed the BAI Group in conservatorship, alleging fraud and corporate mismanagement in BAI’s insurance business. Following passage of the Insurance (Amendment) Act in 2015, the FSC created the National Insurance Company, which took over the BAI Group’s core insurance business, and the National Property Fund, which took over other BAI Group assets, including a hospital and several retail outlets. CIEL Healthcare, a local private company, bought the hospital in 2017.
In 2015, BAI’s former chairman filed a dispute against the GoM with the United Nations Commission on International Trade Law (UNCITRAL), alleging that the government illegally appropriated BAI’s assets. The former chairman, who is a Mauritian-French dual national, claimed that Mauritius had breached the Mauritius-France bilateral investment treaty and requested the restitution of his assets and payment of compensation. The tribunal concluded that it lacked jurisdiction over the dispute and ruled in favor of the GoM. The former chairman has appealed this decision. In May 2019, the former chairman filed a case in the Supreme Court to challenge the appointment of the liquidator for the Bramer Banking Group.
Mauritius is a member of the International Center for the Settlement of Investment Disputes and a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act. Mauritius is also a member of the Multilateral Investment Guarantee Agency of the World Bank.
Investor-State Dispute Settlement
Mauritius does not have a bilateral investment treaty or free trade agreement with the United States.
The embassy is aware of a dispute between a U.S. company that operates in Mauritius and a parastatal partner. After an apparent commercial impasse, in early 2020 the parastatal filed a criminal complaint against the CEO of the U.S. company, who is a U.S. citizen. The accused, whom police did not take into custody but forbade to leave the country pending investigation, alleged that the parastatal filed the complaint to gain leverage in the commercial dispute.
As explained above, the former chairman of BAI, a dual French-Mauritian national, filed a dispute against the government of Mauritius with UNCITRAL alleging that the government illegally appropriated BAI’s assets. The tribunal ruled in favor of the government and the former chairman has appealed.
In 2017, the Supreme Court rendered a judgment in a major unfair competition case lodged in 2005 by Emtel Ltd., a local telecommunications firm, against Mauritius Telecom, a parastatal entity, and the former regulator Telecommunications Authority. Emtel was engaged in a joint venture with U.S. majority-owned Millicom Enterprises, but Emtel bought all the shares of Millicom in 2014. The court awarded over USD 16 million in damages to Emtel.
A Malaysian power company, CT Power, is challenging the government’s decision to cancel a proposed energy project, which they had been negotiating with the previous government. The Supreme Court ruled in favor of CT Power in July 2016. The Ministry of Energy and Public Utilities, supported by the Central Electricity Board, appealed to the Privy Council, which overturned the ruling in June 2019.
Another dispute involves local company Betamax against the State Trading Corporation (STC) for breach of contract. In 2009, Betamax received a long-term contract with a previous government for the transportation of petroleum products from an oil refinery in India to Mauritius. A different government elected in 2014 tried at first to negotiate Betamax out of the transportation contract on the grounds that the contract had been awarded unlawfully. After negotiations failed, the government decided to rescind the contract. Betamax took the case to the Singapore International Arbitration Center (SIAC). In 2017, SIAC decided in favor of Betamax and ordered the STC to pay approximately USD 133 million in damages to Betamax for breach of contract. STC petitioned the Supreme Court of Mauritius to set aside the verdict, which it did in May 2019, concluding that the contract violated local procurement regulations and public policy. In June 2019, Betamax appealed to the Privy Council, which has not yet heard the appeal.
The Association des Hoteliers et Restaurateurs of Mauritius (AHRIM), which promotes the interests of hotels and restaurants in Mauritius, has challenged the GoM’s issuance of an environmental impact assessment license to Growfish International Ltd., a company involved in aquaculture. AHRIM is concerned about the impact the fish farm can have on tourism and the marine environment. Growfish is a company incorporated in Mauritius and financed by investors from South Africa and Norway. In April 2019, the tribunal ruled in favor of AHRIM.
International Commercial Arbitration and Foreign Courts
In 2011, the GoM, the London Court of International Arbitration (LCIA), and the Mauritius International Arbitration Center (MIAC) established a new arbitration center in Mauritius called the LCIA-MIAC Arbitration Center. LCIA-MIAC offered all services offered by the LCIA in the United Kingdom. In July 2018, the LCIA and GoM terminated the partnership, after which the MIAC began operating as an independent organization. The organization’s website is http://miac.mu.
