On the 07th of June 2023, Dr. the Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development of the Republic of Mauritius successfully completed his National Budget speech for the financial year 2023-2024. Sporting a To Dare and To Care slogan, the Minister announced a host of measures designed to alleviate the negative impact of the now past COVID-19 pandemic on the Mauritian population with popular measures including the waiver of Value Added Tax (VAT) on certain essential products, a drop in fuel prices and an overhauling new and entirely progressive income tax regime to help boost the purchasing power of low to medium income households.
The Honorable Minister of Finance, who was incidentally voted the African Finance Minister of the Year at the African Business Leadership Awards 2023 as recently as last week, further reiterated the government’s ongoing commitment to maintain Mauritius as a competitive international financial center in terms of conducive measures cementing the country’s number one spot in doing business in Africa as well as an attractive destination to work and live. The Minister further pledged to improve the doing business environment and to “remove obstacles to investment, address labor shortages, and further strengthen the Mauritian economy.”
In order to achieve these goals, the Minister announced measures to further open the Mauritian economy to foreign talents with a view to sustaining high levels of growth and develop new economic sectors. Such measures include providing a business visa of 120 days without having to leave Mauritius to any applicant for an occupation permit and moreso, the grant of an occupation permit will no longer be conditional on the applicant having a bank account in Mauritius. Furthermore, the process for a foreigner to obtain a work permit in Mauritius is being streamlined with applications accepted via the government’s online platform as well as allowing non-citizens on a tourist or business visa to apply for a work permit.
The Minister further announced measures to position Mauritius as an import-export hub into Africa with the renewal of the Africa Warehousing Scheme for a period of 3 years to cover expenses in relation to warehousing, expertise and export consulting. The scheme ensured that exports to Tanzania have more than doubled since its implementation less than 2 years ago. The government will also update the existing legal framework on industrial development to cater for the setting up of Special Economic Zones to effectively position Mauritius as a gateway for the African Market.
Dr. the Honorable Renganaden Padayachy also announced measures to encourage the country’s transition to renewable energy. Investments linked to production of materials for renewable energy technologies will henceforth benefit from incentives under the Premium Investor Certificate. The government will also provide a 50% waiver on the increase in electricity prices for the next two years for companies moving towards 100% renewable energy. In addition, a 75% subsidy will be provided for the conduct of energy audits.
The Minister further provided his support to the Mauritian financial services sector, which is the second largest contributor to the country’s GBP, so as to remain at par with the highest levels of international standards and best practices. The government will Introduce a new set of legislative amendments to reinforce the existing AML/CFT legal framework and a Whistleblowing Act to sustain the fight against corruption. The Mauritius offshore sector will also revamp its range of products on offer the scope of the Variable Capital Companies being extended to allow their use for family offices and wealth management. A new framework to support the licensing and operation of Electronic Money Institutions will be introduced and a Wealth Manager and Family Officer license will now be available under Private Banking.
To further keep up with international monetary trends, The Digital Mauritian Rupee will be rolled out in November this year on a pilot basis. The Minister also announced multiple smaller measures designed to facilitate the setting up of a business in Mauritius and its management from outside of the country with a unique identification number for companies (covering business registration, tax account number, etc) and the global recognition of e-signature certifications including DocuSign and Adobe Sign.
Overall, this years’s budget speech provided an enlightening prospect on the next financial year 2023-2024 in terms of an enhanced desire to elevate the position of Mauritius as an investment hub into Africa and as a catalyst for the region’s economy and green energy sector.
Author: Ashiv Parianen, ACIArb
Senior Legal Advisor at Centurion Law Group