Lex Africa Guide 2012 Full - Afrer.org

the financial year (applicable to companies other thansmall proprietary companies and GBC 2 companies);for GBCs, filing of the annual report and financialstatements with the FSC;notify the FSC whenever a person becomes the holder of20% or more of the company’s shares or its votingpowers for GBCs.Exchange ControlsExchange controls have been suspended.TaxationTaxation in Mauritius is regulated by the Income Tax Act and itsregulations. The Mauritius Revenue Authority (MRA) is theregulator. Mauritius offers both a low tax jurisdiction andcompetitively priced business costs. The Mauritius tax regime isone of the lowest in the world.Legal SystemThe hybrid legal system in Mauritius combines both the civil andcommon law practices. The legal system is governed by both theFrench Code Napoléon and the British law. The Supreme Courthas a Chief Justice and seventeen (17) Puisne Judges who alsoserve on the Court of Criminal Appeal, the Court of Civil Appeal.The Magistrates serve on the Intermediate Court, the IndustrialCourt and ten (10) District Courts. The right of appeal to theJudicial Committee of the Privy Council in London is applicable(the Privy Council also sits in Mauritius from time to time). ThePresident of the Republic, in consultation with the PrimeMinister, nominates the Chief Justice, and then with the adviceof the Chief Justice also appoints the other Judges. The Presidentnominates other Judges on the advice of the Judicial and LegalService Commissions. Defendants have the right to counsel,including court-appointed counsel in case of indigency.Intellectual PropertyProtection is provided by statute, the Patents, Industrial Designsand Trademarks Act.Financial Services/InsuranceThe Financial Services Commission (FSC) was established as theregulator for the non-bank financial services sector under theFinancial Services Development Act. The FSC is the integratedregulator for the industry and its remit encompasses those ofthe former regulatory bodies for securities (Stock ExchangeCommission), insurance (Insurance Division of the Ministry ofEconomic Development, Financial Services and CorporateAffairs) and global business (Mauritius Offshore BusinessActivities Authority). The Commission thus licenses, regulatesand supervises non-bank financial institutions in Mauritius.Investment Climate and IncentivesThe Government has ensured that doing business in and fromMauritius is easy and efficient and complies with best practicesin terms of transparency, good governance and ethics. Mauritiushas enacted anti-money laundering and anti-terrorist financinglegislation while the business framework itself has been madesimpler. Mauritius has never been blacklisted and is not on theOrganisation for Economic Co-operation and Development(OECD’s) list of suspect tax havens.Under the Business Facilitation (Miscellaneous Promotion) Act,which came into operation on 1 October 2006, all applications inrespect of foreign investment are channelled through the Boardof Investment (BOI). Red tape has been minimised andregulatory processes re-engineered towards controls based onclearly defined guidelines. An attractive package of incentives isprovided to investors in the hotel, leisure and real estate sectors.In addition, the government has, in the Finance Act, introducedvarious schemes to promote foreign investment with minimumintervention by the Mauritian authorities. The MauritianGovernment has again reiterated its will to promote foreigndirect investment in its last 2012 budget with incentives forforeign investors in the freeport sector, ICT/BPO sector, financialservices sector, tertiary education sector and emerging marketssuch as renewal energy.Government incentives for investment include a low corporatetax rate of 15%, exemption from customs and excise duties onimports of equipment and raw materials, a low rate of 5%registration duty for notarial deeds, free repatriation of profits,dividends and capital, reduced tariffs for electricity and waterand the possibility for foreign investors to acquire immovableproperty and obtain permanent residency under the IntegratedResort Scheme (IRS) and Real Estate Scheme (RES).Under the IRS, a foreign company or a non-resident is allowed tobuy property for a minimum of US$500 000 (about EUR364 870)in immovable property and is eligible to be granted residency. Inaddition, a corporation holding a category 1 Global BusinessLicence (GBC1) may acquire immovable property whereauthorised by the terms of its licence.The following tax incentives are available to domestic andforeign investors:Income tax: Under the Income Tax Act, as amended,domestic companies and companies holding a GBC1benefit from an income tax rate of 15%. In the case of aGBC1, the income tax rate may be reduced to 3% afterapplication of deemed foreign tax credits. Corporationswhich hold a category 2 Global Business licence (GBC2) areexempt from tax but not considered as residents for taxpurposes.no capital gains tax;royalties, interest and services fees payable to foreignaffiliates are allowed as expenses provided they arereasonable and correspond to actual expenses incurred;interest paid on deposits in a bank holding category 2banking licences are tax exempt;dividends are tax exempt;no withholding tax on interest and royalties paid by a GBC 1or GBC 2 to non-residents ;no estate duty or inheritance tax is payable on theinheritance of shares in an entity holding a Global BusinessLicence (GBL).Double Taxation Avoidance TreatiesMauritius has concluded 36 double tax treaties and severaltreaties are under negotiation. The treaties currently in forceinclude Barbados, Belgium, Botswana, Croatia, Cyprus,Democratic Socialist Republic of Sri Lanka, France, Germany,India, Italy, Kuwait, Lesotho, Luxembourg, Madagascar,Malaysia, Mozambique, Namibia, Nepal,Oman, Pakistan, People’s Republic ofBangladesh, People’s Republic of China,Rwanda, Senegal, Seychelles, Singapore,South Africa, State of Qatar, Swaziland,Sweden, Thailand, Tunisia, Uganda, United51