Additionally, the Mauritius Chamber of Commerce and Industry’s (MCCI) Arbitration and Mediation Center (MARC) was established in 1996 as an initiative of the MCCI to provide the business community with alternative forms of dispute resolution using internationally accepted arbitration and mediation standards. More information is available at https://www.marc.mu/en.
As mentioned above, state-owned STC asked a Mauritian court to set aside a decision by the Singapore International Arbitration Center. The court ruled in favor of the STC. The plaintiff has appealed to the Privy Council.
Bankruptcy is not criminalized in Mauritius. The 2009 Insolvency Act amended and consolidated the law relating to insolvency of individuals and companies and the distribution of assets in the case of insolvency and related matters. Most notably, the act introduced administration procedures, providing creditors the option of a more orderly reorganization or restructuring of a business than in liquidation. A bankrupt individual is automatically discharged from bankruptcy three years after adjudication, but may apply to be discharged earlier. The act draws on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997. The act can be found at https://www.fscmauritius.org/media/1155/insolvency-act-2009-130114.pdf.
In April 2020, the Insolvency (Administration) (Equal Treatment to Classes of Creditors) Regulations were issued to ensure equal treatment to creditors classified in the same category. The regulations can be accessed at https://bit.ly/2WwTIev. According to the World Bank’s 2020 Doing Business report, Mauritius ranked 28th out of 190 countries in terms of resolving insolvency.
4. Industrial Policies
Mauritius applies investment incentives uniformly to both domestic and foreign investors. The incentives are outlined in the Income Tax Act, the Customs Act, and the Value Added Tax Act. In the 2018-2019 national budget, a number of incentives were implemented to attract investors to Mauritius. These include: (i) reduced corporate tax rate of three percent for companies engaged in global trading activities; (ii) investment tax credit of five percent over three years on the cost of new plant and machinery excluding motor vehicles; (iii) five year tax holiday for Mauritian companies collaborating with the Mauritius Africa Fund with respect to investment in the development of infrastructure in Special Economic Zones, and; (iv) five year tax holiday on income derived from smart parking solutions or other green initiatives.
Mauritius offers prospective investors a low-tax jurisdiction and a number of other fiscal incentives, including the following: (i) flat corporate and income tax rate of 15 percent; (ii) 100 percent foreign ownership permitted; (iii) no minimum foreign capital required; (iv) no tax on dividends or capital gains; (v) free repatriation of profits, dividends, and capital; (vi) accelerated depreciation on acquisition of plant, machinery, and equipment; (vii) exemption from customs duty on imported equipment; and (viii) access to an extensive network of double taxation avoidance treaties.
Additionally, the government has established a Property Development Scheme (PDS) to attract high net worth non-citizens who want to acquire residences in Mauritius. Buyers of a residential unit valued over USD 500,000 in certain projects are eligible to apply for a residence permit in Mauritius. The residential unit can be leased or rented out by the owner. More details on the PDS and other investment schemes are available via http://www.edbmauritius.org/schemes.
The Regulatory Sandbox License (RSL), announced in the 2016-2017 national budget, is intended to promote innovation by eliminating barriers to investment in cutting-edge technology. An RSL gives an investor fast-track authorization to conduct business activity in a sector even if there is not yet a legal or regulatory framework in place for the sector. Further details on the RSL can be accessed via http://www.edbmauritius.org/schemes/regulatory-sandbox-license/.
Foreign Trade Zones/Free Ports/Trade Facilitation
The Mauritius Freeport, a free trade zone, was established in 1992 and is a customs-free zone for goods destined for re-export. The Freeport has grown dramatically in its 26-year history: Developed space has increased from 5,000 square meters in 1993 to over 300,000 square meters in 2018. The government’s objective is to promote the country as a regional warehousing, distribution, marketing, and logistics center for eastern and southern Africa and the Indian Ocean rim. Through its membership in COMESA, SADC, and the IOC, Mauritius offers preferential access to a market of over 600 million consumers, representing an import potential of USD 100 billion. Companies operating in the Freeport are exempt from corporate tax. Foreign-owned firms operating in the Freeport have the same investment incentives and opportunities as local entities.
Activities carried out in the Freeport include warehousing and storage, breaking bulk, sorting, grading, cleaning and mixing, labeling, packing, repacking and repackaging, minor processing and light assembly, manufacturing activity, ship building, repairs and maintenance of ships, aircrafts, and heavy-duty equipment, storage, maintenance and repairs of empty containers, export-oriented seaport and airport based activities, freight forwarding services, quality control and inspection services, and vault activity for storing precious stones and metals, works of art, and the like. Approximately 3,800 people are employed at the Freeport.
