Click here to see the presentation of Mardemootoo Solicitors

China-Africa Investment Forum
Beijing June 2013
FOCUS: MAURITIUS
A presentation by
Mardemootoo Solicitors

Mauritius...Star & Key of the Indian Ocean

Mauritius:
a strategic stop-over into
Africa

Mauritius

Tax treaty network
Mauritius has ratified (r), awaiting
ratification (a), awaiting signature (s)
or is negotiating (n) tax treaties with
24 African countries. These
countries are Botswana (r), Lesotho
(r), Madagascar (r), Mozambique (r),
Namibia (r), Rwanda (r), Senegal (r),
Seychelles (r), South Africa (r),
Swaziland (r), Tunisia (r), Uganda
(r), Zimbabwe (r), Zambia (r),
Republic of Congo (a), Egypt (a),
Kenya (a), Nigeria (a), Ghana (s),
Gabon (s), Algeria (n), Burkina Faso
(n), Tanzania (n), Malawi (n).
Mauritius

African
Country
Corporate
Income
Tax Rate
Capital
Gains
% % %
Branch
Tax Rate
Dividends
Non-treaty
rates
%
Botswana 22 22 30 7.5
Treaty with
MU
%
Interest
Non-treaty
rates
%
Treaty with
MU
%
Royalties
Non-treaty
rates
%
Treaty with
MU
%
5/10
(1)
15 12 15 12.5
Mozambique 32 32 32
Namibia 34 0 34
10/20
(2)
10/20
(4)
8/10
(3)
20 8 20 5
5/10
(5)
10 10 10.2 5
1. 5% of the gross amount of the dividends if the beneficial owner is a company which owns at least 25% of the capital in the company paying the dividends;
10% of the gross amount of the dividends in all other cases.
2. 10% rate applies to dividends paid on shares listed on the Mozambique stock exchange
3. 8% of the gross amount of the dividends if the beneficial owner is a company which holds at least 25% of the capital of the company paying the dividends;
10% of the gross amount of the dividends if the beneficial owner is a company which holds less than 25% the capital of the company paying the dividends
4. This is a final tax applicable to nonresidents. Dividends paid to nonresidents are subject to a final 10% withholding tax if the recipient of the dividend is a
company that holds at least 25% of the capital of the company paying the dividend and if it is the beneficial owner of the shares. For all other cases, the
dividend withholding tax rate is 20%. Dividends paid out of oil and gas profits are exempt from withholding tax.
5. 5% of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 25% of the capital of the company paying the
dividends; 10% of the gross amount of the dividends in all other cases.

African
Country
Corporate
Income
Tax Rate
Capital
Gains
% % %
Branch
Tax Rate
Dividends
Non-treaty
rates
%
Treaty with
MU
%
Interest
Non-treaty
rates
%
Treaty with
MU
%
Royalties
Non-treaty
rates
%
Treaty with
MU
%
Uganda 30 30 30 15 10 15 10 15 10
Zimbabwe 25
1/5/20
(1)
25
10/15
(2)
10/20
(3)
15 10 15 15
Rwanda 30 30 30 15 0 15 0 15 0
1. Tax is imposed on capital gains on sales of immovable property and listed and unlisted marketable securities. The tax rates on the disposal of assets
acquired before 1 February 2009 are 1% for listed marketable securities and 5% for unlisted marketable securities and immovable property. The tax rates on
disposal of assets acquired on or after 1 February 2009 are 1% for listed marketable securities, 5% for unlisted marketable securities and 20% for immovable
property.
2. The 10% rate applies to dividends paid by companies listed on the Zimbabwe Stock Exchange to resident individuals and nonresidents. The 15% rate applies
to other dividends paid to resident individuals and nonresidents.
3. Lower rate applies to companies holding at least 25% of capital.

African
Country
Corporate
Income
Tax Rate
Capital
Gains
% % %
Branch
Tax Rate
Dividends
Non-treaty
rates
%
Treaty with
MU
%
Interest
Non-treaty
rates
%
Treaty with
MU
%
Royalties
Non-treaty
rates
%
Treaty with
MU
%
Lesotho 25 25 25 25 10 25 10 25 10
Madagascar 20 20 20
0
(1)
5/10
(2)
20 10 10 5
Senegal 25 25 25 10 0
6/8/
16/20
(3)
0 20 0
1. The withholding tax on dividends was repealed in 2008. However, withholding tax on dividends continues to apply to certain entities.
2. 5 % of the gross amount of dividends if the company paying the dividends is a company eligible under the Investment Code or a venture capital company
3. The 6% rate applies to interest on long-term bonds. The 8% rate applies to bank interest. The 20% rate applies to interest on deposit receipts. The 16% rate
applies to other interest payments.

