This highlight sets out the changes to the laws brought by the Act which are relevant to the Global Business sector.

To align the Mauritius International Financial Centre to international norms and standards pertaining to AML/CFT and meet the Financial Action Task Force (FATF) requirements, the Anti-Money Laundering and Combatting the Financing of Terrorism (Miscellaneous Provisions) Act 2020 (the “Act”) was approved by the Mauritian Parliament and came into force on 9 July 2020. This highlight sets out the changes to the laws brought by the Act which are relevant to the Global Business sector.

Changes to the Companies Act

  • Access to beneficial ownership information – Companies registered in Mauritius were already required to disclose information on their beneficial owners (BO) or ultimate beneficial owners (UBO) to the Registrar of Companies and record same in their share register where the shares were held by a nominee shareholder. The Act has further expanded the definition of the term ‘nominee shareholder’ to put emphasis on those BO/ UBO who exercise their right through the nominee shareholder indirectly through the agency of one or more persons.
  • Beneficial ownership information shall be lodged with the Registrar (i) at the time of incorporation of a company; (ii) at the time of registration of a foreign company; (iii) at the time of registration by way of continuation of a company; (iv) on filing of the annual return of a domestic company; (v) in the case of a foreign company, on filing the financial statements of the company; (vi) upon any change, including transfer, in the shareholding of a company; (vii) at the time of an issue of shares. Upon any change, including transfer, in the shareholding of a company or at the time of an issue of shares, beneficial ownership information shall be filed to the Registrar within 14 days from the date by which any entry or alteration is made in the share register.

This obligation will apply where shares of the company are held by a nominee shareholder.

  • The Act also requires designation of an officer (ordinarily resident in Mauritius) to provide, upon request by any competent authority, all basic information and beneficial ownership information of the company. The Registrar shall be notified upon designation or change of the officer, within 14 days.
  • In addition to the name and registered address of a private company holding a Global Business License (GBL) or an Authorised Company, a person may on payment of a prescribed fee have access to the proof of incorporation, legal form and status of the company and its basic regulating powers and list of directors at the Registrar of Companies office.
  • Failure to comply with the requirement to furnish beneficial ownership information to the Registrar of Companies shall amount to an offence and shall, on conviction, be liable to a fine not exceeding MUR 300,000 rupees. The Registrar of Company may further strike off a company if it fails to disclose beneficial ownership information.
  • The terms BO/UBO have been extrapolated under the Companies Act and are extended to the Foundation Act, Limited Liability Act and Limited Partnership Act. Beneficial ownership information pertaining to limited liability partnerships, limited partnerships and foundations, shall be disclosed to the Registrar of Companies upon the incorporation and registration of any such entity, and at the time of making certain mandatory filings. This obligation will apply where shares/beneficial interest of the partnerships/ foundations are held by a nominee.

Changes to the Financial Intelligence and Anti-Money Laundering Act

  • The timeline for financial institutions and reporting person for filing a suspicious transaction report to the Financial Intelligence Unit (FIU) has been reduced from 15 days to 5 working days after the suspicion arose. Failure to do so shall be an offence and shall, on conviction, be liable to a fine not exceeding MUR one million rupees (USD 25000) and to imprisonment for a term not exceeding 5 years.
  • The FIU has been empowered to issue guidelines to auditors, reporting persons and internal controllers of credit unions.
  • New provisions have been enacted to facilitate exchange of information among regulatory and supervisory agencies in Mauritius, further regulate sectors such as jewellery, real estate, gambling and cooperative societies for AML/CFT purposes, increase the fines and penalties relating to AML/CFT offences and propounding a risk-based approach to supervision.

Changes to the Financial Services Act (FSA)

  • Section 23 of the FSA has been amended to provide that approval of the Commission shall not be required in respect of the issue or transfer of non-voting shares of CIS or CEF and reporting issuers that do not hold a financial services licence but whose securities are listed on a Securities Exchange in Mauritius.
  • The Commission can carry out onsite inspections on the business premises of a licensee or such other place at its discretion and the frequency for the on-site inspections shall be determined but not limited, by the money laundering or terrorism financing risks present.

Post the presentation of the National Budget 2020/2021 on 04 June 2020, entitled ‘Our New Normal: The Economy of Life’, The Finance (Miscellaneous Provisions) Act 2020 (the Act) was promulgated on 07 August 2020. The Hon. Minister of Finance of the Republic of Mauritius has announced a number of measures to ensure economic resilience and sustainable development subsequent to the economic situation brought by Covid-19.

This article highlights the key regulatory and fiscal amendments brought in the Act together with the date of effectiveness.

