GUIDE - MAURITIUS FINANCE ACT, 2020...06 Our Firm 07 Our Footprint in Africa 08 Income Tax 12 Value...
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GUIDE - MAURITIUS FINANCE ACT, 2020
Transcript of GUIDE - MAURITIUS FINANCE ACT, 2020...06 Our Firm 07 Our Footprint in Africa 08 Income Tax 12 Value...
GUIDE - MAURITIUS FINANCE ACT, 2020
BOWMANS
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BOWMANS
Contents
04 Introduction
06 OurFirm
07 OurFootprintinAfrica
08 IncomeTax
12 ValueAddedTax
13 PropertyTax
14 TaxAdmnistration
15 CompaniesAct
16 FinancialServices
18 InsolvencyAct
19 Banking
21 Employment
24 COVID-19Measures
25 BusinessFacilitation
26 Immigration
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Guide – Mauritius Finance Act, 2020
Introduction
In2020,threemajorlawshavemarkedthe
legislativelandscapemakingfar-reaching
reformstouchinguponavarietyofsectorsofthe
economypartlyinresponsetothechallengesthis
pastyearhasbroughtabout.
Earlierduringtheyear,withtheurgencycreated
bytheCOVID-19pandemicandthelockdownin
Mauritius,theParliamentpassedtheCOVID-19
(MiscellaneousProvisions)Act2020(COVID-19
Act)whichmadeamendmentsto56legislations
tocaterfortheimpactofthecoronavirus
andprovidedfortherelaxationofcertain
requirementsduringtheaffectedperiod.
ThiswasfollowedbytheAnti-MoneyLaundering
andCombatingoftheFinancingofTerrorism
(MiscellaneousProvisions)Act2020(AML/CFT
Act)whichwaspassedbytheNationalAssembly
on07July2020tobringfurtherreformsinthe
financialservicessectorinordertocomplywith
therecommendedinternationalbestpracticesof
theFinancialActionTaskForce(FATF).
TheAML/CFTActisaveryimportantpieceof
legislationandatimelyresponsetotheFATF
andEuropeanUnionfollowingtheinclusionof
MauritiusontheFATF’slistof‘Jurisdictionsunder
IncreasedMonitoring’andtheEU’slistofhighrisk
thirdcountries.
Finally,theFinanceActgiveseffecttothe
measuresannouncedintheBudgetSpeech
2020-2021‘OurNewNormal–TheEconomy
ofLife’.TheFinanceActislargelydesigned
tocopewiththenewnormalfollowingthe
COVID-19pandemicandisacontinuityofthe
majorstructuralreformsbeingimplementedby
theGovernment.
Inparticular,theuseofdigitaltechnology
hasbeenintroducedinkeylegislationsasa
meansofcompliancewithlegalobligationsand
companiesengagedinthetourismindustry
thataremostaffectedbytheaftermathofthe
coronavirushavebeengrantedtimeextension
forthepaymentcorporatetaxdues.
TheFinanceActbroughtamajorstructural
reformtotheNationalPensionsystem.With
effectfrom01September2020,theexisting
NationalPensionFundwillbereplacedbythe
ContributionSocialeGénéralisée(CSG).Under
thenewsystememployersandemployeesof
theprivatesectorand(now)self-employed
willberequiredtocontributetotheCSGat
theratestobeprescribedbytheMinisterof
Financeinrespectoftheirremuneration.
The President of Mauritius assented to the Finance (Miscellaneous Provisions) Act 2020 (Finance Act) on 7th August 2020. This follows the passing of the Finance Act by the National Assembly on 4th August 2020.
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WhiletheFinanceActdoesnotspecifythe
amountthatneedstobecontributedtothe
CSG,theMinisterofFinancehas,inhisBudget
Speech,proposedaprogressivesystem,
wherebyinrespectofemployeesearningup
toMUR50000,acontributionattherateof
1.5%mustbemadebytheemployeesand3%
bytheiremployersandinrespectofemployees
earningmorethanMUR50000,acontribution
of3%mustbemadebytheemployeesand6%
bytheiremployers.
AcontributionofMUR150(approx.USD3.75)
hasbeenproposedforself-employedpeople.
