Mauritius Budget 2024-2025 and its impact on foreign investors and professionals
In an ambitious move to propel economic growth and solidify its status as a prime destination for foreign investors, Mauritius has introduced a series of innovative measures in the Budget 2024-2025. This forward-looking budget focuses on enhancing the ease of doing business, expanding the financial services sector, promoting sustainable practices, and boosting key industries like tourism and ICT. Blue Azurite gives you an overview of these strategic reforms designed to transition Mauritius into a MUR 1 trillion economy by 2030. Streamlining business operations Central to the budget is a series of initiatives aimed at simplifying business operations in Mauritius. Recognizing the pivotal role of efficiency in economic growth, the government has set forth plans to significantly reduce the processing time for business permits and licenses. This includes a commitment to halve the turnaround time for all business-related applications, ensuring that licenses and permits are processed within 10 working days, provided all requirements are met. Additionally, the budget introduces reforms to the Occupational Permit (OP) system to make it more attractive for foreign professionals. The salary threshold for OPs has been lowered from Rs 30,000 to Rs 22,500, and a new 3-month temporary OP is now available for professionals with over 10 years of experience, facilitating easier access to the Mauritian job market. Moreover, the expansion of foreign labor quotas and the extension of the duration of stay for certain sectors aim to attract a wider pool of international talent, addressing local skills shortages and driving further economic activity. Reinforcing the financial services sector The financial services sector receives a robust enhancement with the introduction of a 10-year expert OP specifically designed to attract foreign talent in areas such as wealth management, family offices, and virtual assets. This is complemented by strategic regulatory reforms intended to strengthen the financial landscape. Notable among these is the strengthening of the operational independence of the Central Bank and the development of a framework for the secondary trading of government bonds on the Stock Exchange of Mauritius (SEM). Furthermore, the Financial Services Commission (FSC) is set to increase processing and annual fees, and amendments will be made to relevant acts to incorporate fees for post-licensing processes. The amendments to the National Payment Systems (NPS) Act to better align payment instruments with virtual assets signal Mauritius’s intent to stay at the forefront of financial technology innovations. Advancing ICT and Entrepreneurship Recognizing the critical role of technology and innovation in contemporary economies, the budget introduces significant incentives for the ICT sector. These include a 25% refund under the ‘Small Business Digital Champion Scheme’ for investments of at least MUR 500,000 in new technologies and equipment. Additionally, a 90% refund on training in artificial intelligence aims to bolster the country’s technological skill base. Support for small and medium enterprises (SMEs) and entrepreneurs is also strengthened, with measures such as salary compensation up to MUR 2,000, a 10% rental rebate from the Development Bank of Mauritius, and the writing off of loans over 20 years by June 2025. These initiatives provide a nurturing environment for local businesses, fostering innovation and driving economic diversity. Boosting the tourism sector Tourism, a vital component of Mauritius’s economy, benefits from several strategic initiatives aimed at enhancing its global competitiveness. The introduction of the Tourism Development Bill and a streamlined licensing framework are set to simplify operations and spur growth in this sector. A significant increase of 20% in the budget for promotion and destination marketing by the Mauritius Tourism Promotion Authority underscores a commitment to attracting more visitors to the island. Furthermore, infrastructure developments, such as the new runway at Plaine Corail, are expected to enhance connectivity and support tourism in Rodrigues. The implementation of e-Gate and e-Passport controls at borders will improve the travel experience, while ambitious goals to position Mauritius as a Green-Certified Destination by 2030 highlight the country’s commitment to sustainable tourism practices. Addressing climate change The introduction of a Corporate Climate Responsibility Levy of 2% on profits for companies with turnovers exceeding MUR 50 million exemplifies Mauritius’s proactive stance on environmental sustainability. This levy will fund projects aimed at combating coastal erosion and promoting a circular economy, integrating environmental responsibility into the corporate sector. Summing up The Mauritius Budget 2024-2025 is a comprehensive blueprint designed to enhance the country’s attractiveness as an investment destination. By streamlining business processes, strengthening the financial sector, supporting technological advancement, and embracing sustainable practices, Mauritius is not just inviting foreign investment but is also paving the way for sustainable economic growth and development. This holistic approach ensures that Mauritius remains competitive on the global stage, ready to welcome investors and professionals from around the world to explore new opportunities in this dynamic market. For more information on how you can benefit from these changes as a foreign investor in Mauritius, contact Blue Azurite now.