Financial Services Act

  • The functions of Financial Services Commission Mauritius (‘FSC’ or ‘the Commission’) has been extended to include the following:
  1. The Commission may request competent authorities or any other entity (which includes Ultimate and intermediate financial holding Mauritian companies which have, within the group, at least one subsidiary or joint venture or such ownership structure which holds a licence by the Commission) to furnish to the Commission with the necessary statistical information within such time frame as may be prescribed by the Commission; and
  2. The Commission shall consult and with the approval of the competent authorities, collect the required information from the relevant entities, where the information requested under the above is not furnished within the time frame determined by the Commission.
  3. The following new business activities have been introduced under the Financial Services Act:

1. Moneylender

  • A ‘moneylender’ is a person, other than a bank or a non-bank deposit taking institution, whose business is that of moneylending or who provides, advertises or holds himself out in any way as providing that business, whether or not he possesses or owns property or money derived from sources other than the lending of money, and whether or not he carries on the business as a principal or as an agent.
  • This licence shall be provided by the Commission only to a corporate entity engaged in such business activities in Mauritius.
  • Each moneylender shall comply with the prudential requirements, guidelines, instructions or directives as specified by the Commission.
  • As part of its regulatory duties, FSC Mauritius may appoint a duly qualified person or an officer to carry out inspections on the operations and affairs of the moneylender to ensure that the moneylender is complying with the financial services laws and guidelines.
  • Any person who contravenes the laws pertaining to moneylenders under the Financial Services Act shall commit an offence and shall be liable to a fine not exceeding one million rupees and to imprisonment for a term not exceeding 5 years.

2. Peer-to-Peer Lending

  • “Peer-to-Peer Lending” is defined as a financial business activity which enables a person to lend funds through an online portal or electronic platform which matches lenders and borrowers. Henceforth, a licensee who intends to surrender his license to the Commission, he must abide by the following:
  • Give notice to the Commission of the proposed surrender date on not less than 30 days before the date of the proposed surrender;
  • Make arrangements for the transfer of its business to another licensee prior to giving notice;
  • After the date of surrender, the licensee must certify to the Commission that all his client accounts have been transferred;
  • Provide the Commission with a written undertaking by the transferee that the business has been transferred to it; 
  • With respect to the discharge of his liabilities, the licensee must specify the measures taken by him;
  • The effective date of termination must be specified; and
  • The licensee must comply with other matters as required by the guidelines.

With respect to the reporting obligations of FSC’s licensees, the Commission may extend the period of filing the licensee’s Annual Financial Statements (AFS) during an emergency period. ‘Emergency period’ is defined as:

  • A period of public emergency (as referred in Chapter II of the Constitution);
  • A period during which a curfew order is placed or similar restriction on the movement of persons; or
  • A period where Mauritius has been affected by a natural disaster.

A person or any class of persons required to file it’s AFS, may be exempted if the Commission is of the opinion that it would not be practicable for that person or class of persons to comply with this obligation.

Companies Act

An independent director is defined as an executive director with the following characteristics:

  • He must not be an employee of the company;
  • He must not have material business relationship with the company either directly or as a partner, shareholder, director or senior employee of an organisation that has such relationship with the company;
  • He must not receive remuneration from the company except remuneration or any other benefit given to him as a director in accordance with the Companies Act;
  • He must not be a nominated director representing a substantial shareholder;
  • He must not have close family ties with any of the advisers, directors or senior employees of the company;
  • He must not have cross directorships or significant link with other directors through involvement in other companies or other organisations; or
  • He must not have been on the Board for more than 9 continuous years from the date of his first election.

As from 01 January 2021, the Board of directors of a public company shall include at least 2 independent directors.

With respect to the duties of directors to act in good faith and in best interests of the company, the director must act in a manner which is not, oppressive, unfairly discriminatory, or unfairly prejudicial to shareholders. Any director who fails to act in good faith under the Companies Act, he shall commit an offence and shall, on conviction, be liable to a fine not exceeding 100,000 rupees and to imprisonment for a term not exceeding 12 months. Henceforth, Registrar shall give notice in the Gazette and by any electronic means prior to restoring any company in their register instead of giving public notice in 2 daily newspapers.

(Effective date: 07 August 2020)

Immigration Act

  • In order to obtain a Resident Permit in Mauritius, the minimum investment has been reduced from USD 500,000 to USD 375,000.
  • The Mauritius Permanent Residence Permit, which allows an eligible non-citizen of Mauritius to live and work in Mauritius, has been extended from 10 to 20 years.
  • Any person who holds an Occupation Permit or Residence Permit for at least 3 years before 1 September 2020 may apply for a Permanent Residency Status upon satisfaction of criteria in Part III of the first Schedule of the Economic Board Act 2017.
  • For an investor or a self-employed non-citizen, Occupation Permits issued for a period of 3 years and which is still valid as at 01 September 2020, shall be extended for a period of 10 years as from the date of the issue of the permit.
  • Holders of an Occupation Permit as professionals or Residence Permit as a retired non-citizen may invest in any business given that he is not employed in the business, does not manage the business and does not derive any salary or employment benefits from the business. The holder may hold shares in a business where he/she is employed provided that he/she is not a majority shareholder.
  • Any Occupation Permit holder will be allowed to bring their parents to live in Mauritius. (Effective date: 02 September 2020)

