Sector Reviews
As the dust settles from the Budget Speech, here's our summary of key measures announced in Budget 2017.
Financial Services
- GBC1 companies
- FinTech
- Capital requirements
- Islamic Banking
- Local debt market
- Diversifying the source of funds for corporates
- Amendments to the Borrower Protection Act
- Special Purpose Funds
- A 10 year vision for the financial services sector
GBC1 companies
- The number of criteria to be fulfilled by GBC1 companies to demonstrate substance will increase from 1 to 2 out of the 6.
- The tax regime for GBC1 companies will be reformed to meet international requirements.
- GBL1 companies listed in another jurisdiction will no longer have to comply with the prospectus requirements of the Securities Act 2005 and Securities (Public) Rules 2007 in Mauritius. Only the SEM Listing Rules will be applicable to these companies.
FinTech
- A regional FinTech Association will be created to help the sharing of industry knowledge of international regulations.
- FinTech will be regulated by the FSC.
Capital requirements
- The minimum capital for banks will be increased from Rs200m to Rs400m.
- Existing banks will be allowed 2 years to meet the new capital requirement.
Islamic Banking
- The Companies Act will be amended to allow Islamic banks to adopt accounting standards from the Accounting and Auditing Organization for Islamic Financial Institutions.
Local debt market
- An international capital market will be setup to issue multi currency bonds in Mauritius.
Diversifying the source of funds for corporates
- The issuance of commercial papers and Sharia compliant instruments will be licensed and regulated by BoM.
Amendments to the Borrower Protection Act
- Lenders will not be allowed to claim arrears to guarantors in the event that they have not informed the borrowers 2 months following default.
- The sale of immovable property will be restricted for 2 years in case the borrower is redundant on economic grounds.
Special Purpose Funds
- Special Purpose Funds will be legally obliged to be aligned to GBC1 companies.
A 10 year vision for the financial services sector
- A 10 year vision blueprint will be developed in collaboration with the EDB, BoM, FSC and stakeholders of the sector.
- It will ensure that financial services sector remains competitive in the international market.
Manufacturing & SMEs
- Manufacturing
- SMEs
- Sugarcane
- Non-sugar
- Tea
- Livestock
- Bio-farming
Manufacturing
- A special economic zone will be inaugurated in Senegal;
- Land on preferential terms will be secured in Ivory Coast;
- An Innovator Occupation Permit scheme will be established;
- Accelerated depreciation of 50% will be introduced on CAPEX incurred on research and development (R&D);
- Double deduction on qualifying expenditure on R&D will be in place until 2021/22;
- High tech machines will be included in the minimum investment of USD100,ooo for granting Occupational Permits to foreign investors;
- The 8-year work permit to expatriates working in export manufacturing activities will be extended and the time to issue or renew permits will be reduced from 40 to 15 days;
- A food processing development certificate will be introduced to promote the importation of raw materials for processing in Mauritius and exportation;
- An 8-year income tax holiday will be introduced for new companies in pharma, medical and high tech products, and on income from Intellectual Property Assets.
SMEs
- The speed to market scheme will be extended to the export of jewelries, medical devices, fruit, flowers, vegetables and chilled fish;
- 4 new market fairs will be setup on the island;
- Export loan facilities at favourable rates will be launched;
- Equity financing will be provided to SMEs through the SME Venture Capital Fund;
- A new solar panels scheme will be introduced with the initial 2kw financed by the CEB.
Sugarcane
- VAT refunds and financing facilities will be made available under LEMS for the replacement of old lorries.
Non-sugar
- A Bio-Technology institute will be setup;
- Funds will be made available to support the importation of macadamia seeds to help promote diversification.
Tea
- VAT refunds and excise duty exemptions will be made available on the purchase of specified equipment and tools;
- Exemptions will be provided for Building & Land Use permits for greenhouses;
- An SME scheme will be introduced for planters by the commercial banks;
- DBM loans will be given to planters for damaged crops.
Livestock
- Customs duty on animal feeds, except for poultry and pets, will be removed;
- A subsidy of Rs10m will be introduced on the price of concentrate feeds.
Bio-farming
- A subsidy will be introduced on the cost of bio-pesticides.
Public Sector
- Transparency
- Reforms
- Social housing
- Healthcare
- Water and waste management
- Public transport
- Maritime Port and Airport
- Other projects
Transparency
- The Build Mauritius Fund and National Resilience Fund will be consolidated.
- The Public Debt Management Act will be amended to base the public debt ceiling on gross debt (instead of net), provide new targets for complying with the ceiling and broaden the coverage of loan guarantees by the Government.
Reforms
- An Economic Development Board will be established and will be responsible for national and sectorial developments, the promotion of investments and exports and the e-licensing business platform.
