Mauritius National Budget Speech 2023/24

The Budget Speech of the Minister of Finance, Economic Planning and Development of the Republic of Mauritius on the 2^nd June 2023 was set against a back drop of economic recovery from the Covid-19 pandemic and under the theme ‘To Dare and To Care’. The National Budget of 2023/24 does not depart from the philosophy set by the Government over the past few years of better equity and social justice with a series of measures to provide more purchasing power to the Mauritian population. Furthermore, the budget speech is setting the stage for Mauritius to continue to improve its ease of doing business framework with a view to further attract investors and professionals to work in or from Mauritius. It is important to note that the macro-economic fundamentals indicate strong economic growth of 8%,  increased fiscal discipline with lower budget deficit than 2022/23 and the debt to GDP ratio moving under 75%. Investment in infrastructure namely in the road and light rail infrastructure, the national drainage system, renewable energy projects and social housing programs demonstrate the will of Government to make Mauritius a green, vibrant and modern island nation. The tone has been set in the budget speech to open the country to foreign talents with a clearly defined timeframe of 4 weeks for the determination of a work permit and the extension of the young professional occupation permit scheme to all sectors of the economy. The doing away of the solidarity levy and reform of the personal taxation system also goes along the direction of attracting skills and talents on the island.

 

Our view is that the focus on raising the quality of life of citizens is very important for social cohesion which is an essential ingredient for economic prosperity. These measures have been properly balanced with some key announcements linked to the further opening up of the economy to foreign investors and international players in the financial services sector as well as to professionals to support the growing economy. Mauritius is therefore consolidating its position as one of the best places to do business and to work and live whilst positioning itself as a strategic location within the investment and trade corridors of Asia and Africa. At the level of MITCO, we welcome the initiatives presented in the budget speech and we are open to discuss further on business structuring and investment opportunities in and through Mauritius.

 

Key highlights:

 

• To consolidate the position of the Mauritius International Financial Centre:

i. The scope of the Variable Capital Companies will be extended to allow their use for family offices and wealth management;

ii. A new framework to support the licensing and operation of Electronic Money Institutions (EMI) will be introduced; and

iii. A Wealth Manager and Family Office licence under Private Banking will be introduced;

 

• The Securities Act will be amended to enhance the attractiveness of Mauritius as a Fund domicile by allowing Funds to invest in loans or similar debt instruments.
• The partial exemption granted in respect of interest earned by a Collective Investment Scheme or a Closed End Fund established in Mauritius will be increased from 80% to 95%.
• Interest income derived from bonds, debentures or sukuks issued by an overseas entity to finance renewable energy projects (“Green Bonds”) approved by the Director-General of the Mauritius Revenue Authority (MRA) will be exempted.
• The MRA will not recover tax owed by a cell of a protected cell company by having recourse to assets of other cells or non-cellular assets of the protected cell company. Likewise, each sub-fund or special purpose vehicle of a variable capital company will be treated as a separate entity for the purpose of recovery of tax.
• The solidarity levy is being removed and personal income tax will be progressive with a maximum income tax of 20%.The Digital Rupee will be rolled out in November this year on a pilot basis.
• To promote Mauritius as an International Open Flag Registry Centre, the Ship Registry Regime will be revamped.
• Tax Deduction at Source will not apply on fees paid to a Management Company licensed by the Financial Services Commission (FSC) and an Investment Adviser licenced by the FSC.
• The Companies Act will be amended to –
• clarify that service address of a company has to be in Mauritius;
• establish a time limit of one month from the date of resignation or death of the last remaining director, for shareholders of a company to appoint new directors, failing which the Registrar of Companies will remove that company from the Register;  
• require a company to send its annual report to shareholders at least 21 days, instead of 14 days, prior to the annual meeting;
• enable a company to send its annual report and financial statements electronically coupled with a right for shareholders to request for a hard copy of the documents; and
• provide that a meeting of shareholders and voting may be done in such manner as the Registrar of Companies may approve.
• The Virtual Asset and Initial Token Offering Services Act will be amended to –
• allow a Virtual Asset Custodian to also hold custody of securities tokens;
• remove the requirement for an applicant to be considered as issuer of initial token offerings to submit an approval letter, in respect to the initial token offerings, issued by the virtual asset exchange or its equivalent acceptable to the FSC; and
• empower the FSC to make Rules for the setting up of a Virtual Asset Register on virtual asset service providers.
• The occupation permit will be streamlined: -

i. The threshold for occupation permit for professionals will be reduced to Rs 30,000;

ii. An applicant for an occupation permit will be allowed a business visa of 120 days without having to leave Mauritius;

iii. Obtaining an occupation permit will no longer be conditional on having a local bank account;

iv. The Young Professional Occupation Permit will be opened to all fields of study;

v. A silent is consent provision of 4 weeks will be introduced for registration of foreign professionals with professional bodies including the medical, dental and veterinary councils; and

vi. Work permits will be deemed to be approved four weeks of the application on the silent agreement principle.

 

• To encourage the adoption of e-signatures, Information and Communication Technologies Authority will now recognise Certifications including DocuSign and Adobe Sign.
• To better positioning Mauritius as an ESG-rated investment destination platform, ESG-related projects will be included under the Premium Investor Certificate Scheme.