MAURITIUS BUDGET 2017 – 2018 HIGHLIGHTS The Budget speech 2017-2018 entitled “Rising to the challenge of our Ambitions” was presented on the 8th June 2017 by the Prime Minister and Minister of Finance and Economic Development, Hon. Pravind Kumar Jugnauth. The measures enunciated build upon those announced in the last year’s budget, reflecting a continuation of the Government’s vision to ward off the middle-income trap through sustainable actions aimed at improving our productive capacity. We are pleased to provide you with a summary of the different measures that we believe are going to be important in enhancing substance and consolidating the global business sector.

A. FINANCIAL SERVICES

1. Global Business Sector Elaboration of a 10-year blueprint by the Ministry of Financial Services, Good

Governance and Institutional reforms to cater for the forthcoming international challenges arising within the international financial services industry.

In order to take the Global Business Sector to the next level, based on the quality of product offerings and enhance the reputation of Mauritius as a jurisdiction of substance, the guidelines for Category 1 Global Business Companies “GBC1” will become more stringent. Now onwards, GBC1 companies will be required to fulfil at least 2 of the 6 additional substance requirements introduced by the Financial Services Commission “FSC” as from 2014.

Alignment of the Special Purpose Fund rules by the FSC with those of the GBC1

companies. Reform of the tax regime for global business companies to meet new international

requirements.

2. Islamic Finance Amendment to the Companies Act 2001 to allow for Islamic Financial Institutions

and Islamic Banks to adopt accounting standards issued by the Accounting and Audit Organisation for Islamic Financial Institution.

3. The Stock Exchange of Mauritius The Stock Exchange of Mauritius (SEM) to engage with Euroclear to transform the

local debt market and to set up an international capital market so as to attract Governments and corporates from Africa and other regions to issue multi-currency bonds in Mauritius.

4. Banking Sector Amendment of the Banking Act 2004 to raise minimum capital requirement of banks

from MUR 200 million to MUR 400 Million. Existing banks will be given a moratorium of two years to adjust their capital.

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B. Fintech hub- Mauritius

Positioning Mauritius as a Fintech Hub for Africa to harness the benefits of the emerging technologies and services.

Establishing a Regional Fintech Association by the Economic Development Board to act as a ‘think-tank’ for Fintech projects, and partnering with international institutions such as Innovate Finance London and the Fintech Circle to create the right ecosystem and complying with international regulatory requirements.

Provisioning of the appropriate regulatory framework for Fintech activities such as peer –to-peer lending and funding, and mobile wallet.

C. Business Facilitation and Investment

1. Occupation Permit

High tech machines and equipment brought by a foreign investor will henceforth be considered as part of the minimum investment of USD 100,000 required to obtain an Occupation Permit subject to complying with existing set criteria.

The introduction of an ‘’Innovator Occupation Permit’ for innovative start-ups with a minimum operational expenditure of 20% for research and development purposes.

Eligibility to a Residence Permit for retired non-citizens transferring at least USD 2,500 monthly to Mauritius

Amendment to the Invest Hotel Scheme (IHS) to allow a Non – Citizen buyer investing at least USD 500,000 in the acquisition of a unit to be eligible to a residence permit so long as he retains ownership of the Unit. Acquisition of a unit under the HIS will be governed by the standard provisions of the Code Civil Mauricien.

Grant of Multi Entry Visa for a maximum of 180 days per year for a consecutive period of 5 years (renewable) to non-citizens who have acquired residential property below USD 500,000.

2. Work Permit Reduction in the timeframe for issuance and renewal of work permits from 40 days

to 15 working days. Extension of the 8-year work permit policy for all expatriate workers in export-

oriented enterprises in the manufacturing activities, construction, furniture making and agro industry.

Introduction of a short-term bridging work permit in cases of delays in renewal of work permits.

D. Fiscal Measures

1. Corporate Tax Reform Profits from export of goods taxed at the lower rate of 3% instead of 15% for

domestic enterprises. 8-year income tax holiday for new companies engaged in the manufacturing of

pharmaceutical products, medical devices and high tech products. 8-year income tax holiday for new companies involved in innovation-driven activities

on income derived from the totality of Intellectual Property Assets. 8-year income tax holiday for companies in the exploitation and use of Deep Ocean

Water for providing air conditioning installations, facilities and services.

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Businesses will be able to deduct the investment in solar energy units from their taxable income.

All interests income from debentures issued to finance renewable energy projects and which are approved by the MRA will be exempted from tax.

Elimination of the Registration Duty and Land Transfer Tax on immovable property to be utilised for the setting up of qualifying high-tech manufacturing activities.

Disclaimer The above information has been sourced from the Budget speech delivered by the the Prime Minister and Minister of Finance and Economic Development to the National Assembly on 8th June 2017. The content of this summary has been solely sent to you to provide you with an oversight of the measures that have been contemplated and does not in whatsoever circumstances purport to be any investment, tax or legal advice. Professional advice should be sought before acting on the tenor of these highlights.

For further information, please do not hesitate to contact:

Kamal Iyaroo: kamal.iyaroo@tripro.mu/

or Christiane Yeung:

Christiane.yeung@tripro.mu

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