Mauritius Budget brief 2019-2020: The transformative journey continues towards “embracing a brighter future”

The Honourable Pravind Kumar Jugnauth, Prime Minister and Minister of Finance and Economic Development of the Republic of Mauritius, on 10th June 2019 presented the National Budget, the last of the current Government’s mandate before the forthcoming general elections. Themed “Embracing a brighter future together as a nation”, the Budget pursues the approach of improving economic and social justice in the country and further modernising physical and regulatory infrastructures. It also aims to build an innovative environment favourable to smarter investment, with the overall objective of transforming Mauritius into a high-income economy.

With Brexit and trade wars causing a global economic uncertainty, the Government noted the resilience of the local economy. Indeed, unemployment rate has decreased, inflation has been kept steady, and the growth rate is expected to rise from 3.9% to 4.1% in 2020. To embrace “a brighter future”, the Budget has set out ten avenues on which to focus on:

  1. Strengthening the pillars of the economic growth;
  2. Consolidating the productive sectors while shaping a more democratised economy;
  3. Expanding our economic space while deepening regional integration;
  4. Building the infrastructure that matches the development vision;
  5. Deepening the national reform agenda;
  6. Reaching a higher social development path with a focus on gender mainstreaming and improving quality of life;
  7. Promoting a safer and more secure living environment;
  8. Facing the challenge of climate change and further building resilience of the environment;
  9. Building stronger foundations for the infrastructural development of Rodrigues, Agalega and Outer Islands; and
  10. Securing sound public finance and sustainable debts.

Mauritius is the leading African country when it comes to Ease of Doing Business. To further strengthen and improve the local business ecosystem for investors, the Budget highlighted a series of business facilitation measures, in alignment with international best practices. Although there were no major changes brought to the fiscal regime, the Budget announced positive measures to improve tax administration.

The Financial Services sector has seen, over the past few years, the introduction of multiple measures that aim to preserve the safety and trustworthiness of the Global Business sector, and establish Mauritius as a transparent and reputed International Financial Centre (IFC). The focus on good governance and increased enforcement powers given to the regulator are necessary to improve the credibility and reputation of Mauritius at an international level. This Budget is in line with previous ones, the Government also focuses on the development of innovative sectors such as Fintech and e-commerce, including a new regime for Robotics and AI-enabled financial advisory services and a new licence for Fintech service providers.

The Government has a diversification and expbudgetansion strategy for the Mauritius IFC. The new framework for Fund Administration and Fund Management, along with the review of the Special Purpose Fund regime, points out the commitment to facilitate the setting-up of funds in the Mauritian jurisdiction. Furthermore, the introduction on crowdfunding regulations shows that Mauritius wants to position itself at the forefront in the democratisation of sourcing of investors while supporting impact investment in the region. The aim is to establish the jurisdiction as a reliable and cost-effective Fund Administration platform, while easing access to new markets.

Anti-Money Laundering and Combatting the Financing of Terrorism is also high on the Government’s agenda. To further reinstate the position of Mauritius as a safe and transparent platform for cross-border investment and trade into Africa, the Prime Minister has announced the creation of the Financial Crime Commission.

This Budget builds on last year’s one and is encouraging, especially for international investors and the wider business community. The Government now needs to engage in the efficient and effective implementation of these measures to reach “the brighter future”.


Financial Services

Expanding the accessibility of financial products, internationally

  • A new framework for Fund Administration and Fund Management is being established.
  • The Special Purpose Fund regime is being revamped to facilitate access to new markets.
  • An agreement with the Gujarat International Finance Tec-City to authorise Mauritian licenced funds and management companies to operate in the jurisdiction of Gujarat.

Diversifying the product base of the Mauritius IFC

  • Introduction of new rules and enticing tax regime to encourage the development of Real Estate Investment Trusts (REIT).
  • Creation of an ‘umbrella licence’ for Wealth Management activities.
  • Introduction of a scheme for the headquartering of e-commerce activities.
  • An agenda for Green Finance consistent with the ‘Marrakech Pledge’ – a continental coalition of African Capital Markets Regulators and Exchanges committed to nurture green financing on the African continent.
  • Establishment of a new trading platform by the Stock Exchange of Mauritius to enable the medium-sized-profitable enterprises, which do not qualify for listing on the official and DEM markets, to raise capital and facilitate the trading of shares.

Business facilitation

Setting-up of a ‘single-window system’ at the FSC to allow for submission of documents and applications for Financial Services and Global Business.

Establishing Mauritius as a Fintech hub for the region

  • Establishment of a regime for AI-enabled financial advisory services and Robotics.
  • Introduction a new licence for Fintech Service providers.
  • Introduction of the use of e-signatures and e-licences on a pilot basis.
  • Crowdfunding as a new licensable activity through changes to the Financial Services Act.
  • Strengthening the Regulatory Sandbox Licence Framework in relation to Fintech activities.
  • Establishment of a Central KYC Registry with the collaboration of the Bank of Mauritius and the Financial Services Commission, through amendments to the Bank of Mauritius Act.
  • The Economic Development Board (EDB) will pursue consultations with the United Nations Office on Drugs and Crime together with relevant stakeholders in view of proposing the relevant amendments to the EDB Act to upgrade the Regulatory Sandbox Licencing Framework for Fintech activities.

