Mauritius Budget 2021/22: Recovery, Revival and Resilience amidst the Covid-19 Turmoil - Ocorian
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Corporate | Funds | Capital Markets | Private Client
Mauritius Budget 2021/22:
Recovery, Revival and Resilience amidst the Covid-19 Turmoil
The Minister of Finance and Economic Development delivered his Budget Speech
for the fiscal year 2021/2022 on the 11th June 2021 against the backdrop of the
Covid-19 pandemic which had deep effects on the economy. The Budget Speech
also coincided with the much-awaited announcement of the reopening of the
Mauritius borders for tourism in a phased manner, starting on the 15th of July 2021 for
vaccinated travellers. The tone of the budget was: Ocorian in numbers
1. to restore the confidence of economic operators through a series of incentives;
2. to kick start the recovery and the revival of the main economic sectors; and
3. to continue investing in major infrastructure projects to stimulate job creation,
growth and to provide for further resilience of the economy. 16
Office
locations
The 2021 /22 Budget Speech is a continuum of the previous budget speeches with
a strong accent on the inclusiveness of the society at large, further investment in
education, health care, social infrastructure and skills development and support to
the most vulnerable.
A significant aspect of the speech was the measures announced to further open 17,000
the economy to investors and to professionals who wish to work, live and enjoy Structures under
administration
the quality of life the island provides but also for the long-awaited extension of
the measures to include their families so that they can establish themselves on a
longer term. As a small open economy faced with a demographic challenge, the
Government has announced as series of reforms to complement the measures
announced last year:
1,250+
Staff
1. The validity period for an Occupation Permit (‘OP’), a combined work and residence
worldwide
permit, for Professionals is being extended from 3 years to 10 years;
2. Spouses of OP holders wishing to invest or work in Mauritius will be exempted
from applying for a separate permit;
3. The maximum age limit of 24 years for dependents will be waived;
4. A Young Professional Occupation Permit, for a
period of 10 years, for foreign students who have attended University education
8,000+
Clients
in Mauritius is being introduced; and
5. A new 10-Year Family Occupation Permit for those contributing USD 250,000 to
the COVID-19 Projects Development Fund is also being introduced.
Furthermore, a privilege club scheme will be implemented providing a range of
incentives to Occupation Permit holders and retirees, ranging from privilege access $260bn
to hotels, golf courses, restaurants, private medical institutions, amongst others. Assets under
administration
To further improve the investment climate and ease of doing business in Mauritius,
the Premium Investor Certificate has been announced. This scheme will allow
companies investing more than MUR 500 million (approximately USD 12.5 m) in
JUNE 2021 ocorian.com
Mauritius to negotiate their incentive requirements. 5. The Bank of Mauritius will roll-out a Central Bank
This is a bold measure which can attract multinational Digital Currency – The Digital Rupee – on a pilot basis;
companies to set-up in Mauritius to take advantage of 6. The Bank of Mauritius will introduce a dedicated QR
the five preferential trade agreements that Mauritius has Code at national level to facilitate digital payments;
recently signed namely the CECPA with India, the China 7. The Bank of Mauritius guidelines allowing the setting
FTA, the UK-ESA Agreement, the FTA with Turkey and the up of regional offices by international banks will be
African Continental FTA. revamped in line with latest international trends;
8. The Bank of Mauritius and the Financial Services
Particular emphasis was put on the Biotechnological and Commission will set up respectively an Open-Lab
Pharmaceutical Industry whereby the tax rate has been for banking and payment Solutions and a FinTech
reduced from 15% to 3% alongside a series of additional Innovation Lab to encourage an entrepreneurship
measures such as exemption of the registration, land culture; and
conversion and transfer tax and payment of VAT on 9. The Stock Exchange of Mauritius will introduce
construction material. Furthermore, all companies rules for the setting up of Special Purpose
operating in the Biotechnological and Pharmaceutical Acquisition Companies.,
Industry will be eligible for the Premium Investor
Certificate. A seed capital of MUR 1 billion is being Furthermore:
injected by the Government for the setting up of a plant
for the production of Covid-19 vaccines and international • A 5-year tax holiday will be granted on emoluments
players will be invited to participate in this initiative. of an asset manager, a fund manager or asset and
fund manager who manages an asset base of not less
It was strongly pointed out in the Budget Speech that than USD 100 million and who has been issued with a
the Government is fully committed to complete the certificate on or after 1 September 2016. Holders of
implementation of the FATF action plan the soonest a certificate issued on or after 1 September 2016 will
possible and to ensure that Mauritius is fully compliant be exempted from tax on their emoluments for an
with the AML/CFT framework recommended by the additional 5 years while new certificate holders will be
FATF. In addition to the measures that have already been eligible to a tax holiday of 10 years;
adopted, further steps will be taken for the purpose of • The threshold of USD 100 million in respect of asset
securing Mauritius an early exit from the grey list of the base being managed by an Asset/Fund Manager will
FATF of jurisdictions of increased monitoring. The legal be reduced to USD 50 million;
recognition of the AML/CFT Group under the AML laws, • The Income Tax Act will be amended to ensure that
the setting up of a dedicated body for the combat of foundations and trusts benefitting from a preferential
financial crimes, the revamping of banking legislations tax regime comply with the OECD standards,
and the introduction of AML-related training programme, including substantial activity requirements;
are all actions which are geared towards complying with • It is further noted that the requirement for Family Offices
internationally set standards. A sound and solid AML/CFT to have a Global licence will be eliminated; and
framework is seen as a sine-qua-non for the international • The partial exemption tax regime will be extended
business community to renew its full confidence in to cover investment dealers and other type of
Mauritius as an International Financial Centre and to take leasing activities.