CORPORATE TAX

Tax incentives

  • Where, in an income year, a person has incurred capital expenditure on electronic, high precision or automated machinery or equipment on or after 1 July 2020, he shall be allowed, in that income year, a deduction of that capital expenditure, provided no annual allowance has been claimed.(Effective date: Year of assessment commencing 1 July 2021)
  • Where, in an income year, a person engaged in medical research and development incurs expenditure on medical research and development, he may deduct from his gross income twice the amount of that expenditure in that income year provided the research and development is carried out in Mauritius. No further deduction can be claimed as annual allowance. (Effective date: Year of assessment commencing 1 July 2021)
  • Where, in an income year, a company incurs expenditure for the acquisition of patents and franchises and costs to comply with international quality standards and norms it may deduct, from its gross income, twice the amount of such expenditure incurred in that income year. No further deduction can be claimed as annual allowance.(Effective date: Year of assessment commencing 1 July 2021)
  • Where, during the period 1 July 2020 to 30 June 2023, a manufacturing company incurs capital expenditure on new plant and machinery, it shall be allowed, in the year of acquisition and in each of the 2 subsequent income years, a tax credit of an amount equal to 15% of the cost of the new plant and machinery.(Effective date: 07 August 2020)

Tax Holidays

  • Income derived from inland aquaculture in Mauritius, by a company which has started its operations on or after 4 June 2020, for a period of 8 successive income years starting from the income year in which the company has started its operations.(Effective date: 07 August 2020)
  • Income derived by a company which has started its operations in Mauritius on or after 4 June 2020 and approved by the Higher Education Commission as being a branch campus of an institution which ranks among the first 500 tertiary institutions worldwide whose ranking at the time of registration, for a period of 8 successive income years starting from the income year in which the institution has started its operations.(Effective date: 07 August 2020)
  • Income derived from the manufacturing of nutraceutical products by a company which has started its operations on or after 4 June 2020 for a period of 8 successive income years starting from the income year in which the company has started its operations.(Effective date: 07 August 2020)

Additional investment allowance to companies affected by COVID-19

Where a company has, during the period 1 March 2020 to 30 June 2020, incurred capital expenditure on the acquisition of new plant and machinery (excluding motor cars), it shall, in addition to annual allowance claimed on the asset, be allowed a deduction of 100% of the capital expenditure so incurred by way of investment allowance in respect of the income year in which the expenditure is incurred.(Effective date: 07 August 2020)

Solidarity Levy on telephony service providers

The levy under shall be calculated at the rate of 5% of the accounting profit and 1.5% of the turnover of the operator in respect of the year of assessment commencing on 1 July 2020 and will be made permanent.(Effective date: Year of assessment commencing 01 July 2020)

Life insurance companies

Tax payable by a company deriving income from life insurance business, shall be the normal tax payable; or 10 per cent of the relevant profit whichever is the higher. The ‘relevant profit’ means profit after tax and after adjusting capital gain/loss.(Effective date: Year of assessment commencing 01 July 2021)

Extension of time for payment of corporate income tax for companies operating in the tourism industry

Any company engaged in an activity in the tourism industry having an accounting period ending on any date during the period September 2019 to June 2020 will be granted an extension to pay the tax as follows:

  1. half of the tax on or before 29 December 2020; and
  2. the remainder on or before 28 June 2021

Any tax payable by the above named companies under APS which falls during the calendar year 2020, shall pay tax as per the extended delay specified above.(Effective date: 07 August 2020)

PERSONAL TAX

Solidarity Levy

  • A tax resident individual shall be subject to Solidarity Levy at the rate of 25% of his leviable income in excess of MUR 3 million.
  • However, the solidarity payable by an individual in an income year shall not exceed 10% of the sum of his net income excluding the lump sum but including dividends received from resident companies or co-operative society and share of dividends in a resident société or succession to which he would have been entitled as an associate of a societe or heir in a succession.(Effective date: Income year commencing 01 July 2020)

Pay As You Earn (PAYE)

Where the emoluments under the PAYE system exceeds MUR 230,769 in a month, the employer shall withhold an additional tax on the amount exceeding MUR 230,769 at the rate of 25%, provided that the additional tax withheld does not exceed 10% of total emoluments.(Effective date: 01 July 2020)