TheapplicationoftheCSGonthesalariesof
employeeswithnocappedamount(aswas
previouslythecase)isadisguisedtaxonthe
contributoriesandanadditionalburdenon
businessesinthesedifficulttimes.
Further,thelowflatrateMUR150(approx.
USD3.75)applicabletoself-employedpeople,
questionsthefairnessofthesystemsasthis
wouldmeanthatemployeesearningthe
minimumwagewouldcontributethesame
amounttotheCSGashighincomeearningself-
employedpeoplesuchastoplawyers,doctors
andengineers.
Whileitwaswidelyacknowledgedthatnational
pensionsneededreforminviewoftheageing
populationandincreasedsocialbillsbrought
aboutbycertainrecentpopulistmeasures,itis
notentirelyclearhowtheCSGremainsinline
withneedtoenhancethecompetitivenessof
theeconomyinthewakeofcertaincrisesthat
appearpoisedtoendureforthetimestocome.
Thisbriefsetsoutahigh-levelsummaryofthe
mainchangesmadebytheFinanceAct.
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Guide – Mauritius Finance Act, 2020
Our Firm
Ourtrackrecordofprovidingspecialist
legalservicesinthefieldsofcorporate
law,bankingandfinancelawanddispute
resolution,spansoveracentury.
WithnineofficesinsevenAfricancountries
andover400specialistlawyers,wedrawon
ouruniqueknowledgeofthebusinessand
socio-politicalenvironmenttoadviseclients
onawiderangeoflegalissues.
Everywherewework,weofferclientsa
servicethatuniquelyblendsexpertiseinthe
law,knowledgeofthelocalmarketandan
understandingoftheirbusinesses.Ouraim
istoassistthemtoachievetheirobjectives
assmoothlyandefficientlyaspossiblewhile
minimisingthelegalandregulatoryrisks.
Ourclientsincludecorporates,multinationals
andstate-ownedenterprisesacrossarangeof
industrysectorsaswellasfinancialinstitutions
andgovernments.
Ourexpertiseisfrequentlyrecognisedby
independentresearchorganisations.We
receivedawardsinthreeoutoffourcategories
attheDealMakersEastAfricaAwardsfor
2019:toplegaladviserintheM&ACategory
forbothdealflowanddealvalue,andadvised
ontheDealoftheYear.IntheDealMakers
SouthAfricaAwardsfor2019,wewereplaced
thirdfordealvalueintheM&ACategoryand
advisedonboththeDealoftheYearandthe
BEEDealoftheYear.
We help our clients overcome legal complexity and unlock opportunity in Africa.
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Our Footprint in Africa
Mozambique
Kenya
Tanzania
South Africa
Nigeria
Uganda
Mauritius
Best friends
Bowmans offices
Significant transaction or advisory experience
Alliance firms
Ethiopia
Weprovideintegratedlegalservices
throughoutAfricafromnineoffices
(CapeTown,DaresSalaam,Durban,
Johannesburg,Kampala,Lilongwe,Lusaka,
MokaandNairobi)insevencountries
(Kenya,Malawi,Mauritius,SouthAfrica,
Tanzania,UgandaandZambia).
Weworkcloselywithouralliancefirm,
AmanAssefa&AssociatesLawOffice,
inEthiopia,andourbestfriendsinNigeria
andMozambique(UdoUdoma&Belo-Osagie
andTacianaPeãoLopes&Advogados
Associados,respectively).Wealsohave
strongrelationshipswithotherleadinglaw
firmsacrosstherestofAfrica.
WearerepresentativesofLexMundi,aglobal
associationwithmorethan160independent
lawfirmsinallthemajorcentresacrossthe
globe.Thisassociationgivesusaccesstothe
bestfirmsineachjurisdictionrepresented.
Malawi
Zambia
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Guide – Mauritius Finance Act, 2020
Thefollowingarethemainamendments
madetotheIncomeTaxAct(ITA):
1. Personal Income Tax
Solidaritylevy
TheFinanceActhasincreasedtherateof
solidaritylevyapplicabletoindividualsfrom
5%to25%andhasreducedthethresholdof
theleviableincomefromMUR3.5million
(approx.USD87500)toMUR3
million(approx.USD75000).
