August 22, 2019


We have included some of the measures in this month’s e-News:


Amendments to the Companies Act 2001

  • Public Company: There shall be at least one woman appointed on the Board of a public company.
  • Private Company: The maximum number of shareholders of a private company has been increased from 25 shareholders to 50 shareholders.

Amendments in the Financial Services Act


The definition of “Officer”

The definition of officer now includes a Money Laundering Reporting Officer (MLRO), a Deputy MLRO and a compliance officer.

  • Global Business Companies

In the last budget 2018-2019, the Section 71(3) (a) of the Financial Services Act has been amended and Global Business Companies were required to carry out their Core Income Generating Activities (“CIGA”) in or from Mauritius by:

  • Employing directly or indirectly, a reasonable number of suitable qualified persons to carry out the core activities; and
  • Having a minimum level of expenditure, which shall be proportionate to the level of activities

Now in the budget 2019-2020, the definition of CIGA has been amended as follows:

“Carry out its core income generating activities in, or from Mauritius as required under the Income Tax Act. “

We shall provide you with more details once we receive the conditions associated to the CIFA in or from Mauritius.

  • Authorised Company: The Authorised Company (AC) will now be required to have their central management and control outside Mauritius. Previously, the AC were required to demonstrate their place of effective management outside Mauritius.


The Controlled Foreign Company (“CFC”) Rules:


CFC is a company:

  • which is not resident in Mauritius;
  • in which more than 50% of its total participation rights are held directly or indirectly by the resident company or together with its associated enterprises; and
  • which includes a permanent establishment of the resident company

Where a resident company carries on business through a CFC and the Director-General of the Mauritian Authorities considers that the non-distributed income of the CFC arises from non-genuine arrangements which have been put in place for the essential purpose of obtaining a tax benefit, that income shall be deemed to form part of the chargeable income of the resident Company.

An arrangement shall be regarded as non-genuine to the extent that the CFC would not own the assets or would not have undertaken the risks which generate all , or parts of, its income if it were not controlled by a company where the significant people functions, which are relevant to those assets and risks, are carried out and are instrumental in generating the controlled company’s income.

The definition of tax benefit means the avoidance or postponement of the liability to pay income tax or the reduction in the amount thereof.

CFC rules are not applicable where in an income year:

  • accounting profits are not more than EUR 750,000 and non-trading income is not more than EUR 75,000;
  • accounting profits amount to less than 10% of its operating costs for the tax period; or
  • the tax rate in the country of residence of the CFC is more than 50% of the tax rate in Mauritius


Freeport Activities


It is now possible for a company issued with a freeport certificate before 14 June
2018, in relation to the carrying out of a manufacturing activity, subject to the approval of the Economic Development Board (“EDB”), be authorised to build, develop and manage its own infrastructural facilities as a private Freeport developer provided the company is carrying out the same manufacturing activity.

  • Freeport operator/private Freeport developer which is engaged in manufacture of goods will be subject to income tax rate of 3% on profits derived from sale of goods on local markets.
  • Manufacturing companies in the Freeport will have to meet prescribed substance criteria to benefits from the tax rate at 3%. We will provide more details once the Regulations are issued.
  • Corporate Social Responsibility (“CSR”), will be applicable on income generated from the sales of goods on the local market.


The Introduction of the “e-commerce Scheme”


An e-Commerce Scheme will be introduced by the EDB whereby a successful applicant will be granted an E-Commerce certificate. Companies setting up an e-commerce platform in Mauritius prior to 30 June 2025 and being a holder of an E-commerce certificate, granted by the EDB will benefit from a five-year tax holiday, subject to meeting certain criteria as stated in the Income Tax Act.

The EDB is yet to finalise the Scheme and more details will be communicated once finalized.