Deduction for bedridden dependent

  • Where, in an income year, a person claims a bedridden next of kin as a dependent, no other person shall claim that bedridden next of kin as a dependent in that income year.
  • “Bedridden next of kin”, in respect of a person, means the bedridden father, mother, grandfather, grandmother, brother or sister of that person or of his spouse provided that the bedridden next of kin is eligible to the carer’s allowance payable under the National Pensions Act and under the care of that person.(Effective date: 01 July 2020)

Contribution Sociale Generalisé (CSG)

  • Every participant and every employer of a participant, as applicable, shall pay the CSG to the Director-General at such rate as may be prescribed and in such manner, and at such times, as may be prescribed.
  • The rate of the CSG for an employee shall be in respect of such remuneration as may be prescribed.
  • “participant” means –
  1.  an employee of such category as may be prescribed;
  2.  a self-employed of such category as may be prescribed; or
  3.  a person of such category as may be prescribed who is liable to pay the CSG
  • The employer of a participant shall, at the time of paying to the participant his remuneration for any period, deduct from the remuneration of the participant the CSG and remit that CSG to the Director-General.
  • Every employer shall, in respect of CSG paid, submit an annual return or monthly return, as the case may be, in such form and manner, and at such times, as may be prescribed.
  • The CSG shall be payable in respect of the month of September 2020 and for every subsequent month.
  • Any CSG, including any penalty and interest, collected by the Director-General shall be credited to the Consolidated Fund.
  • No contribution shall be payable to the National Pension Fund after 31 August 2020.
  • Where an employer fails to pay to the Director-General the whole or part of any CSG, he shall be liable to pay to the Director General –
  • Penalty of 10% of any CSG remaining unpaid; and (b) Interest at the rate of 1% per month or part of the month during which the CSG remains unpaid.(Effective: 01 September 2020)

Assessments on employers and participants

  • Where the Director-General has reason to believe that an employer or a participant has not paid the appropriate amount of CSG, he may claim the amount of CSG due by giving the employer or the participant written notice of assessment
  • Where an assessment is made, the amount of CSG claimed shall carry a penalty not exceeding a percentage to be prescribed of the amount of additional CSG claimed.
  • Where the Director-General has given notice of assessment, the employer or the participant, shall pay the CSG specified in the notice within 28 days of the date of the notice of assessment

Where an employer or a participant is dissatisfied with a notice of assessment he may, within 28 days of the date of the notice of assessment, object to the assessment in a form approved by the Director General and sent to him by registered post or electronically.

Occupation Permits (Ops)

  • OPs were issued for an initial period of 3 years but this has now been extended to 10 years for both the Investor OP and Self-employed OP.
  • For the Professional OP, the validity period remains unchanged i.e. it will still be issued for an initial period of 3 years.
  • At the expiry of their OPs, non-citizens can either renew their OPs or consider applying for a Permanent Residence (PR), subject to meeting the required conditions.
  • The validity of the PR has been doubled to 20 years

The changes are effective as from 1 September 2020

Investor OP

Eligibility Criteria for OP

  • The minimum investment to be made by investors has been reduced from USD 100,000 to USD 50,000.
  • The renewal criteria has also been relaxed and the OP will henceforth be renewed if the company generates a minimum gross income of MUR 4 million (circa. USD 114,000) per year as from third year of registration – prior to the Finance Act 2020, the company had to generate a cumulative turnover of at least MUR 12 million (circa. USD 342,800) during the 3 years preceding the application for the renewal of the occupation permit and with a turnover of at least MUR 2 million (circa. USD 57,000) per year

Professional OP

Eligibility Criteria for OP

  • Foreign professionals operating in other sectors will be eligible for a Professional OP if they derive a monthly basic salary of at least MUR 60,000 (circa. USD 1,700)
  • In addition, under the Act, investment restrictions for Professional OP holders have been waived – implying that they can now invest in a business provided that they:
  • are not employed in the business;
  • do not manage the business; and
  •  do not derive any salary or employment benefits from the business.

Holders of Occupation Permit as Professional may hold shares in a business where he is employed provided that he is not a majority shareholder

Self-employed OP

Eligibility Criteria for OP

  • The self-employed OP will be renewed if the individual generates a minimum business income of MUR 800,000 (circa. USD 22,800) per year as from the third year of registration – prior to the Finance Act 2020, the individual had to generate a cumulative turnover of at least MUR 2.4million (circa. USD 68,500) during the 3 years preceding the application for the renewal of the occupation permit and with a turnover of at least MUR 600,000 (circa. USD 17,100 per year)

For PR after 1st September 2020

Applicant must be the holder of a Self-employed OP and must have generated annual business income of at least MUR 3 million (circa. USD 85,700) for 3 consecutive years immediately preceding the PR application.

