From a tax standpoint, it makes sense why many foreigners have chosen to relocate and invest in Mauritius. The tax advantages here rank amongst the top 10 in the world.
Partly as a result of that ranking, Mauritius emerged no. 13 out of 190 countries and no. 1 in Africa in the 2020 World Bank Doing Business Report. This is a jump from 20th place the previous year and the highest for Mauritius since 2007.
Here are some of the tax advantages in Mauritius for residents and foreign investors:
double taxation agreements with more than 40 countries
income tax rate at a flat 15 percent
no taxes on dividends, capital gains, inheritance
nonrestricted repatriation of profits/dividends from companies outside Mauritius
full tax exemption for select imports/exports
exemption from customs duties on all merchandise imported through the free port.
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Residence permits
Foreigners enjoy tax advantages with the purchase of qualifying local real estate that gets them permanent residency in Mauritius. Those who buy a residential property worth more than USD375,000 in a government-approved property development scheme (PDS) will be eligible for a residence permit. What’s more, the children and spouse are eligible too.
Tax advantages in Mauritius are also available to foreigners acquiring property in existing projects under the Integrated Resort Scheme and Real Estate Scheme. The PDS now replaces the IRS and RES. Indeed, the same investment price point applies to those wanting a permanent resident’s permit. Buyers may rent the property for a good return. Moreover, the government does not restrict repatriation of revenue generated by rental or sale of the investment properties.
Tax perks for select economic activities
Export of goods
Mauritius does not impose export duties. Value-added tax is levied on raw materials for export at customs. This is reimbursable when the manufactured goods are exported. Notably, corporate income tax attributable to those goods is at a reduced rate of 3 percent.
Manufacture of pharmaceuticals and medical devices
Mauritius has also extended a tax holiday to manufacturers of pharmaceutical products and high-tech medical devices. These manufacturers are exempt from paying income tax for eight years from their first year.
SME development scheme
The development of small and medium enterprises (SMEs) in Mauritius is encouraged. SMEs are granted an SME Development Certificate that entitles them to an income tax holiday for their first eight years, amongst other tax concessions.
Seafaring vessels
The government exempts foreign owners of seafaring vessels registered in Mauritius from tax on income derived from their operations. This includes any income from charters. Furthermore, it also exempts owners of local vessels registered in Mauritius from paying tax on income derived from deep-sea international trade. All personnel working onboard a Mauritian-registered ship are exempt from Mauritius income tax.
Innovation-driven ventures
Local companies involved in innovation-driven development of intellectual property assets are exempt from income tax for eight years. The government included this amongst its tax incentives to position Mauritius as a fintech hub.
Similar tax holidays are being extended to e-commerce platforms and peer-to-peer lending ventures. The tax advantages in Mauritius that both enjoy are a five-year income tax exemption after establishment.
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