Further developing the Financial Services sector

  • The BoM and the FSC will explore the convergence of Private Banking and Wealth Management licences.
  • The Partial Exemption Regime will be extended to cover other companies (see Partial Exemption Regime in the Taxation section below).
  • The limit on the number of shareholders permitted for private companies incorporated under the Companies Act will be reviewed.

Strengthening the regulatory framework to fight fraud, corruption and financial crimes

To increase investors’ confidence in our Financial Services sector:

  • Creation of a Financial Crime Commission (FCC) to ensure the coordination and coherence among the various investigative agencies, including ICAC, the FIU and the enforcement department of the Financial Services Commission;
  • Development, by the FSC, of a financial data handling code of conduct to address cyber risks; and
  • The BoM, FIU and FSC will present industry-wide Practice Notes pertaining to the handling clients’ requests.

Amendments to the Financial Services Act 2007

  • Setting-up of a FCC to carry out investigations and take measures to suppress financial crimes.
  • Greater enforcing powers to the FSC to allow the regulator to:
    • Appoint an administrator if it believes that the requirements attached to a licence are not being respected;
    • Have more independence in carrying out its duties;
    • Have access to any program or data, and be able to take excerpts of any files, documents or records held electronically;
    • Issue instructions with immediate effects to prevent any prejudice on clients of licensees; and
    • Protect whistle-blowers who makes a disclosure in good faith to the FSC.
  • Ensure the independence and empowerment of the Financial Services Review Panel such that an application to be reviewed no longer needs to be in the form and manner prescribed by the FSC.
  • FSC to regulate crowdfunding, Fintech Service Providers and Robotic Advisory Services.
  • Introduction of a scheme for the headquartering of e-Commerce activities in Mauritius.
  • Determining the tax residency for companies.


Improving the business ecosystem

To spur private investment, a new Business Facilitation Bill will be introduced and amend 26 legislations. These amendments will:

  • Speed up the start of businesses;
  • Remove unnecessary licences and permits;
  • Accelerate clearances at the port and airport; and
  • Align with international best practices when it comes to protecting minority investors and sharing of information.

To further improve the business environment for our investors and foster further economic development, the Government will implement the following measures:

Facilitating start of businesses and implementation of projects

  • Reviewing the process of payment of trade fees.
  • Ensuring efficiency and higher degree of compliance with construction permitting.
  • Streamlining of the licensing procedures.
  • Reviewing the processing of applications for work and residence permits by foreign citizens.

Trade Facilitation

  • Facilitating issue of import and export permits.
  • Reviewing clearance fees for ‘Other Tea Products’.
  • Working under one roof at Customs Office.
  • Providing enough time to Freight Forwarding Agents for customs formalities.
  • Maritime Single Window.
  • Implementation of a series of measures to improve Logistics Performance Index.

Alignment to International Best Practices

  • Measures targeted towards improving the safety net for minority investors, as recommended by the World Bank.
  • Resolving insolvency through amendments to the Insolvency Act.
  • Sharing of information to accelerate and facilitate doing business, through amendments to the Electronic Transactions Act
  • Establishment of a Regulatory Impact Assessment (RIA) framework for evidenced-based business-related rule making in collaboration with the OECD and funded by the EU.
  • Speeding up dispute resolutions.



Tax residency of companies

A company will not be considered as tax resident in Mauritius if it is centrally managed and controlled outside Mauritius.

Amendments to the Income Tax Regulations 1996

The Income Tax Regulations 1996 will be amended to address:

  • Detailed substance requirements for companies to benefit from the Partial Exemption Regime.
  • The conditions that a company which outsources its core income generating activities has to satisfy are:
    • The ability to demonstrate adequate monitoring of the outsourced activities;
    • The carrying out of outsourced activities in Mauritius; and
    • The economic substance of services providers must not be counted multiple times by multiple companies when evidencing their own substance in Mauritius.

Partial Exemption Regime

  • 80% Partial Exemption Regime applies to the following sources of income of Global Business Companies:
    • Foreign source dividend, if the dividend has not been allowed as a deduction in the source country;
    • Foreign source interest;
    • Profit attributable to a permanent establishment which a resident company has in a foreign country;
    • Foreign source income derived by a Collective Investment Scheme (CIS), Closed End Fund, CIS Manager, CIS Administrator, Investment Advisor or Asset Manager licenced or approved by the FSC;
    • Foreign income generated by a company engaged in ship and aircraft leasing; and
    • Any other income derived by Global Business Companies are taxed at the rate of 15% as from 1 January 2019.
  • Partial Exemption Regime will now cover companies engaged in:
    • Leasing and provision of international fibre capacity;
    • Reinsurance and reinsurance brokering; and
    • The sale, financing arrangement and asset management of aircraft including aviation related advisory services.