Retired Non- Citizens

  • Extension of the validity period of the Retired RP from 3 years to 10 years
  • Subject to meeting the required conditions, holders of Retired RP may apply for a Permanent Residence (PR). The PR* will be issued for a period of 20 years
  • Retired RP holders no longer have investment restrictions and may invest in a business provided that they: (i) are not employed in the business (ii) do not manage the business (iii) do not derive any salary or employment benefits from the business
  • Retired non-citizens who have been granted a PR are eligible to engage in any occupation for reward or profit without having to apply for a separate OP or work permit.

For PR after 1 September 2020

Applicants must:

(1) have held a residence permit as retired non-citizen for at least 3 years; and

(2) have transferred such amounts, by instalments or otherwise, the aggregate of which shall be at least USD 54,000 or its equivalent in freely convertible foreign currency, during the period of 3 years

N.B:

The minimum investment amount criteria entitling foreigners to a residence permit following the acquisition of property under the Property Development Scheme, the Real Estate Scheme, the Integrated Resort Scheme and the Smart City Scheme (collectively referred to as the “Schemes”) is now set at USD 375,000 (previously: USD 500,000).

Foreigners investing in the above Schemes and having received their residence permits may now engage in any occupation for reward or profit. Previously, they were not entitled to work on the island if they did not have a valid OP or work permit.

Dependants of OP and RP Holders

OP and RP Holders can apply for residence permits for their dependents. The definition of “Dependents”* has been broadened under the Finance Act 2020 to include the parents of the OP and RP Holders. * “Dependents” is now defined as the spouse, dependent child, parent or other dependent of a person.

Financial Intelligence and Anti- Money Laundering Act amended

Section 2

“legal person” –

(a) means any entity, other than a natural person; and

(b) includes a company, a foundation, an association, a limited liability partnership or such other entity as may be prescribed

“suspicious transaction”,

– (a) gives rise to a reasonable suspicion that it may involve – (i) the laundering of money or the proceeds of any crime; or (ii) funds linked or related to, or to be used for, the financing of terrorism or proliferation financing or, any other activities or transaction related to terrorism as specified in the Prevention of Terrorism Act or under any other enactment, whether or not the funds represent the proceeds of a crime

3. Money Laundering

A reporting person who fails to take such measures as are reasonably necessary to ensure that neither he, nor any service offered by him, is capable of being used by a person to commit or to facilitate the commission of a money laundering offence or the financing of terrorism shall commit an offence

19E. Duty to provide information

In section 19E, in the heading, by adding the words “for purpose of conducting risk assessment”;

Companies Act 2001

Section 2

nominee”, by inserting, after the words “some other person either directly or” and “a person is the nominee of another”, the words “indirectly” and “legal or natural”, respectively

“beneficial owner” or “ultimate beneficial owner” –

(a) means any natural person who ultimately owns or controls a company or the natural person on whose behalf a transaction or activity is being conducted in relation to a company; and

 (b) includes –

(i) the natural person who ultimately owns or controls a company through :

 (A) direct or indirect ownership of such shares in such percentage as may be prescribed

(B) voting rights;

(C) ownership interest; or

(D) control by other means; (ii) where no natural person under paragraph (i) is identified, or if there is any doubt that the person identified is the beneficial owner, the natural person who controls the company in the manner one company controls another company under section 5; (iii) where no person under paragraphs (i) and (ii) is identified, the natural person who acts as executive director or has equivalent executive powers;

Section 14. Inspection and evidence of registers

in subsection (8), by adding the following new paragraphs, the comma at the end of paragraph (b) being deleted and replaced by a semicolon and the word “and” at the end of paragraph (a) being deleted – (c) proof of incorporation; (d) legal form and status; (e) basic regulating powers; and (f) list of directors

Section 23: Application for incorporation

A declaration regarding beneficial ownership which shall be disclosed in accordance with section 91(3A)(c).

the full name and the usual residential address of the beneficial owner or ultimate beneficial owner, if any; (subsection (2), by inserting, after paragraph (d), the following new paragraph)

91. Company to maintain share register

The information referred to in subsection (3)(a)(ii) shall be lodged with the Registrar through CBRIS or such other electronic system or in such other manner as the Registrar may approve –

(i) at the time of incorporation of a company;

(ii) at the time of registration of a foreign company;

(iii) at the time of registration by way of continuation of a company;

(iv) on filing of the annual return of the company;

 (v) in the case of a foreign company, on filing the financial statements of the company;

 (vi) upon any change, including transfer, in the shareholding of a company; (vii) at the time of an issue of shares

(d) The information referred to in paragraph (c)(vi) and (vii) shall be filed with the Registrar within 14 days from the date by which any entry or alteration is made in the share register

190. Company records

  • Notwithstanding any other enactment, a company shall authorise at least one officer, who shall be ordinarily resident in Mauritius, to provide, upon request by any competent authority, all basic information and beneficial ownership information of the company

(b) A company shall, within 14 days of an authorisation under paragraph (a) or of any change of an officer under paragraph (a), notify the Registrar, in such form as the Registrar may approve, the name and particulars of the officer.

