Law

Mauritius Legal System

The laws of Mauritius are the result of a hybrid system combining more particularly British common law and the French Napoleonic Code, with the modern legislation in the fields of company, banking, finance and taxation having a very strong English flavor.

Laws and Legal Framework in Mauritius

The various Acts, under which companies and investment vehicles are registered, largely codifies English common law principles. The most relevant laws for companies are listed below. In addition, certain regulations may apply as they are published, i.e. by the Government in the Government Gazette or by the FSC in Circular Letters.

Most important Acts

Legal Entities

Companies Act 2001 

Protected Cell Companies Act 1999

Foundations Act 2012

Insolvency Act 2009

Financial Services

Financial Services Act 2007

The Finance (Miscellaneous Provisions) Act 2018

Securities Act 2005

Securities (Central Depository, Clearing and Settlement) Act 1996

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Insurance

Captive Insurance Act 2015

Insurance Act 2005

The Insurance (Amendment) Act 2015

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Miscellaneous

Trusts Act 2001

Limited Partnerships Act 2011

Private Pension Schemes Act 2012

Financial Intelligence and Anti-Money Laundering Act 2002

Compliance: Low Regulatory Burden in Mauritius

Fortunately, the density of regulation in Mauritius is very clear compared to Europe and the US. Entrepreneurs, corporations and investors benefit from a high level of economic and financial freedom and a low financial burden resulting from taxation and compliance. At the same time, the interests of minority shareholders are very well protected by the law.

Major changes in law usually follow a predictable sequence of steps:

1.
In June of each year, the Budget Speech outlines intended new laws and regulations, amendments and cancellations that shall come into force in the next fiscal year (1st July – 30th June). At this stage, many details are still unclear. Some projects and initiatives may receive the required funding within the intended time frame, while others may not.
2.
Discussions and consultations between stakeholders.
3.
In August, the Finance Bill will be presented to the public as a draft with all law changes. Minor details may need further clarification.
4.
Further consultations between stakeholders.
5.
The Finance Bill will be passed by parliament, including some amendments if needed.

“Mauritius is characterized by strong business dynamism and sustained by lean administrative requirements that enable companies to open and close with relative ease.”

Global Competitiveness Report 2018

Regional Integration in Africa: COMESA, SADC & IORA

Mauritius is the only international financial services center being a member of all the major African regional organizations
  • Southern African Development Community (SADC)
  • Common Market for Eastern and Southern Africa (COMESA)
  • Indian Ocean Rim Association (IORA). (The Coordinating Secretariat of IORA is located at Ebene, Mauritius.)

Multi-lateral agreements of Mauritius

New practices of some countries or group of countries, respectively, imposing their laws to the entire world increasingly affect all jurisdictions.

In Europe, the European Union (EU) not only issues new laws, regulations, orders and directives almost every week affecting their member countries, it also regulates transactions between entities of their member countries with entities in non-EU countries. A good example for that is the Regulation (EU) 2016/679 (General Data Protection Regulation). Mauritius has changed their laws accordingly in order to fully comply with the GDPR.

On the positive side, Mauritius is a signatory to the European Union Economic Partnership Agreement (EU-EPAs). Amongst other items of the agreement, there is elimination of duties/quotas for Mauritius imports into the EU, flexible rules of origin, dispute settlement mechanism and development cooperation provisions.

The Common Reporting Standard (CRS) is an information standard for the automatic exchange of information regarding bank accounts on a global level, between tax authorities, which the Organization for Economic Co-operation and Development (OECD) developed in 2014. Mauritius has started to report in 2018.

However, the OECD allows the participating countries to determine what accounts are reportable. To figure out which accounts of our clients in Mauritius are reportable is part of our consulting services.

The Global Forum on Transparency and Exchange of Information for Tax Purposes has rated Mauritius as an OECD Compliant jurisdiction on 21 August 2017.

Under the United States Africa Growth & Opportunities Act (AGOA) Mauritius, being part of Africa, has duty free access to the US markets for over 7,000 products including apparel, footwear, wine, motor vehicles components and agricultural products.

The Foreign Account Tax Compliance Act (FATCA) is a 2010 United States federal law requiring all non-U.S. (‘foreign’) financial institutions (FFIs) to search their records for customers with indicia of ‘U.S.-person’ status and to report the assets and identities of such persons to the U.S. Department of the Treasury.
We are working together with management companies and banks that are accepting U.S. persons as founders, shareholders, trustees, beneficiaries, and owners of corporate and private bank accounts.

 

Mauritius is a member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank agency. MIGA provides non-commercial guarantees (insurance) for cross border investments in developing countries. The guarantees protect investors against the risks of expropriation, war and civil disturbance, capital transfer restrictions, breach of contract and non-honouring of sovereign financial obligations. Companies incorporated in Mauritius are eligible for MIGA guarantees.

 

Investment Promotion and Protection Agreements (IPPAs)

Mauritius has signed IPPAs with 24 African member states, thereof 10 being in force.

IPPA typically offers the following guarantees to investors from the contracting states:

  • Free repatriation of investment capital and returns;
  • Guarantee against expropriation;
  • Most favored nation rule with respect to the treatment of investment, compensation for losses in case of war or armed conflict or riot etc;
  • Arrangement for settlement of disputes between investors and the contracting states.