The Minister of Finance, Mr Pravind Jugnauth, presented his budget in July 2016 against a background of domestic and international pressures with the stated objective of meeting the challenges the Mauritian economy currently faces and providing a new direction and impetus to economic growth.
In summary, the Minister sought to open the economy to international investment, provide incentives for investment, while making positive changes to the current attractive tax regime.
The budget entitled ‘A New Era of Development’ is intended to create employment by boosting investment in Mauritius through the reintroduction of tax holidays and improvements to the scheme of tax credits for investments.
The stand out announcements include an eight year tax holiday on business income for companies licensed as Global Headquarters Administration (see comments below about the implimentation).
A reduced five year tax holiday will be introduced for companies licensed to conduct the activity of Treasury Management, Asset and Fund Managers subject to a minimum of USD100 million assets under management, Banking and Corporate Advisory and Overseas Family Corporations.
The five year tax holiday on income will also benefit Non-Mauritian Ultra High Net Worth Individuals who invest at least USD25 million in Mauritius and meet subsistence and employment conditions.
The recent publication of the Finance (Miscellaneous Provisions) Bill 2016 does not include details of these tax holidays and it is expected that full details of the measures will be set out in Regulations that will be published in the coming days.
In an interesting development, a Global Business Companies 2 (‘GBC2’) a non-resident company for Mauritius tax purposes which is not permitted to trade in Mauritius, will be permitted to invest in listed Mauritius securities. The objective is to allow GBC2 a wider scope of operations and to boost the capital markets in Mauritius.
The budget also includes extensive investment in infrastructure in particular transport and improvements to international broadband connections and quality.
Other initiatives were announced with the intention of developing Mauritius as an international centre of trade and financial services including establishing an International Derivatives and Commodities Exchange (‘MINDEX’), a mineral exchange for precious metals and stones. In addition, to enhance Mauritius’ position in the trade between Africa and Asia the development of a Renminibi hub. Finally, steps are being taken to develop Mauritius as a centre for international arbitration.
These highly awaited measures concerning tax holidays were, unfortunately, not included in the The Finance (Miscellaneous Provisions) Bill 2016. It is expected that these tax holidays to be introduced through Regulations and that the conditions to be met in order to avail of the tax incentives will be clearly set out in the Regulations.
For more information in respect of the above matters, and the implimentation of these proposals please contact Rosemont in Monaco, firstname.lastname@example.org