(c) In this subsection – “basic information”, in relation to a company means –

(a) the company name, proof of incorporation, legal form and status, the address of its registered office, basic regulating powers, a list of its directors; and

(b) a register of its shareholders or members, containing the names of the shareholders and members and number of shares held by each shareholder and categories of shares, including the nature of the associated voting rights; “competent authority” – (a) means a public body responsible to combat money laundering or terrorist financing; and

  • (b) includes an investigatory authority; “investigatory authority” has the same meaning as in the Financial Intelligence and Anti-Money Laundering Act

281. Balance Sheet

(5A) Any information regarding the beneficial ownership of a foreign company shall be disclosed in accordance with section 91(3A)(c)

Financial Services Act

43A. Frequency of on site inspections

(1) The frequency of an on site inspection carried out under section 43 shall be determined on the basis of, but not limited to –

 (a) the money laundering or terrorism financing risks and policies, internal controls and procedures associated with a licensee, as assessed by the Commission;

(b) the money laundering or terrorism financing risks present in Mauritius; and

(c) the characteristics of the licensee and the degree of discretion allowed to the licensee under the risk-based approach implemented by the Commission. (2) The Commission shall review the assessment of the money laundering or terrorism financing profile of a licensee as and when there are major developments in the management and operations of the licensee.

Foundations Act

36. Records to be kept

Any information regarding the beneficial owner or ultimate beneficial owner of a Foundation shall be lodged with the Registrar – (a) at the time of registration of the Foundation or foreign Foundation, as the case may be; (b) at the time of registration by way of continuation of the Foundation

New sections added:

 A Foundation that fails to comply with subsection (1)(d) or (e) shall commit an offence and shall, on conviction, be liable to a fine not exceeding 300,000 rupees.

 (b) A Council member or former Council member who fails to comply with subsection (1)(d) or (e) shall commit an offence and shall, on conviction, be liable to a fine not exceeding 300,000 rupees.

(8) Any secretary or former secretary who fails to comply with subsection (5) shall commit an offence and shall, on conviction, be liable to a fine not exceeding 300,000 rupees

39. Removal from register

(4A) Where a Foundation, Council member, former Council member, secretary or former secretary, as the case may be, has failed to comply with section 36(1)(d) or (e) or (5), the Registrar shall remove the name of the Foundation from the register.

50. Offences committed by Foundation

by inserting, after subsection (2), the following new subsection

 (2A) An offence referred to in section 36(1)(d) or (e) or (5) shall not be compounded unless the Foundation or Council member or former Council member, as the case may be, agrees in writing to – (a) pay an amount, acceptable to the Registrar, not exceeding the maximum penalty imposable under this Act for that offence

Here are the changes made by the government of Mauritius in favor of foreigners who wish to settle in the territory

  • Persons who are resident in Mauritius now include a person who holds immovable property under the integrated resort scheme, real estate scheme, invest hotel scheme, property development scheme or smart city scheme, the purchase price of which is not less than 375,000 US dollars.
  • The investment threshold for (i) an investor and (ii) a holder of an immovable property under an existing scheme, to obtain a permanent resident permit is now 375,000 US dollars.
  • Persons who are permanent resident in Mauritius includes a person who invests 375,000 US Dollars in any activity specified in part IV of the schedule to the Investment Promotion Act.
  • An investor or self-employed non-citizen who is the holder of an occupation permit will not have to wait until the expiry of the period of 3 years of his permit to apply for the status of permanent resident. The non-citizen may now, within the 10-year occupation permit period, upon satisfying the criteria set out in the schedule to the Investment Promotion Act and on application made, be granted the status of permanent resident.
  • A person who has been a holder of an occupation permit or residence permit for a period of 3 years immediately before 1st of September 2020 and who satisfies the criteria specified in part III of the first schedule to the Economic Development Board Act 2017, may now, on application, be granted the status of permanent resident.
  • The validity of a permanent residence permit will now be extended to 20 years (previously: 10 years)
  • An investor or a self-employed non-citizen can now apply for an occupation permit for a period of 10 years.
  • An occupation permit which has been issued for a period of 3 years will now be extended for a period of 10 years as from the date of the expiry of the occupation permit in the case of an investor or self-employed non-citizen provided that the permit is valid on 1 September 2020.

The holder of an occupation permit as professional or the holder of a residence permit as a retired non-citizen may now:

  • hold shares in a business in which he is employed if he is not a majority shareholder of that business;
  • invest in any business if he :
    • is not employed in that business;
    • does not manage that business; and
    • does not derive any salary or employment benefit from that business
For quite some time, offshore banking has been considerably gaining in popularity.

For quite some time, offshore banking has been considerably gaining in popularity. While it was previously seen as something reserved for skilled financial experts, big corporations or the super wealthy, it is becoming more and more accessible than ever. Have a look at some of its advantages.