Tax reforms in Mauritius: A comprehensive guide for foreign investors
The Mauritius Budget for the fiscal year 2024-2025 heralds significant tax reforms aimed at nurturing a robust environment for foreign investors. These changes are strategically implemented to boost economic resilience, drive sustainable development, and align with global regulatory standards. Blue Azurite gives you a detailed overview of the key tax amendments and their implications for foreign investors considering Mauritius as a business destination. Corporate tax reforms Introduction of the Corporate Climate Responsibility (CCR) Levy A pioneering addition to the tax structure is the Corporate Climate Responsibility (CCR) Levy, which mandates a 2% levy on the profits of companies. This levy targets enhancing environmental sustainability but exempts companies with annual turnovers below 50 million Mauritian rupees. The revenue generated from this levy will fund initiatives to protect and restore Mauritius’ natural ecosystems and tackle climate change challenges. Revisions to the Partial Exemption Regime (PER) The Partial Exemption Regime (PER) has been modified to include: Adjustments for specific sectors Significant adjustments have been made for the medical, biotechnology, and pharmaceutical sectors. Income derived from intellectual property assets by companies in these industries will now be taxed at 15%, a substantial increase from the earlier rate of 3%. This adjustment is intended to conform to international taxation standards. Enhanced tax incentives for innovation and social contributions Expansive tax exemptions The government is committed to providing continuous support for digital and infrastructural innovation through the following measures: Additional deductions and credits Boosts for manufacturing and creative industries Incentives for Manufacturers An investment tax credit of 15% over three years will now include expenditures on AI and patents, recognizing these as critical components of modern manufacturing. Furthermore, recycling processes have been classified under manufacturing activities, making them eligible for existing manufacturing incentives. Expansion of the Premium Investor Certificate (PIC) The PIC has been extended to encourage private investments in the creative industry, covering new sectors such as concert venues and theaters. This move aims to stimulate the cultural sector, creating a more vibrant local economy. Reforms to the Freeport Act and VAT policies Freeport Act changes The amendments to the Freeport Act allow a company to hold both a Global Business Licence and a Freeport certificate, although such entities will not qualify for the tax holidays previously available to Freeport operators. VAT adjustments Enhancements to VAT (Value Added Tax) regulations include: Support for Green Initiatives The Mauritian government extends a 10% refund (capped at MUR 200,000) on the importation value of electric cars and goods vehicles until June 2025, promoting the adoption of environmentally friendly transportation options. Conclusion Overall, the Mauritius Budget 2024-2025 introduces transformative tax reforms that cater extensively to foreign investors. By aligning its tax policies with global standards and promoting sectors like technology, environmental sustainability, and the arts, the country is reinforcing its position as an attractive and progressive investment hub. These strategic changes promise to enhance the country’s economic landscape, making it an even more appealing destination for international business operations. If you’re looking to start a new business venture in Mauritius, learn how these reforms will impact your project by contacting Blue Azurite. Our team of experts is here to guide you through the procedures to make your business project a success.
India-Mauritius Treaty Protocol 2024: Understanding the implications for foreign investors
The revision of the India-Mauritius Treaty Protocol in 2024 marks a significant evolution in the financial relationship between India and Mauritius. These changes will likely affect the strategic decisions of global investors. Blue Azurite gives you an insight into specific financial impacts for a deeper understanding of the treaty’s implications. Historically, the India-Mauritius tax treaty has facilitated an estimated $8 billion annual investment flow into India, accounting for approximately 34% of FDI inflows over the past decade. The treaty’s appeal largely stemmed from Mauritius’ favorable tax regime, which has been pivotal in channeling investments into Indian markets. What are the major changes? Capital gains tax With the new treaty, for shares acquired from April 2024 onwards, capital gains will be taxed in India at 10%. This change is expected to impact investment returns, as previously, such gains were potentially taxed at a much lower rate or not at all in Mauritius. Capped tax on interest The tax on interest earned by Mauritian banks from Indian entities will be capped at 7.5%, down from the previous 20%. This aims to stimulate more competitive investment financing options. Sharing of information and compliance Enhanced cooperation between the tax authorities aims to crack down on illicit financial flows, estimated at $600 million annually prior to the treaty revision. Limitation of benefits The new Limitation of Benefits (LOB) clause requires entities to have a minimum spending of $1.5 million in Mauritius to benefit from the treaty, aiming to curb artificial tax avoidance structures. What this means for foreign investors The most obvious implication concerns tax management. Indeed, foreign investors need to anticipate higher tax costs in India and adjust their financial models and return expectations accordingly. Investors may also need to explore establishing genuine economic presences in Mauritius or consider alternative investment routes. Furthermore, the emphasis on transparency will require enhanced due diligence and reporting, ensuring investments are compliant with both Indian and Mauritian regulations. Overall, investors should consider diversifying their investment structures to mitigate risks associated with any single jurisdiction. Keeping abreast of regulatory changes and engaging with professionals, such as Blue Azurite, will be crucial to navigating the complexities of the revised treaty. Still, the reduction in interest income tax presents new financing opportunities. Investors could leverage this to fund large-scale projects in India at a reduced cost. The bottom line The India-Mauritius Treaty Protocol 2024 fundamentally alters the investment landscape, introducing both challenges and opportunities for foreign investors. It’s, therefore, important to understand these changes and adapt strategies accordingly in order to effectively manage risks and capitalize on new avenues for growth. Blue Azurite is here to help you navigate the possible impacts on your business venture. Contact our team of experts now for more information.
Offshore bank account: how to set up an account in Mauritius?