Anti-Abuse Rule

The introduction of Rules on Controlled Foreign Company (CFC) through amendments to the Income Tax Act 1995.

Tax holidays

The Government has announced the following tax holidays for different sectors:

  • 4-year tax holiday for income derived from bunkering of low sulphur heavy fuel oil.
  • 5-year tax holiday to companies setting-up an e-commerce platform in Mauritius prior to 30 June 2025.
  • 5-year tax holiday to Peer-to-Peer lending operators starting operation before 31st December 2020.
  • 8-year tax holiday to new companies involved in the development a new marina.
  • 8-year tax holiday, conditional on satisfying pre-defined substantial activities prerequisite in compliance with the Base Erosion and Profit Shifting (BEPS) Action 5 report, available to:
    • Newly set-up companies involved in innovation-driven activities on income derived from intellectual property assets developed in Mauritius; and
    • Existing companies, on income derived from intellectual property assets developed in Mauritius after 10th June 2019.


Making Headway on Africa Strategy

To expand Mauritius’ production space beyond its frontiers, partnerships with other African countries will be concluded. The Government will:

  • Build on the agreement with Mozambique towards the setting-up of a regional value chain for Liquefied Natural Gas.
  • Develop a Textile City on the 80 hectares of land (in Moramanga, Madagascar) the Malagasy Government has allocated to Mauritius.
  • Develop projects to take advantage of the Industrial and Technology Park in Naivasha, Kenya.
  • Consolidate the ongoing initiatives of Mauritius in the Special Economic Zones in Senegal, Côte d’Ivoire and Ghana.

Concerning cross-border financing, the Mauritius-Africa Fund will conclude strategic partnerships with Pan-African and international multilateral development financial institutions (such as the Trade and Development Bank, AFREXIM Bank and Fonds de Solidarité Africaine) to mobilise finance for the benefit of Mauritian enterprises willing to expand in Africa.


Review of the Freeport Regime

  • A Freeport operator engaged in manufacturing activities in the Freeport will be allowed to apply as private Freeport developer to build, develop and manage its own infrastructural activities if it carries out the same manufacturing activity.
  • Freeport operators or private Freeport developers engaged in the manufacture of goods will be liable to tax at the rate of 3% from sale of goods on local market.
  • Existing manufacturing companies having a Freeport certificate will have to meet additional substance criteria:
    • Employ a minimum of 5 employees; and
    • Incur annual expenditure exceeding MUR 3.5 million.
  • Freeport Operators will be liable to pay Corporate Social Responsibility (CSR) on sale of goods on the local market.



Post-study Work Visa

  • Introduction of a “Post-Study Work Visa” to allow international undergraduate students having studied in the fields of ICT, Fintech, AI and Biotechnology.
  • The “Post-Study Work Visa” will be valid for a period of 3 years after completion of studies.

Significant Employers Scheme (SES)

  • Introduction of the SES by the EDB that will replace the Foreign Manpower Scheme.
  • Foreign workers employed under this scheme will obtain an entry visa of not more than 3 months, allowing them to work while the Occupation Permit application is being processed.

Attracting talent from abroad

The capital expenditure requirement of USD 40,000 under the Innovator Occupation Permit for start-ups (guided by an accredited incubator) will be waived. Amendments to the EDB Act will be brought accordingly.

Occupation, Work and Residence Permits

  • Amendments to the Non-Citizens (Employment Restrictions) Act will see the introduction of a systematic timeline for assessing the completeness of Permits applications.
  • The schedule under the EDB Act for Occupation Permit will be reviewed.
  • The eligibility criteria will be clearly defined and guidelines will be introduced for Occupation Permit.
  • Monthly transfer required for retired non-citizens reduced from USD 2,500 to USD 1,500.

Although the level of public debt remains a concern for both for the government and of international organisations, we can note that the outlook for the country remains positive. Indeed, the Budget provides continuity from a fiscal perspective, encouraging in the building-up of a favourable investment climate. The transformative journey continues towards “embracing a brighter future”.


Mauritius Budget brief 2019-2020 - Country Outlook


Hon. Pravind Kumar Jugnauth, Prime Minister, Minister of Home Affairs, External Communications and National Development Unit, and Minister of Finance and Economic Development (2019). Embracing a brighter future together as a nation. [pdf] Ministry of Finance and Economic Development – Republic of Mauritius.



This article was prepared by Sunibel Corporate Services Ltd, and the information it contains are based primarily on the announcements made by the Minister of Finance and Economic Development in his Budget Speech. The measures announced in this Budget are subject to parliamentary discussion and approval, and may change upon enactment of the Finance Act in due course.

While all reasonable care has been taken in the preparation of this Budget Brief, no representation of warranty, whether expressed or implied, is given as to the accuracy or completeness of the information contained in this article, and, to the extent permitted by law, Sunibel Corporate Services Ltd, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in the article or for any decision based on it. You should not act upon the information contained in this publication without obtaining specific professional advice.

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