Tax incentives

One of the most significant factors motivating investors to bank offshore is the tax benefits. In countries like Mauritius, tax rates are extremely advantageous to investors. Offshore banking is a resourceful way to generate wealth. Thus, the countries devise incentives so that both parties can benefit from this venture. For instance, as long as investors do not participate in local trade or make their money within the country, their assets are not subject to local tax laws. This implies a decrease in income tax, capital gains tax or property tax, among others.

Better asset protection

Thanks to offshore banking, investors have a lot of ways to better protect their assets. You can either simply store your liquid assets offshore in a traditional checking or savings account or you can take things further, branch out and explore additional structures for asset protection. For instance, you can set up different types of trusts in Mauritius. This will allow you to preserve and protect existing assets and enjoy tax benefits without losing control over how they are managed. Moreover, many offshore banks and banking countries aim to protect the assets of investors and they have a legal system that is beneficial to foreign investors to do so.

Privacy and anonymity

It goes without saying that offshore banking will provide you with greater privacy. Investors might not wish to have their financial decisions made public for several reasons. Thus, when they bank in international waters, they can benefit from greater financial privacy, confidentiality and even anonymity if they wish to. This does not mean that you are opening a bank account in secret. Instead the offshore company you patronise will take the responsibility of confirming your identity and your place of residence. This will allow them to authenticate your standing to legally required entities while also protecting your identity. This type of protection will allow you to buy more stocks in a single company or simply keep your financial dealings private. This involves activities ranging from setting up an offshore savings account to establishing a large trust for future generations of beneficiaries.

Decreased vulnerability and increased diversification

Banking, wherever you choose to do so, involves inherent risks. Domestically, there are political and economic factors to take into consideration and these extend to offshore banking as well. However, offshore banking can decrease your vulnerability to these risks because it increases your diversification. Everyone in the financial sector is aware of the importance of diversification. By choosing to process all your financial transactions on domestic land, you are making yourself more vulnerable. Offshore banking ensures geographic diversity. You are spreading your wealth around, creating a financial safety net, and reducing your vulnerability in a significant way.

Investors opt for offshore banking because of many reasons. Everything you need to know about offshore banking is in this article.

The offshore banking sector is constantly evolving. While it used to be a luxury for the extremely wealthy a few years back, that is no longer the case. In fact, academic research has proven that the demand for offshore baking is on the rise by many and this will continue to be the case for quite some time. Why do people open these accounts? Investors opt for offshore banking because of many reasons. The main one is asset diversification. However, there are several features such as privacy and risks that must be considered. Everything you need to know about offshore banking will be explored below.

Basic requirements to open an offshore bank account

There are some basic requirements to fulfil before opening an account. First of all, it has become increasingly important to present your own proof of address so that financial institutions are able to confirm your domicile. This is important because they need to comply with tax obligations or to deal with issues such as OECD compliance and much more. This requirement is met by producing a utility bill that is not older than 90 days and this document must be submitted along with the usual information, such as your name, date of birth, citizenship, passport and job details, that you must provide. To make things easier, in countries like Mauritius, your physical presence is not even required to open an offshore bank account. Our agency is going to help you complete all the procedures. If you want to learn more about this, you can get in touch with one of our agents.

Benefits of opening an offshore bank account

There are several advantages to opening an offshore bank account. Besides from benefits that are country-specific, Luigi Wewege has advanced a few general ones, that are also very important to consider, in his recent 2020 interview. He said that they generally include “peace of mind… against political upheaval, increased personal freedom, living in the digital banking revolution, currency diversification, higher interest rates on deposits, easy access to medical care abroad…” and others. As such, you must ask yourself whether you will be able to achieve those benefits by opening an offshore bank account and make a decision after this evaluation.

Where to open an offshore bank account?

Deciding in which country to open an offshore bank account is very important. There are several criteria that you must consider before picking up the appropriate location. For example, you must consider

  • The tax rate: is it a beneficial one?
  • Banking privacy: will you be able to enjoy the privacy that is required to protect your financial assets and to keep your transactions secure?
  • Interest rates,
  • Treaties between the country you want to establish your offshore banking account and your country of residence and
  • Personal circumstances.

Additionally, you must also choose a country that is suitably located and prepared against global tensions. These involve volatility because of issues such as flashpoints in The Middle East and Asia, Brexit or even the US/ China Trade War.

In February 2020, Mauritius was placed on the institution’s “Jurisdictions under Increased Monitoring” list. The country has taken several security measures.