In 2019, trade value at the Freeport was 29.7 billion rupees (approximately USD 825 million) and volume was 517,000 metric tons. This is a decrease from 2018, when trade value was 44 billion rupees and volume was 542,000 metric tons. Top trading partners for import in 2019 were the United Kingdom, India, Taiwan, Malaysia, and China. Top trading partners for export in 2019 were Reunion (France), South Africa, Kenya, Seychelles, and United Arab Emirates. Top goods traded through the Freeport included mineral products, live animals, foodstuffs and beverages, and plastic and metal products.
Per the 2019 Finance Act, a Freeport operator engaged in manufacturing inside the Freeport is allowed to apply as a private Freeport developer to build, develop, and manage its own infrastructural activities, provided that it carries out the same manufacturing activity. A Freeport operator or private Freeport developer engaged in the manufacture of goods pays a 3 percent tax rate on profits derived from the sale of goods on the local market.
Existing manufacturing companies with a Freeport certificate must employ a minimum of five employees and incur an annual expenditure exceeding 3.5 million rupees (USD 880,000). Freeport operators must pay Corporate Social Responsibility tax on the sale of goods on the local market.
Performance and Data Localization Requirements
The GoM does not impose local employment requirements on foreign investors. A foreign national can apply for an Occupation Permit (OP), which is a combined work and residence permit, subject to certain conditions such as minimum investment, salary, and/or business turnover. The OP allows foreign nationals to work and reside in Mauritius under three specific categories, namely: (i) investor, (ii) professional, or (iii) self-employed. Also, foreign nationals above the age of 50 years may choose to retire in Mauritius under a Residence Permit (RP). An OP or an RP is issued for a maximum period of three years and the permit holder may submit a new application upon expiry of the permit. Dependents of an OP or RP holder may also apply for residence permits for a duration not exceeding that of the OP or RP holder. Details on the minimum investment, salary, and turnover amounts required to qualify for an OP or RP are available via http://www.edbmauritius.org/work-and-live-in-mauritius/occupation-permitresidence-permit.
The 2017 Data Protection Act (DPA) is the law that governs the protection of personal data in Mauritius. Effective January 15, 2018, the DPA aimed to align with the European Union’s General Data Protection Regulation (GDPR). The GoM established the Data Protection Office (http://dataprotection.govmu.org/English/Pages/default.aspx) in 2009. The Data Protection Commissioner is responsible for upholding the rights of individuals set forth in the DPA and for enforcing the obligations imposed on data controllers and processors.
In 2016, Mauritius ratified the Council of Europe’s Convention for Protection of Individuals with regard to Automatic Processing of Personal Data (Convention 108). Mauritius is the second non-European country and the first African country to sign the convention. The agreement gives individuals the right to protection of their personal data. The Ministry of Information Technology, Communication and Innovation has started the ratification process of Convention 108 with the Council of Europe.
Mauritius’ DPA applies only when processing of personal data is concerned. Failure to comply with Section 28 of the DPA, which establishes the lawful purposes for which personal data may be processed, can result in a fine and up to five years imprisonment. Section 29 sets requirements for processing special categories of data, such as ethnic origin, political adherence, and mental health condition.
There are no enforcement procedures for investment performance requirements.
5. Protection of Property Rights
Real property rights are respected in Mauritius. A non-citizen can hold, purchase, or acquire immovable property under the Non-Citizens (Property Restriction) Act, subject to the government’s approval. Ownership of property is memorialized with the registration of the title deed with the Registrar-General and payment of the registration duty. The recording system of mortgages and liens is reliable. Traditional use rights are not an issue in Mauritius as there were no indigenous peoples present at the time of European colonization. According to the World Bank’s 2020 Doing Business Report, Mauritius ranks 23rd out of 190 countries for the ease of registering property.
Intellectual Property Rights
Intellectual property rights (IPR) in Mauritius are protected by two pieces of legislation, namely the 2014 Copyrights Act and the 2019 Industrial Property Act of 2019. In August 2019, the new Industrial Property bill was enacted. (http://www.mauritiustrade.mu/ressources/pdf/industrial-property-act-2019.pdf) It consolidates different elements of industrial property (patents, utility models, layout-designs of integrated circuits, breeder’s rights, industrial designs, marks, trade names, and geographical indications). The 2019 act also makes provisions for Mauritius to adhere to treaties that the World Intellectual Property Organization (WIPO) administers,, such as the Patent Cooperation Treaty (PCT) for the international registration of patents, the Hague Agreement Concerning the International Registration of Industrial Designs, and the Madrid Protocol to facilitate the registration of trademarks.