Acaphasbeenintroducedonthesolidaritylevy
attherateof10%ofthesumofanindividual’s:
• Netincome(excludinganylumpsum
bywayofcommutationofpension,
deathgratuityorasconsolidated
compensationfordeathorinjury
payablepursuanttoanyenactment,
fromasuperannuationfundorunderan
approvedpersonalpensionscheme);
• Dividendincomereceivedfromtax-resident
companiesandcooperativesocieties;and
• Shareofdividendasapartnerofa
Mauritianresidentpartnershiporheirina
successionhadanydividendreceivedby
thepartnershiporsuccessionbeenwholly
distributedamongthepartnersorheir.
Further,thePayAsYouEarn(PAYE)system
willnowapplytotheSolidarityLevy.Where
theemolumentsofanemployeeexceedsMUR
230769(approx.USD5770)inamonth,the
employerisrequiredtowithhold,inaddition
tothe15%incometax,anadditionaltaxonthe
amountexceedingMUR230769attherateof
25%,providedthattheadditionaltaxwithheld
doesnotexceed10%oftotalemoluments.
Commentary
Thesolidaritylevywasintroducedinthe
FinanceAct2017asameasuretoreduce
Income Tax inequalityandappliestotax-residentindividuals
havingchargeableincomeplusdividends
(whichisanexemptincome)inexcessofthe
prescribedthresholdofleviableincome(which
waspreviouslyatMUR3.5million(approx.
USD87500)andisnowatMUR3million).
Thesolidaritylevyispayableontheexcess
amount.Theincreaseintherateofsolidarity
levywillresultinindividualshavingchargeable
incomeinexcessofMUR3million(approx.
USD75000)beingtaxedatamarginaltax
rateofupto40%.Thesolidaritylevywas
previouslypayablethroughthesystemof
self-assessment.Inrespectofemployees
earningmorethanMUR230769,thesolidarity
levywillnowbepayablethroughthePAYE
system.However,anysuchemployee,who
duringanincomeyearderivesincomefrom
othersources,willcontinuetopaysolidarity
levyundertheself-assessmentsystem.
Incomeexemptionthresholdfor
tax-residentindividuals
Theamountofincomeexemptionthreshold
thattax-residentindividualsmaydeductfrom
theirnetincomehasbeenincreasedasfollows:
• CategoryA(individualhavingno
dependants):FromMUR310000
(approx.USD7750)toMUR325
000(approx.USD8125);
• CategoryB(individualhavingone
dependant):FromMUR420000
to(approx.USD10500)MUR435
000(approx.USD10875);
• CategoryC(individualhavingtwo
dependants):FromMUR500000
(approx.USD12500)toMUR515
000(approx.USD12875);
• CategoryD(individualhavingthree
dependants):FromMUR550000
(approx.USD13750)toMUR600
000(approx.USD15000);and
• CategoryE(individualhavingfourormore
dependants):FromMUR600000(approx.
USD15000)toMUR680000(approx.
USD17000).
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2. Corporate Income Tax
Extensionofreducedincometaxrateof3%
Thebenefitofthereducedincometaxrateof
3%hasbeenextendedtofreeportoperators
andprivatefreeportdevelopersengagedin
theretreadingofusedtyresandrecycling
ofwastemeantforthelocalmarket.
Commentary
Thebenefitofthe3%reducedincometaxrate
iscurrentlylimitedtocompaniesengagedin
exportofgoodsandfreeportoperatorsand
privatefreeportdevelopersengagedinthe
manufactureofgoodsmeantforlocalmarket
inwholeorinpart,subjecttosuchcompanies
employingaminimumoffivestaffmembers
andincurringanannualexpenditureexceeding
MUR3.5million(approx.USD87500).
