- October 18, 2023
- Posted by: Aurélie
- Category: Investment
A vibrant island nation in the Indian Ocean, located at the crossroads of Africa and Asia, Mauritius attracts foreign investors from all over the world. Thanks to its growing economy, its multiculturality, as well as the numerous economic opportunities available, the island has made its name among the most popular destinations for investment. But before you indulge in a new venture, let us look at the essential factors to consider before investing in Mauritius.
While there are many investment opportunities in Mauritius, choosing one that aligns with your vision and long-term goals is important. Below are some of the key sectors that are actively seeking foreign investment:
- Tourism, including hotels, resorts, travel agencies, adventure tourism;
- Real estate, through various schemes, such as the Integrated Resort Scheme (IRS) and Real Estate Scheme (RES), the Property Development Scheme (PDS), the Invest Hotel Scheme (IHS), etc.;
- Financial services, with interesting openings in banking, insurance, asset management, and fintech;
- Information Technology, thanks to the growing need for software development, IT services, e-commerce, and outsourcing;
- Renewable energy, including solar, wind, hydro, and other projects.
Once you have identified the sector that best suits your investment project, conduct a thorough market analysis to assess the demand and growth potential, as well as any competition. We will discuss this point further below.
In Mauritius, GDP growth has long been driven by sectors such as tourism, financial services and textiles. However, the government has been actively implementing policies over the past decade to diversify the economy. Such steps aim not only at boosting economic growth and international trade but also at attracting more foreign investment. Overall, Mauritius is world-renowned for its ease of doing business, constantly topping the rankings in Africa. However, although the island has a range of investor-friendly policies in place and a streamlined bureaucracy, you will still need help to understand and tackle a series of formalities relating to starting your business.
Legal and regulatory framework
As mentioned above, Mauritius has a favorable legal and regulatory framework for the establishment of companies by foreign investors. This includes a series of free trade agreements and incentives for foreign investment, along with laws governing investments, income and corporate tax, as well as property rights and other industry-specific regulations. All these guarantee transparency and security for your assets. It’s also worth noting that the Mauritian legal system is based on English common law and French civil law.
Taxation and incentives
Mauritius is known for its favorable tax system, with various incentives for foreign investors. For instance, by starting a business in the country, you will likely benefit from very low corporate income tax rates, as well as double taxation avoidance agreements (DTAs) signed with several countries, not to mention the absence of withholding tax on dividends, interest or royalties for non-residents. Those investing under the Global Business Licence (GBL) Category 1 are exempt from taxes, while those investing under Category 2 benefit from a reduced corporate tax rate. Moreover, foreigners investing in Mauritius’ freeport zones enjoy tax exemption from customs duties and value-added tax (VAT) on goods for re-export. Special Economic Zones (SEZs) also offer similar tax benefits. Still, it’s important to carefully consider the requirements to be met for these incentives with the help of professionals.
Market impact strategy and competition analysis
Once you have decided on the type of business you want to create in Mauritius, it’s essential to develop a market impact strategy. As a foreign investor, you are probably unfamiliar with the demand for your product or service in the Mauritian market. Thorough market research and analysis will, therefore, help you understand the dynamics of the local market, current trends and consumer behavior, among others. This will also ensure that your business is compliant with the Mauritian legal and regulatory framework. One of the ways to achieve this is to hire local talent who already have a good understanding of the market and can create links with the different stakeholders.
There are, of course, other important factors to consider, such as infrastructure and connectivity, including communication networks, utilities and energy supply, etc., to ensure your business operations, as well as risk assessment. For example, your activity might be vulnerable to economic downturns, currency fluctuations, or even regulatory changes. The cost of starting a business in Mauritius should not be underseen either.
Although Mauritius has a stable political and social environment, foreign investors need to consider all aspects that are likely to affect their activity in Mauritius.
The good news is that you’re not alone in this venture. Blue Azurite is here to guide you, from assessing the risks and benefits of starting a business in Mauritius to understanding Mauritian laws and regulations. Our team of experts assists you on every step of your projects, including choosing the most appropriate structure for your business. Get in touch with us now for more information.