In 2017, the Copyright Act was amended to redefine and better safeguard the interests of copyright owners and to put in place a new regulatory framework for the Mauritius Society of Authors (MASA). MASA is responsible for collection of copyright fees and for administering the economic rights of copyright owners. Amendments to the Copyright Act can be accessed on the Supreme Court website: https://supremecourt.govmu.org/_layouts/CLIS.DMS/Legislations/SearchLegislations.aspx.
Mauritius is a member of WIPO and party to the Paris Convention for the Protection of Industrial Property the Berne Convention for the Protection of Literary and Artistic Works, and the Universal Copyright Convention. The Industrial Property Act complies with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A trademark is initially registered for 10 years and may be renewed for another 10 years. A patent expires 20 years after the application filing date.
While IPR legislation in Mauritius is consistent with international norms, enforcement is relatively weak. According to a leading IPR law firm, police will normally only take action against IPR infringement in cases where the rights-holder has an official representative in Mauritius because the courts require a representative to testify that the products seized are counterfeit.
The Customs Department of the Mauritius Revenue Authority is the primary agency responsible for safeguarding Mauritian borders against counterfeit goods and piracy. The Customs Department requires owners or authorized users of patents, industrial designs, collective marks, marks, or copyrights to apply in writing to the Director General to suspend clearance of goods suspected of infringing intellectual property rights. Once an application is approved, it remains valid for two years. There are no administrative costs to pay for an application. An application can also be filed as a preventive measure. Further details on the documents required to apply can be found at https://www.mra.mu/download/BrochureIPR.pdf.
Customs may act upon its own initiative to suspend clearance if there is evidence of IPR infringement.. Customs will then contact the owner or authorized user for follow-up actions. IPR owners are recommended to join the World Customs Organization’s Interface Public-Members tool, which allows Customs officers to access operational data input by rights holders concerning their products, thus facilitating the identification of counterfeit goods.
The Customs Department keeps a record of counterfeit goods seized. Customs has authority to seize and destroy counterfeit goods. In 2019, the Customs Department carried out seizures of a total of 261,267 goods valued at USD 2.3 million. The infringing party is responsible for paying for the storage and/or destruction of the counterfeit goods.
Mauritius is not listed in the U.S. Trade Representative (USTR) Special 301 Report or the Notorious Market List.
The GoM welcomes foreign portfolio investment. The Stock Exchange of Mauritius (SEM) was opened to foreign investors following the lifting of foreign exchange controls in 1994. Foreign investors do not need approval to trade shares, except for when doing so would result in their holding more than 15 percent in a sugar company, a rule detailed in the Securities (Investment by Foreign Investors) Rules of 2013. Incentives to foreign investors include no restrictions on the repatriation of revenue from the sale of shares and exemption from tax on dividends for all resident companies and for capital gains of shares held for more than six months.
The SEM currently operates two markets: the Official Market and the Development and Enterprise Market (DEM). As of December 2019, the shares of 62 companies (local, global business, and foreign companies) were listed on the Official Market, representing a market capitalization of USD 9.8 billion. Unique in Africa, the SEM can list, trade, and settle equity and debt products in U.S. dollars, euros, pounds sterling, South African rand, as well as Mauritian rupees. A variety of new asset classes of securities such as global funds, depositary receipts, mineral companies, and specialist securities including exchange-traded funds and structured products have also been introduced on the SEM. The DEM was launched in 2006 and the shares of 37 companies are currently listed on this market with a market capitalization of USD 1.4 billion. Foreign investors accounted for 39.5 percent of trading volume on the exchange for the financial year 2018-2019. Standard & Poor’s, Morgan Stanley, Dow Jones, and FTSE have included the Mauritius stock market in a number of their stock indices. Since 2005, the SEM has been a member of the World Federation of Exchanges. The SEM is also a partner exchange of the Sustainable Stock Exchanges Initiative. In 2018, in line with its strategy to digitalize its investor services, SEM launched the mySEM mobile application.
The government respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions. A variety of credit instruments is available to local and foreign investors through the banking system.
Money and Banking System
Mauritius has a sophisticated banking sector. As of April 2020, 20 banks are licensed to undertake banking business, of which five are local banks, nine are foreign-owned subsidiaries, one is a joint venture, four are branches of foreign banks, and one is licensed as a private bank. One bank conducts solely Islamic banking. Further details can be obtained at https://www.bom.mu/financial-stability/supervision/licensees/list-of-licensees. On April 1, 2020, the Bank of Mauritius appointed a conservator for BanyanTree Bank. Details were scarce, but the law allows the central bank to appoint a conservator to protect the bank’s assets.
