The 2020/21 Mauritius Budget (the Budget) entitled, "Our new normal: the economy of life" has been presented whilst the country still battles with the impact of Covid-19. It is a tricky balancing act: restarting an economy that has almost been brought to a standstill following the pandemic, whilst having to boost badly affected revenues.
The government's strategy to create a platform for sustainable growth in a "new normal" world is commendable. Additional measures announced in the Budget, such as those aimed at attracting foreign talent, will also help to boost the development of emerging sectors such as Fintech.
In relation to the financial services sector, the commitment to ensure compliance with international norms is critical, and embracing diversification through innovative technology and financial products will ensure that we have a competitive edge. The target has been set: the jurisdiction needs to thrive in the "new normal" beyond merely addressing current challenges.
We have outlined below the key measures that will be relevant for companies operating in the Global Business sector, along with our analysis on the potential implications for their business.
1. Regulatory framework
The Government has responded to the threat of the EU list of high-risk jurisdictions and has shown its commitment to address the jurisdiction's deficiencies in relation to the Financial Action Task Force (FATF) recommendations by September 2020. The following measures will be implemented:
- risk-based supervisions in accordance with the recommendations of the FATF;
- targeted outreach programmes to promote clear understanding of money-laundering and terrorist financing risks;
- increased reporting of suspicious transactions;
- targeted financial sanctions in cases of terrorist financing; and
- timely access to beneficial ownership information.
The Government will strengthen the current legislative framework by introducing a new AML/CFT (Miscellaneous Provisions) Bill.
The Government will also set up a dedicated and specialised Financial Offences Court.
Regulatory framework analysis
The Government is determined to convince the EU to keep Mauritius off the list of high-risk jurisdictions, and it has until the end of September 2020 to do so as the list is expected to be effective from 1st October 2020. We hope that the measures announced will be implemented swiftly and on a timely basis to remediate the gap in AML/CFT compliance in Mauritius. The new AML/CFT legislation should contain robust and forward-looking provisions that not only solve current problems, but also set the scene for the adoption of international norms and practices. This is critical for the reputation and success of our financial sector.
2. Business facilitation
The Government has announced a number of incentives to encourage foreigners to live, work and invest in Mauritius:
- The Work Permit and Residence Permit will be combined into one single permit.
- The Government will be lengthening the validity of an Occupation Permit (OP) and a Residence Permit for retirees to 10 years renewable.
- The minimum investment amount for obtaining an OP will be reduced from USD 100,000 to USD 50,000.
- The minimum turnover and investment requirements for Innovator Occupation Permits are being removed.
- The spouse of an OP holder will not need a permit to invest or work in Mauritius.
- OP holders will also be allowed to bring their parents to live in Mauritius.
- Professionals with an OP and foreign retirees with a Residence Permit will be able to invest in other ventures without any shareholding restriction.
- Non-citizens who have a residence permit under the various real estate schemes will no longer require an Occupation or Work Permit to work and invest in Mauritius. ix. The Permanent Residence Permit will be extended from 10 to 20 years.
- OP and Residence Permit holders will be eligible to apply for a Permanent Residence Permit if they have held the permit for three consecutive years.
- The minimum investment amount for an investor to obtain the status of Permanent Resident or for a holder of an immovable property under an existing scheme to obtain the status of Resident will be reduced from USD 500,000 to USD 375,000.
- Non-citizen holders of Residence Permit, Occupation Permit or Permanent Residence Permit will be allowed to acquire one plot of serviced land not exceeding 2,100 m2 for residential purposes within Smart Cities.
The Central Bank will set up a centralised KYC platform.
The Corporate and Business Registration Department (CBRD) will become the central repository for all business information and licences through a digital platform.
Business facilitation analysis
At a time when many amongst the worst hit nations are showing a tendency for isolationism, it is encouraging to see Mauritius pursuing its opening to the world with renewed vigour. Making it easier for foreign nationals to live, work and invest in Mauritius is a welcome move, more so in the face of an ageing population and a dearth of competencies in innovative and specialist sectors. On the business facilitation side, supportive measures such as the Centralised-KYC platform will be a real game changer if implemented swiftly. Such a platform will accelerate on-boarding and related AML/KYC processes to allow clients to set up their businesses faster and more smoothly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.