Despite the Covid-19 pandemic, Mauritius still remains an attractive destination among foreign investors to establish a business or expand one. You do not have to set foot in the island to open an offshore bank account. You can do so from anywhere else in the world with the help of our agents who are going to guide and assist you in taking the right decision regarding your finances. What is needed to set up an offshore bank account in Mauritius? First of all, it should be noted that each bank has their own set of procedures to open an account. In all cases, there is the usual verification of individuals. This requires certified copies of a passport and a recent utility bill. Reference letters from a current bank or substitute documents such as 6 months of current bank statements and a signed form allowing the Mauritian bank to contact the current bank are also needed. Moreover, since the key focus is going to be on the funds that will be coming in the bank account, it must be shown that the money is not coming from illegal activities and that the bank account or the company is not going to be used to launder money. You can expect that the business plan for any company account will be looked into in detail. How to successfully open an offshore bank account? Below are some key elements that must be taken into consideration if you wish to successfully open an account in the country and to enjoy the various benefits on offer. The Shareholders and the UBO All parties involved in the offshore bank account will have to go through KYC checks, especially those owning the company or account. If you have issues such as historical media attention, you can handle the situation by tackling it from the start. You must also bear in mind that it is easier to open a bank account in Mauritius if it is for a Mauritian company, not a foreign one. As such, you can set up a holding or trading company to benefit from the banking sector here if you are having trouble doing so with a foreign company. Preparation of the application The most successful applications are those with the client having an agent based in the country. This is because the latter is already aware of the procedures involved and it will have, beforehand, already asked the questions that the bank will ask. Therefore, the initial evidence will be smooth and comprehensive and the evidence will pre-empt any potential concern. If the first two issues are not in order, there might be some difficulties but opening an offshore bank account is still possible. There are many clients who have been able to get through these troubles provided that they have the right assistance. Picking up the right bank Picking up the right banks for your needs is essential. For instance, there are some institutions that are reluctant to take risks and others that are fintech-friendly. As such, when setting up a company in Mauritius, either with a Regulatory Sandbox Licence or a PIS licence dealing with cryptocurrency, you must seek guidance with regards to which bank is more likely to open an account . Some institutions are more appropriate for internet banking and others are quicker for account opening. You may also ask for help with your licence application. The Activity of the company or individual If your company’s activity is related to something illegal in Mauritius, then the possibility of it getting off the ground is practically non-existent. Some examples of those are cannabis oil, online gambling or weapons. The probability would also be low for risky operations such as cryptocurrency exchanges with clients predominantly from countries which makes banks nervous. This is because Mauritian banks are quite cautious regarding activities dealing with cryptocurrency, even if it is licenced by the FSC in Mauritius. One can, nonetheless, ask for dispensation from the FSC for a GBC to have a primary bank elsewhere, and there are now some banks in Mauritius that are more interested in fintech.
Covid-19 in Mauritius: what about foreign investors/entrepreneurs?
While we are currently in an economic crisis, it is very early to predict how the Covid-19 pandemic will impact the banking, financial and offshore sectors in Mauritius. At the time of writing, the virus has been contained in the island and but Mauritius is still in complete lockdown, which will have economic ramifications. So what options are there for offshore companies and bank account formations? What are the procedures that must be followed? Foreign businesses can set up several companies remotely Entrepreneurs, business owners and firms can establish bank accounts, companies and various types of Funds without even stepping foot in the island. These include Mauritian Business Registration of Global Business Companies (GBCs), Authorised Companies (ACs) and Mauritian domestic companies. More complicated financial licences, such as a Payment Intermediary Services Licence (a PSP in other jurisdictions), an Investment Dealer Licence, an Investment Adviser Licence and a CIS Licence can be obtained as well. Additionally, one can even invest in a property in Mauritius, set up an investment vehicle for buying the property and apply for a residence permit without coming the island. However, it is advised to liaise with a reliable firm, such as ours, to do so. What type of financial services can they benefit from? If you are living abroad and you want to establish a company in Mauritius, expand your business or you plan on moving to the island, it is not too early to look into the financial aspect of things. The following are some of the bank accounts that can be opened here: Personal offshore bank accounts for people living abroad. These can be set up in a few weeks as long as compliance tests are passed. Mauritian offshore bank accounts can be established for both Mauritian companies and foreign companies. These are very popular for firms incorporated in other locations such as Hong Kong, Dubai and Cyprus because of the strength and reliability of the banking sector in the country. It is worth noting that a company that is tax resident in Mauritius must have its primary bank account in the island. What currency can be used to open a bank account? To open a Mauritian offshore bank account, one of the main world currencies can be leveraged, therefore catering to several firms and individuals. As such, accounts can be created in EUR, GBP, USD and MUR. The internal exchange rate is very competitive with most of the banks and having multiple bank accounts is a significant benefit. Several institutions are licensed by the Bank of Mauritius, so there are various options to choose from. Some examples are ABC, Absa, AfrAsia, Bank One, HSBC, Maubank, SBM, MCB or Warwyck, among others. There are niche banks and international names which differ in size, capability and offerings. To know which institution would best suit your needs, how to open a bank account, the procedures to follow or how to set up a company, you can get in touch with our agents. They are trained professionals who are available to give you financial advice and guidance.