According to the Banking Act of 2004, all banks are free to conduct business in all currencies. There are also six non-bank deposit-taking institutions, as well as 12 money changers and foreign exchange dealers. There are no official government restrictions on foreigners opening bank accounts in Mauritius, but banks may require letters of reference or proof of residence for their due diligence. The Bank of Mauritius, the country’s central bank, carries out the supervision and regulation of banks as well as non-bank financial institutions authorized to accept deposits. The Bank of Mauritius has endorsed the Core Principles for Effective Banking Supervision as set out by the Basel Committee on Banking Supervision.
The banking system is dominated by two long-established domestic entities: the Mauritius Commercial Bank (MCB) and the State Bank of Mauritius (SBM), which together constitute about 60 percent of the total domestic market. Maubank, the third-largest bank in the country, became operational in 2016 following a merger between the Mauritius Post & Cooperative Bank and the National Commercial Bank. The Bank of China started operations in Mauritius in 2016. Other foreign banks present in Mauritius include HSBC, Barclays Bank, Bank of Baroda, Habib Bank, BCP Bank (Mauritius), Standard Bank, Standard Chartered Bank, State Bank of India, and Investec Bank. As of February 2020, commercial banks’ total assets amounted to USD 41.7 billion.
According to the Bank of Mauritius 2019 Annual Report, the banking sector remained healthy with an average capital adequacy ratio of 19 percent as of June 2019. Banks’ asset quality was unchanged from end-June 2018 to end-June 2019 and is generally considered to be sound. Non-performing loans as a ratio to total outstanding loans stood at 5.5 per cent in June 2019.
In July 2017, the Banking Act was amended to double the minimum capital requirement to USD 11.2 million from USD 5.8 million. The Central Bank began reporting the liquidity coverage ratio in 2017 to improve the liquidity profile of banks and their ability to withstand potential liquidity disruptions. The latest International Monetary Fund Article IV report highlights that banks have increased exposure to the region and that the Bank of Mauritius has strengthened cross-border supervision and cooperation with foreign regulators. The IMF report also recommends that additional steps be taken to strengthen financial stability, including lowering the high non-performing loans stock through a more stringent approach to writing-off legacy exposures, and by safeguarding the longer-term forex funding needs stemming from banks’ swift expansion abroad.
The Covid-19 crisis is expected to heavily impact banks’ profitability due to increased defaults and delayed loan repayments. As part of its Covid-19 response, the Bank of Mauritius has made USD 132 million available through commercial banks as special relief funds to help meet cash flow and working capital requirements. The cash reserve ratio applicable to commercial banks was reduced from 9 percent to 8 percent. The Bank of Mauritius also put on hold the Guideline on Credit Impairment Measurement and Income Recognition, which was effective since January 2020.
In July 2019, the Bank of Mauritius Act was amended to allow the Bank of Mauritius to use special reserve funds in exceptional circumstances and with approval of the central bank’s board for the repayment of central government external debt obligations, provided that repayments would not adversely affect the bank’s operations. This provision was used in January 2020 to repay government debt worth USD 450 million, raising concerns about the central bank’s independence.
Most major banks in Mauritius have correspondent banking relationships with large banks overseas. In recent years, according to industry experts, no banks have lost correspondent banking relationships and none report being in jeopardy of doing so as of April 2020.
In January 2019, the Central Bank signed a memorandum of cooperation with the Mauritius Police Force on financial crimes and illicit activities relating to the financial services sector. In February 2020, the Financial Action Task Force (FATF) named Mauritius as a jurisdiction under increased monitoring, commonly known as the Grey List. At that time, Mauritius made a high-level political commitment to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its AML/CFT regime. Since the completion of its Mutual Evaluation Report in 2018, Mauritius has made progress on a number of its recommended actions to improve technical compliance and effectiveness, including amending the legal framework to require legal persons and legal arrangements to disclose of beneficial ownership information and improving the processes of identifying and confiscating proceeds of crimes. Mauritius is working to implement its action plan, including (i) demonstrating that the supervisors of its global business sector and Designated Non-Financial Businesses and Professions implement risk-based supervision; (ii) ensuring the access to accurate basic and beneficial ownership information by competent authorities in a timely manner; (iii) demonstrating that law enforcement agencies have capacity to conduct money laundering investigations, including parallel financial investigations and complex cases; (iv) implementing a risk based approach for supervision of its non-profit sector to prevent abuse for terrorism financing purposes, and (v) demonstrating the adequate implementation of targeted financial sanctions through outreach and supervision.