advantage of the new and very attractive Special Purpose
Fund regime, the innovative initiatives namely the Secure Our view of the Budget Speech is that the Government
Token Offerings, the Digital Custodian license and the continues to lay a lot of emphasis on social coherence
forthcoming Variable Capital Vehicle regime. It is to be which is seen as a critical factor for the stability and
noted that a Financial Crime Commission will be set-up to growth of the nation. This philosophy is complemented
ensure that enforcement actions against financial crimes with a willingness to further opening up for foreign
are taken swiftly and for the preservation of Mauritius as talents and external capital. These are laudable initiatives
a jurisdiction of repute. Some of the key measures which which are in line with the principle of making Mauritius
have been announced for the Financial Services Sector a trade and business hub for the region. We are also
are as follows: extremely pleased with the emphasis put by the Minister
of Finance in his speech on the importance of being fully
1. A Securitisation Bill will be introduced; compliant with the FATF AML/CFT Action Plan. Mauritius
2. The tax holiday for Family Offices and Fund and is viewed by private investors and development financial
Asset Managers will be extended from 5 to 10 years; institutions as a jurisdiction of choice for channelling
3. A new Securities Bill will be introduced; much needed growth capital in Africa. The impact
4. A new legislation for virtual assets will be enacted; that these investments is making on the creation of
JUNE 2021 ocorian.com
wealth, decent jobs, community empowerment and factors to attract much needed talents, competence environmental preservation cannot be underestimated. and skills on the island and we would recommend that We therefore welcome all the measures announced to the Minister takes a fresh and pragmatic look at these not only allow Mauritius to be white listed by the FATF measures. The personal tax exemption on private pension and the EU but also to propose new regimes to investors investment is seen as a good gesture albeit a timid one. with a view to ensure maximum returns whilst operating in a low risk, stable, well-regulated and fully compliant It is refreshing and reassuring to see that no measures environment. The emphasis on skills development is also announced will change or amend the current fiscal extremely important so that the country can transform regime applicable to the Global Business Sector itself into a centre for value added work. Whilst it might which brings stability and predictability for operators have been seen as a surprise to see the Government still in the sector. investing in major infrastructure projects even when the Covid-19 pandemic have put very heavy constraints on Overall, it is a positive budget speech that will boost the national treasury and increase Government debt level the confidence of the business communities, further to unprecedented levels, we do understand the long- enhance social justice and nurture new and innovative term vision associated with these development initiatives. economic activities. The measures announced to open up for foreign talents We would like to hear your views. Please feel free to as well as their families have been well received and will contact us to provide us with your comments or if you further strengthen the ambition of Mauritius to be within have any questions on the measures announced. A copy the league of top rated International Financial Centres. of the Budget Speech alongside the supplementary However, we think that some elements of personal annexes are available on this link . taxation such as the solidarity levy increased last year and the general social contribution would be deterring The Senior Leadership Team Contact us For more information on our services for corporate, institutional and private clients visit ocorian.com or get in touch with our key contacts below. Robert Hovenier Mahen Govinda Leo Kruger Managing Director – Mauritius Operations Director Client Service Director T +230 403 6075 T +230 403 6115 T +230 403 6389 E robert.hovenier@ocorian.com E mahen.govinda@ocorian.com E leon.kruger@ocorian.com About Ocorian Ocorian is a global leader in fund administration, corporate and fiduciary services, and capital markets. Supporting and protecting global investment is our priority, with offices worldwide our global network is designed to deliver exactly what our clients need, exactly how and where they need it. Our approach is personal, professional and flexible. We take the time to understand our clients’ ambitions and work with them to deliver customised, scalable solutions that can be fully integrated across clients’ existing operations, processes and platforms. Bermuda | BVI | Cayman Islands | Guernsey | Hong Kong | Isle of Man | Ireland | Jersey | Luxembourg | Malta | Mauritius | Netherlands | Singapore | UAE | UK | Plus representative offices in the US IMPORTANT INFORMATION Information on the licensed/regulated entities of the Ocorian group (with details of the relevant regulatory authorities) may be found on our website: www.ocorian.com/legal-notice JUNE 2021 ocorian.com
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