The Financial Action Task Force (FATF), also known by its French name Groupe d’action financière is an intergovernmental organization that was founded in 1989. It was established to implement international standards, to develop and promote policies at national and international levels and to combat money laundering and the financing of terrorism.  On the 21st of February 2020, Mauritius was placed on the institution’s “Jurisdictions under Increased Monitoring” list. Following this, the FATF has recognized that the island has taken several measures to improve the transparency of legal persons by amending the legal framework to require them to disclose beneficial ownership information and improve the processes for identifying and confiscating proceeds of crimes.

Security measures undertaken by Mauritius

Throughout the years, Mauritius has made significant efforts to increase the efficiency level of its AntiMoney Laundering and Countering the Financing of Terrorism (AML/CFT) system. Some of these are:

  • completing its National Risk Assessment,
  • enhancing domestic coordination and international cooperation,
  • developing and implementing an AML/CFT risk-based supervision framework for financial institutions,
  • the implementation of the United Nations targeted financial sanctions related to terrorism and proliferation.

Mauritius has been fully committed the implementation of its Action Plan. As the time of writing, it has been able to address 53 out of the 58 Recommended Actions identified in the Mutual Evaluation Report (MER) to improve the efficiency level of its AML/CFT system.

While the island is in its ‘increased monitoring’ phase, the FSC is continuously and actively working with the government, industry stakeholders and the FATF to address the remaining action items. It is committed to resolve these issues swiftly within or before the agreed timelines. While the FATF   does not call for the application of enhanced due diligence to be applied to jurisdictions such as Mauritius, even if they are placed on the “Jurisdictions under Increased Monitoring” list, it encourages its members to take into account the information presented on that jurisdiction in their risk analysis.

Should you be worried about the FATF’s “Jurisdictions under Increased Monitoring” list?

After the publication of the list by the Financial Action Task Force, there have been some apprehensions amongst market participant regarding whether the inclusion of Mauritius would have any repercussions. However, they have no reason to worry since the country has already addressed the necessary issues. Moreover, the FSC is prioritizing its work to address all the action points recommended for the Global Business sector ahead of the set timeline. This work is focused on demonstrating the implementation of risk-based supervision of the global business sector by way of a comprehensive onsite inspection schedule and taking enforcement action against non-compliance.

As such, Mauritius remains completely committed to uphold the integrity of the domestic and international financial system. If you wish to have more information on the finance sector of Mauritius or the benefits of establishing a company in the country, feel free to contact us. Our team is available to answer your questions and to help you establish, manage and administer companies, trusts, foundations and funds according to your needs.

There has been a considerable flow of direct investment to Africa during the last decade, in which Mauritius has played a considerably large role.

Some years back, the IMF forecasted that Africa will grow to become the home of several of the fastest growing economies in the world and that the average African economy is going to take the lead from Asia. Besides minerals and energy, a broad base of sectors are supporting the economic growth of this region. These include agriculture, technology, telecommunications, media and financial services. These industries are significant foreign direct investments and a large portion of this is from private equity investments. There has been a considerable flow of direct investment to Africa during the last decade, in which Mauritius has played a considerably large role.

Benefits of establishing a company in Mauritius

The island, found in the Indian Ocean, is considered as the number one jurisdiction for investment into Africa. Foreign companies can benefit from several advantages when establishing a business in Mauritius. First of all, there are the traditional advantages that an offshore financial centre offers. These are:

  • no capital gains tax,
  •  no withholding tax,
  •  no exchange controls,
  • and free repatriation of profits and capital, among others.

Moreover, in Mauritius, they will also benefit from an extensive network of treaties and double taxation avoidance agreements. So far, the country has concluded 46 tax treaties and is party to a series of treaties under negotiation. The treaties currently in force are with jurisdictions such as France, the UK, Germany, United Arab Emirates, India and South Africa, among others. 6 treaties are awaiting ramification, 5 are awaiting signature and 20 others are being negotiated.

Tax savings: Mauritius v/s other African states

In some parts of Africa, Capital Gains tax are imposed. These are generally levied at a rate ranging from 30-35%. However, foreign companies in Mauritius do not have to worry about that thanks to the Double Taxation Agreements established in the country. These restrict taxing rights of capital gains to the country of the seller of the assets. Considering the fact that there is no capital gains tax in Mauritius, a company registered in the island is able to potentially make significant tax savings.

Additionally, most of the states of Africa impose some withholding tax on dividends paid out to non-residents. These can vary between 10% and 20%. Nonetheless, the Double Taxation Agreements (DTAs) in force in Mauritius limit withholding taxes on dividend. The treaty rates are generally 0%, 5% or 10%. Therefore, depending on from which country the investing country is, there is the possibility of potential tax savings. With regards to capital gains tax, the Double Taxation Agreements guarantee the maximum withholding tax rate if ever there are changes in the fiscal policy in the countries on investment.

If you have a question or you wish to establish a company in the country, do not hesitate to get in touch with one of our agents. Our firm has contributed to the economic and financial growth of several individuals and companies. It has proven to be a reputable company which you can trust.