In May 2020, the European Commission added Mauritius to its list of AML-CTF high-risk jurisdictions, pending approval from the European Council and European Parliament, and not to take effect until October 2020.
In February 2018, the Fintech and Innovation-driven Financial Services (FIFS) Regulatory Committee held its first meeting at the Financial Services Commission, the regulator for the non-banking financial services, to assess the regulatory framework concerning FIFS regulations in Mauritius and to identify priority areas within the regulatory space of fintech activities. In May 2018, the Committee submitted recommendations for regulating the fintech sector to authorities. A National Regulatory Sandbox License (RSL) Committee was set up to assess all fintech applications requiring a sandbox license for business activities without an existing legal framework. Guidelines to apply to the RSL for fintech projects can be found at https://www.edbmauritius.org/opportunities/financial-services/fs-fintech-and-innovation.
Effective March 2019, the Financial Services Commission allows businesses that provide custodial services for digital assets. According the Bank of Mauritius 2019 Annual Report, the FIFS committee has initiated work on approaches to regulate Fintech tools such as artificial intelligence, big data, distributed ledger technologies, and biometrics.
Foreign Exchange and Remittances
The government of Mauritius abolished foreign exchange controls in 1994. Consequently, no approval is required for converting, transferring, or repatriating profits, dividends, or capital gains earned by a foreign investor in Mauritius. Funds associated with any form of investment can be freely converted into any world currency.
The exchange rate is generally market-determined, though the Bank of Mauritius, the central bank, occasionally intervenes. Between January 2019 and December 2019, the Mauritian rupee depreciated against the U.S. dollar by 6.4 percent, the pound by 8.3 percent, and the euro by 3.6 percent. Due to the Covid-19 crisis, the Bank of Mauritius intervened regularly on the domestic foreign exchange market in early 2020.
There are no time or quantity limits on remittance of capital, profits, dividends, and capital gains earned by a foreign investor in Mauritius. Mauritius has a well-developed and modern banking system. There is no legal parallel market in Mauritius for investment remittances. The Embassy is unaware of any proposed changes by the government to its investment remittance policies.
Sovereign Wealth Funds
The government of Mauritius does not have a Sovereign Wealth Fund.
The government also holds controlling shares in the State Bank of Mauritius, Air Mauritius (the national airline), and Mauritius Telecom. These state-controlled companies have Boards of Directors on which seats are allocated to senior government officials. The government nominates the chairperson and CEO of each of these companies. In April 2020, Air Mauritius requested voluntary administration, similar to Chapter 11 bankruptcy in the United States, because it could not comply with financial obligations.
The government also invests in a wide variety of Mauritian businesses through its investment arm, the State Investment Corporation. The government is also the owner of Maubank and the National Insurance Company.
Two parastatal entities are involved in the importation of agricultural products: the Agricultural Marketing Board (AMB) and the State Trading Corporation (STC). The AMB’s role is to ensure that the supply of certain basic food products is constant and their prices remain affordable. The STC is the only authorized importer of petroleum products, liquefied petroleum gas, and flour. SOEs purchase from or supply goods and services to private sector and foreign firms through tenders.
Audited accounts of SOEs are published in their annual reports. Mauritius is part of the OECD network on corporate governance of state-owned enterprises in southern Africa.
The government has no specific privatization program. In 2017, however, as part of its broader water reform efforts, the government agreed to a World Bank recommendation to appoint a private operator to maintain and operate the country’s potable water distribution system. Under the World Bank’s proposed public-private partnership, the Central Water Authority (CWA) would continue to own distribution and supply assets, and will be responsible for business planning, setting tariffs, capital expenditure, and monitoring and enforcing the private operator’s performance.
In March 2018, despite protest by trade unions and consumer associations, the Minister of Energy and Public Utilities reiterated his intention to engage by the end of the year a private operator as a strategic partner to take over the water distribution services of the CWA. To date, this has not materialized. The government has said for years it planned to sell control of Maubank, into which it has injected about USD 173 million since it nationalized the bank in 2015. In the 2019-2020 budget speech, the prime minister said the government would sell non-strategic assets to reduce government debt. His office never identified a list of assets, but in parliament the prime minister has mentioned Maubank, the National Insurance Company, and Casinos of Mauritius as possible divestments.