African
Country
South Africa 28
Corporate
Income
Tax Rate
Capital
Gains
% % %
18.64
8
(1)
Branch
Tax Rate
28 15
Dividends
Non-treaty
rates
%
Treaty with
MU
%
Interest
Non-treaty
rates
%
Treaty with
MU
%
Royalties
Non-treaty
rates
%
5/10
(2)
0 (3) 10
(4)
12 (5) 5
(6)
Treaty with
MU
%
1. The current DTA provides protection against South African capital gains tax (“CGT”) for a Mauritian company owning shares in a South African company
holding immovable property. However, the capital gains article of the new DTA now specifically provides that a country may tax gains derived from the
alienation of shares deriving more than 50% of their value directly or indirectly from immovable property situated in such country.
2. Dividends: In terms of the current DTA, the South African withholding tax on dividends will be reduced to 5% if the beneficial owner is a Mauritian company
which holds at least 10% of the capital of the company paying the dividends, while in all other instances, the dividends tax may not exceed 15%. The fall-back
position has now been amended to reduce the maximum dividends tax rate to 10%.
3. South Africa does not levy a withholding tax on interest. However, with effect from 1 July 2013, a 15% withholding tax will be levied (subject to certain
exemptions) on interest paid to a nonresident, unless the rate is reduced under a tax treaty.
4. Interest: The current DTA provides for the country of residence of the recipient of interest to have the taxing rights if such recipient is the beneficial owner of
the interest. A Mauritian lender would thus not be subject to the new South African withholding tax on interest (once it comes into effect) if the Mauritian lender
is the beneficial owner of the interest. However, the new DTA does not provide for an exemption but instead caps the tax on interest which may be imposed by
the source country, to 10% of the gross amount of the interest.
Mauritius does not currently impose a withholding tax on interest paid by so-called GBL1 or GBL2 companies. South African lenders to Mauritian borrowers
would thus as a general rule not be negatively affected by the amendment of the interest article, while Mauritian lenders to South African borrowers would on
the other hand be prejudiced.
5. The withholding tax on royalties paid to a nonresident is 12% unless the rate is reduced under a tax treaty. The rate is proposed to be increased to 15% as
from 1 July 2013 to be in line with the withholding taxes on dividends and interest.
6. Royalties: The current exemption from royalties withholding tax has been replaced with a 5% maximum rate.
Source of update on the DTA with South Africa: Bowman Gilfillan tax team

African
Country
Corporate
Income
Tax Rate
Capital
Gains
% % %
Branch
Tax Rate
Dividends
Non-treaty
rates
%
Treaty with
MU
%
Interest
Non-treaty
rates
%
Treaty with
MU
%
Royalties
Non-treaty
rates
%
Treaty with
MU
%
Swaziland 30 0 30 15 7.5 10 5 15 7.5
Tunisia 30 30 30 0 0 20 2.5 15 2.5
Zambia
15 to
40 (1) 0
15 to
40
15
5/15
(2)
15 10 20 5
1. Resident and nonresident companies are subject to tax on their income derived from Zambian sources. Resident companies are also subject to tax on profits
derived from a business carried on partly inside, and partly outside, Zambia. A company is considered resident in Zambia if it is incorporated in Zambia or if
the central management and control of the company’s business or affairs are exercised in Zambia.
2. 5 % of the gross amount of the dividends if the beneficial owner is a company which holds at least 25 per cent of the capital of the company paying the
dividends; or 15 % of the gross amount of the dividends in all other cases.
Source for figures: Ernst & Young 2013 Worldwide Corporate Tax Guide.

Additional Investment Benefits &
Protection:
• Southern African Development Community
(SADC)
• Common Market for Eastern and Southern
Africa (COMESA)
• Indian Ocean Commission (IOC)
• Africa Growth and Opportunity Act (AGOA)
• African-Pacific-Caribbean (ACP)
• L'Organisation pour l'Harmonisation en Afrique
du Droit des Affaires (OHADA)

SADC

SADC: Common Free Trade Area with 15
countries
• Population: 258 million
• GDP: USD 472 billion

COMESA

COMESA: Common Free Trade Area with
13 African countries
• Population: 430 million
• Annual import bill: USD 152 billion
• Annual export bill: USD 157 billion

In addition to double taxation avoidance
agreements, Mauritius has signed
Investment Protection and
Promotion Agreements (IPPAs)
with 19 African Countries of which 6 are
already in force and 13 are awaiting ratification

IPPAs:
• Free repatriation of investment capital and
returns
• Guarantee against expropriation
• Most favoured nation rule with respect to
investment and compensation for losses due to
war and riots

In Force
Burundi
Madagascar
Mozambique
Senegal
South Africa
Tanzania
Awaiting Ratification
Benin
Botswana
Cameroon
Comoros
Ghana
Guinea Republic
Mauritania
Republic of Congo
Rwanda
Swaziland
Chad
Zimbabwe
Kenya

Investment into Zimbabwe as at
March 2013:
• Mauritius: USD 3.4 Billion
• China: USD 1.7 Billion
• South Africa: USD 0.4 Billion

Setting up an
operational base
for Africa in Mauritius

Investment vehicles:
• Global Business Company- GBC1 and GBC2
• Domestic Companies
• Trusts
• Limited Liability Partnerships
• Foundations
• Sociétés

International Rankings:
Index Global Rank Africa Rank
Environmental Performance Index 2010 6th 1st
Fraser institute economic freedom 9th 1st
2012 Index of Economic Freedom 8th 1st
Forbes Survey of Best Countries for Business 2011 19th 1st
World Bank Ease of Doing Business 2012 23rd 1st
Democracy Index 2011 24th 1st
Global Enabling Trade Index 33rd 1st
Knowledge Economy Index 2012 62nd 1st
Mo Ibrahim Index of African Governance 1st 1st

Holistic Investment
Environment:
• Socio-Economic stability
• High standard work and live environment
• Rule of law
• Easy access / favourable timezone