This piece highlights issues for consideration when starting a foreign business in Mauritius in four areas: 1) foreign business start-up, 2) access to industrial land, 3) foreign ownership issues across sectors, and 4) commercial dispute arbitration.
Foreign Business Start-Up
It takes 9 procedures and 11 days to establish a foreign-owned limited liability company (LLC) in Port Louis, Mauritius. This is faster than the IAB regional average for Sub-Saharan Africa and the IAB global average. In addition to the procedures required of domestic companies, the parent company must legalize and apostille its documents in the country of origin. If the capital invested is $10,000,000 or more (the investment is considered a “qualifying investment” under the Investment Promotion Act), the foreign company must apply to the Board of Investment for an investment certificate. This takes 3 days. A minimum projected annual turnover of more than MUR 3,000,000 (~ $99,330) is a prerequisite for the investment certificate. If a company wants to engage in international trade, it must register with customs authorities as an importer/exporter and get a trade license from the municipal council of Port Louis. Forms and information on company registration are downloadable online. The registration application can also be completed online. Companies are free to open and maintain bank accounts in foreign currency. There is no minimum capital requirement to establish foreign or domestic LLCs in Mauritius.
Access to Industrial Land
Foreign companies seeking to access land in Mauritius may lease or buy privately or publicly held land. If the company seeks to hold the land for more than 20 years, it will require approval from the Board of Investment or the relevant minister. The sale of publicly held land is not common. Publicly held land is leased through a public auction. Land may be leased for a maximum of 99 years. Public leases granted for industrial or commercial purposes have a maximum duration of 60 years. The lease contract can offer the lessee the right to sublease, subdivide, and/or mortgage the leased land. If the lessee seeks to transfer the land to another foreign entity, consent is required from the relevant minister or the Board of Investment. Land-related information may be found at the Conservator of Mortgages’ Office. The Board of Investment has created a Property Acquisition and Management System that allows online submission and processing of applications to acquire property for business purposes.
Foreign Ownership Issues across Sectors
Of the 33 sectors covered by the report, 32 are fully open to foreign capital participation in Mauritius. The only exception is the TV broadcasting industry. According to the Independent Broadcasting Authority Act, foreign capital participation in TV broadcasting companies must be less than 20%. Moreover, the share of foreign members of the board of directors must not exceed 20%. In addition to these overt legal restrictions, sectors such as electricity transmission and distribution, waste management and recycling, and port and airport operation are characterized by monopolistic market structures, with one dominating publicly owned enterprise, making it difficult for foreign companies to invest.
Commercial Dispute Arbitration
Mauritius’s International Arbitration Act (2008) regulates only international arbitrations taking place within the country. Domestic arbitrations are governed by the Code de Procédure Civile. The arbitration law is available online. Most commercial disputes are arbitrable, except those involving bills of exchange. The law does not specifically stipulate that an arbitration agreement may be severable from the main contract. In practice, however, domestic courts have recognized this principle. Arbitration agreements must be in writing. The parties may appoint arbitrators of any nationality, gender, or professional qualifications for both domestic and international arbitrations. Only Mauritian lawyers, however, may represent parties in domestic arbitrations. The law does not require arbitrators to preserve confidentiality of arbitration proceedings in either domestic or international arbitrations. Arbitration awards are enforced in the Supreme Court, and decisions regarding enforcement can be appealed to the Judicial Committee of the Privy Council. On average, it takes around 16 weeks to enforce an arbitration award rendered in Mauritius, from filing an application to a writ of execution attaching assets (assuming there is no appeal), and 11 weeks for a foreign award.
Source: Investment Across Borders Report by The World Bank. The World Bank authorizes the use of this material subject to the terms and conditions on its website, http://www.worldbank.org/terms.”