8. Responsible Business Conduct
The National Committee for Corporate Governance (NCCG) was established under Section 63 of the Financial Reporting Act (2004) and is the coordinating body responsible for all matters pertaining to corporate governance in Mauritius. The purpose of the Committee is to: (i) establish principles and practices of corporate governance; (ii) promote the highest standards of corporate governance; (iii) promote public awareness about corporate governance principles and practices; and (iv) act as the national coordinating body responsible for all matters pertaining to corporate governance. The latest Code of Corporate Governance for Mauritius (2016) was launched on February 13, 2017, and can be accessed at http://www.miod.mu/info-centre/new-code-of-corporate-governance-for-mauritius-2016. The Financial Reporting Council (FRC), also set up under the Financial Reporting Act (2004), aims to advocate for the provision of high-quality reporting of financial and non-financial information by public interest entities and to improve the quality of accountancy and audit service.
The Ministry of Financial Services and Good Governance was established following the December 2014 elections. Its mandate is to provide guidance and support for enforcement of good governance and the eradication of corruption. The Mauritius Institute of Directors (MIoD) is an independent, private sector-led organization that also promotes high standards and best practices of corporate governance, with additional information available at http://www.miod.mu.
In 2017, the government set up a National Corporate Social Responsibility (CSR) Foundation, which operated under the Ministry of Social Integration and Economic Empowerment. In 2019, this foundation became the National Social Inclusion Foundation (NSIF). The NSIF is managed by a council consisting of members from the private and public sectors, civil society, and academia. Under the 2016 Finance Act, every company registered in Mauritius must set up a CSR fund and contribute each year the equivalent of 2 percent of its taxable income from of the previous year. In 2017 and 2018, companies were required to remit at least 50 percent of their CSR funds to tax authorities for the National CSR Foundation. The required contribution increased in 2019 to 75 percent. The NSIF is supposed to channel the money to NGO projects in priority areas identified by the government. These priority areas are poverty alleviation, educational support, social housing, family protection, people with severe disabilities, and victims of substance abuse. Further details can be found on the NSIF website: https://www.nsif.mu.
The prevalence of corruption in Mauritius is low by regional standards, but graft and nepotism nevertheless remain concerns and are increasingly a source of public frustration. Several high-profile cases involving corruption have reinforced the perception that corruption exists at the highest political levels, despite the fact that Mauritian law provides for criminal penalties for corruption by officials. A former prime minister was arrested in 2015 on allegations of money laundering although courts have since dismissed all charges. The state prosecutors appealed the last dismissal in late 2019 and the appeal is pending. A minister in the previous government had to step down in 2016 on allegations of bribery. In March 2017, allegations surfaced concerning possible political interference in the Financial Services Commission’s issuance of an investment banking license to an Angolann billionaire, who is being investigated for alleged corruption in Portugal. In March 2018, the president of Mauritius resigned after press reported that she bought apparel, jewelry, and a laptop computer with a credit card provided by an NGO financed by the same Angolan businessman.
Investors should know that while the constitution and law require arrest warrants to be based on sufficient evidence and issued by a magistrate, police may detain an individual for up to 21 days under a “provisional charge” based on a reasonable suspicion, with the concurrence of a magistrate. Two French businessmen claimed that in February 2015 authorities held them against their will. A U.S. investor has been unable to leave Mauritius since February 1, 2020, without charges filed against him.
In 2002, the government adopted the Prevention of Corruption Act, which led to the establishment of an Independent Commission Against Corruption (ICAC). ICAC has the power to investigate corruption and money laundering offenses and can also seize the proceeds of corruption and money laundering. The Director of ICAC is nominated by the prime minister. The Good Governance and Integrity Reporting Act of 2015 was announced as a measure to recover “unexplained wealth” and came into force in early 2016. Critics of the act dislike its presumption of guilt, requiring the accused to demonstrate a lawful source of questionable assets, as well as the application of the law retroactively for seven years. The 2018 Declaration of Assets Act (DoA) entered into force in June 2019 and defines which public officials are required to declare assets and liabilities to the ICAC. These public officials include members of the National Assembly, mayors, chairpersons and chief executive officers of state-owned enterprises and statutory bodies, among others.
Mauritius is the 52nd least-corrupt nation out of 175 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International, up from 51st in 2018 and down from 54th in 2017. However, Mauritius retained its first rank in overall governance in Africa for the 12th consecutive year, according to the 2018 Ibrahim Index of African Governance.