- A National Economic and Social Council will be setup to promote dialogue with the private sector and civil society.
- The Mauritius Research Council will be transformed into the Mauritius Research and Innovation Council to manage the National Innovation and Research Fund
- Mauritius National Investment Authority will be established to invest the Rs130bn surplus funds of the NPF and NSF.
Social housing
- Social and low income housing units will be constructed.
Healthcare
- 624 personnel will be recruited.
- A number of hospital infrastructures will be built or expanded.
Water and waste management
- Rs210m will be invested in the installation of steel tanks in 21 regions.
- Rs135m will be invested in 15 mobile treatment plants.
- Investments will be made in mobile treatment plants.
- Duplicate boreholes will be drilled on 13 sites to avoid interruptions in the water supply.
- The capacity of existing reservoirs will be expanded and new ones built.
- Rs2.3bn will be invested in the replacement of 264km of pipes.
Public transport
- The Metro Express project will start on site in September 2017.
- The Jumbo-Phoenix round-about and the A1M1 Bridge will start in October 2017.
- A new road will be built connecting La Vigie and La Brasserie and eventually Beaux Songes.
- A second fly-over will connect the M1 to the Terre Rouge Verdun.
Maritime Port and Airport
- A new passenger terminal will be built at the maritime port.
- The old passenger terminal at the airport will be renovated.
Other projects
- Rs590m will be provided for the construction, extension and upgrading of public primary and secondary schools.
- Modern headquarters will be setup for the National Coast Guards.
- Highlands will be modernized as part of the Côte D’or City project that will include a new sports complex.
- Ébène Cybercity will be upgraded to include multimodal streets, walkable blocs and dedicated public spaces.
Real Estate & Hospitality
- Duties and taxes
- Smart Cities and IHS
- Other initiatives
- Hospitality
Duties and taxes
- No registration duty (RD) and land transfer tax (LTT) on the transfer of immovable properties for high-tech manufacturing.
- No RD on the lease or sublease of immovable properties for health institutions.
- No RD on the lease or sublease of land exceeding 10 hectares used by small planters.
- RD, LTT and leasehold tax on state land will be refunded if no change in effective ownership.
- One year from deed registration date to apply for a refund if exempted from property taxes.
Smart Cities and IHS
- 10 years for Mauritian citizens to construct residence on his serviced plot of land.
- Owners of bare serviced land will be allowed to sell their properties. The new owners have to abide by the 10-year rule.
- Promoters of smart city projects will contribute Rs25,000 to a social fund for each residential unit or serviced plot sold.
- Non citizens investing at least USD500,000 in Incentive Hotel Schemes will be entitled to a residence permit.
Other initiatives
- Plan approvals from CEB, CWA and the WMA will not be required in well networked and serviced zones.
- Land lots where each lot exceeds 5 hectares will only need approval of the relevant local authority (no Morcellement Permit needed).
- 5-year multi-entry visa for non-citizens acquiring residential properties for less than USD500,000.
Hospitality
- A new cruise terminal at Les Salines and a new quay for leisure crafts and fishing boats at Vieux Grand-Port.
- The construction of a second airport terminal will be brought forward.
- The KLM Amsterdam-Mauritius route will open up new markets.
- Asia Africa Air corridor: additional weekly flight to Singapore by Air Mauritius.
- The MTPA and the Kenyan authorities will promote the Bush & Beach concept.
- Hotels will be allowed to host gaming machines on their premises for non-residents and foreigners.
- “Moris nou zoli péi”: Embellishment and up-haul of public beaches.
ICT
- Innovation
- Skills Development
- Business Facilitation
Innovation
- Investments will be made in 3D printers to support manufacturing firms, university students and startups.
- Drone technology in agriculture will be promoted to help assess and monitor crop performance.
Skills Development
- Digital entrepreneurship in robotics, Big Data and Internet of Things will be promoted.
- A Digital Youth Engagement Programme will be setup by the National Computer Board to provide programming courses.
- Rs130m will be invested in polytechnics to bridge the skills gap in industries including ICT.
Business Facilitation
- The Data Protection Act will be amended to comply with EU regulations to encourage companies in the ICT sector to use Mauritius as a platform.
- An Open Data Portal for the exchange of public datasets will be setup.
- An e-platform will be introduced to provide more visibility to SME products.
- A “Plug and Play” cloud computing platform will be setup to attract digital nomads.
- A Mauricloud platform will be created to issue and verify digital documents and certificates.
Contact us
Anthony Leung Shing, ACA, CTA
EMA Deputy Regional Senior Partner, Country Senior Partner, PwC Mauritius
Tel: +230 404 5071
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