Although Mauritius’ generally positive reputation for transparency and accountability has been hurt by some high-profile scandals. U.S. investors, in conversations with embassy personnel, have not identified corruption as an obstacle to investment in the country. They have, however, encountered attempts for bribery.
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10. Political and Security Environment
Mauritius has a long tradition of political and social stability. Civil unrest and political violence are uncommon. Free and fair national elections are held every five years with the last general elections held in November 2019. Those most recent elections took place without incident. The incumbent prime minister, who as finance minister in January 2017 was appointed prime minister when his father resigned (in accordance with the constitution), won the elections.
Crime rates are low but petty and violent crime can occur. Visitors should keep track of their belongings at all times due to the potential for pick-pocketing and purse-snatching, especially in crowded and tourist areas. Visitors should also avoid walking alone, particularly on isolated beaches and at night, and should avoid demonstrations.
11. Labor Policies and Practices
According to the Mauritian government, total employment stood at 551,300 in 2019, an increase from 543,700 in 2018. The unemployment rate decreased to 6.7 percent in 2019 from 6.9 percent in 2018, with a high jobless rate among youth and women. In the fourth quarter of 2019, the youth unemployment rate was 23 percent, and 62 percent of the total 37,900 unemployed people were women.
The labor market remains restricted by rising unemployment among graduates and low-skilled workers, and a high number of unemployed women. It is further characterized by a persistent mismatch between qualifications of the unemployed and the skills required in an increasingly services-oriented economy. Government labor market programs aimed at building human capital have been extended, with policies to develop skills of the unemployed focusing on apprenticeships and placements. In November 2016, the government introduced the National Skills Development Program (NSDP), a fully-funded technical training program for youth, which was still running as of April 2020. The NSDP is managed by the Human Resource Development Council (HRDC), which operates under the Ministry of Education and is responsible for promoting the development of the labor force in Mauritius. The HRDC, with technical and financial support from the French development agency, is also devising a National Skills Development Strategy (NSDS) for 2020-2024. The aim of the NSDS is to improve the effectiveness and efficiency of skills development programs. In 2018, the government introduced the SME Employment Scheme, which allows SMEs to employ recent graduates and the government pays the graduates a monthly stipend for one year. In 2019, the government opened the scheme to diploma holders as well.
In 2017, the National Assembly passed the National Employment Act. The object of the act was to repeal the Employment and Training Act and introduce a modern legislative framework. The act provides the labor market with information on supply and demand of skills, job seekers, and training institutions; promotes placement and training of job seekers, including young persons and persons with disabilities; and promotes labor migration and home-based work. In November 2017, the Equal Opportunities Act was amended to protect prospective employees with criminal records from discrimination when being considered for recruitment or promotion.
In 2018, the government introduced a minimum monthly wage of 9,000 Mauritian rupees (approximately USD 255) for all workers, affecting over 100,000 low-paid workers. In November 2019, the cabinet, following a recommendation from the National Wage Consultative Council, increased the minimum wage again to 10,200 rupees (USD 284), effective January 2020. Workers’ rights are protected under the 2019 Workers’ Rights Act, taking effect in January 2020. The legislation provides for a portable retirement gratuity fund, fair compensation in case of termination, harmonization of working conditions in different sectors, the flexibility to request the right to work from home either on a full- or part-time basis, and equal remuneration for equal work, among others. The act also adds to the Equal Opportunities Act through several measures against discrimination in employment and occupation.
Trade unions are independent of government and employers. Mauritius has an active trade union movement, representing about 25 percent of the workforce, and labor-management relations are generally positive. A list of trade unions is available at http://labour.govmu.org/English/Publications/Pages/Reports-and-publications.aspx. The last major strike affecting the economy took place in 1979. The government generally seeks to avoid strikes through a system that promotes settlement through negotiation or arbitration by the Employment Relations Tribunal and the National Remuneration Board. Mauritius participates actively in the annual International Labor Organization (ILO) conference in Geneva, Switzerland, and adheres to ILO core conventions protecting workers’ rights.
12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
In December 1997, Mauritius signed an investment incentive agreement with OPIC: https://2017-2021.state.gov/wp-content/uploads/2019/02/12912-Mauritius-Finance-Guarantees-12.15.1997.pdf. Mauritius, being classified as an upper-middle income country, is not a priority for DFC programs, but may be considered for programs that address key agency priorities. Mauritius is also a member of the World Bank’s Multilateral Investment Guarantee Agency. Countries with significant government-financed investment in Mauritius include India, France, and China.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source*
USG or international statistical source
USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Host Country Gross Domestic Product (GDP) ($M USD)