ManufactureisdefinedintheITAas’the
transformationofmaterialsorsemi-processed
materialsintofinishedorsemi-finishedgoods
andincludesassemblyofpartsintoapieceof
machinery,equipmentorproduct’.TheFinance
Acthasincludedtheretreadingofusedtyres
andrecyclingofwasteasamanufacturing
activitysuchthatfreeportoperatorsandprivate
freeportdevelopersengagedinsuchactivities
meantforthelocalmarketinwholeorinpart
cannowbenefitfromthefiscalincentive.Thisis
partofthemeasurestakenbytheGovernment
forthetransitiontowardsacirculareconomy.
Solidaritylevyapplicabletotelephony
Thesolidaritylevyontelephoneservice
providerschargedattherateof5%of
accountingprofitand1.5%ofturnover,
whichcurrentlyappliesuntiltheyearof
assessmentcommencingon01July2019,
hasbeenextendedtothesubsequentyear
ofassessmentandisnowpermanent.
Taxholidays
Aneight-yearincometaxexemptionhas
beenintroducedonthefollowingincome:
• Incomederivedfrominlandaquaculturein
Mauritiusbyacompanywhichhasstarted
itsoperationsonorafter04June2020;
• Incomederivedbyacompanywhich
hasstarteditsoperationsonorafter
04June2020andapprovedbytheHigher
EducationCommissionasabranchcampus
ofaninstitutionwhichranksamongthefirst
500tertiaryinstitutionsworldwide;and
• Incomederivedfromthemanufacturingof
nutraceuticalproductsbyacompanywhich
hasstarteditsoperationsonorafter
04June2020.
Thetaxholidaysstartfromtheincomeyearin
whichthecompanyhasstarteditsoperations.
Allowanceforcapitalexpenditures
Electronic, high-precision or automated
machinery or equipment
Apersonwhohasincurredcapitalexpenditure
onelectronic,high-precisionorautomated
machineryorequipmentonorafter01July
2020,cannowclaima100%annualallowance
inthatincomeyear,providedtheperson
doesnotalsoclaimanannualallowance
underthenormalannualallowancerules.
Plant and machinery
Amanufacturingcompanythatincurscapital
expenditureonnewplantandmachinery
(excludingmotorcars)duringtheperiodfrom
1July2020to30June2023,cannowclaim,
intheyearofacquisitionandineachofthe
twosubsequentincomeyears,ataxcredit
equivalentto15%ofthecostofsuchnew
plantandmachinery(excludingmotorcars).
Acompanythathasincurredcapital
expenditureontheacquisitionofnewplant
andmachinery(excludingmotorcars)during
theperiod01March2020to30June2020and
whichhasbeenadverselyaffectedbyCOVID-19,
canclaimadeductionof100%ofsuchcapital
expenditurebywayofinvestmentallowance
inthatincomeyear,inadditiontoanyother
annualallowancethatitmaybeentitled.
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Guide – Mauritius Finance Act, 2020
Doublededuction
Expenditure on medical research and
development
Apersonengagedinmedicalresearch
anddevelopmentthatincursexpenditure
onmedicalresearchanddevelopment
carriedoutinMauritius,shallbeallowed
adoubledeductionofthatexpenditure
fromhisorhergrossincome.
Expenditure incurred on patents and
franchises
Acompanythatincursexpenditureforthe
acquisitionofpatentsandfranchisesand
coststocomplywithinternationalquality
standardsandnorms,maydeductfrom
itsgrossincome,twicetheamountofthe
expenditureincurredinthatincomeyear.A
companythatclaimssuchadoublededuction,
willnotbeentitledtoanyotherannual
allowanceinrespectofsuchexpenditures.
Extensionoftimeforpaymentofincometaxfor
companiesoperatinginthetourismindustry
Companiesengagedinspecifiedactivitiesin
thetourismindustryand(a)havingaccounting
periodendingonanydateduringtheperiod
September2019toJune2020or(b)having
duedateforpaymentoftaxundertheadvance
paymentsystem(APS)duringthecalendar
year2020,willbeallowedthefollowing
extensionoftimeforpaymentofannualincome
taxortaxpayableundertheAPSsystem:
• halfofthetaxmustbepaidby
29December2020;and
• theremaindermustbepaidby28June
2021.
Measuretargetedtocompaniescarryingonlife
insurancebusiness
Companiescarryingoutlifeinsurancebusiness
canopttobeliabletotaxonthehigherof
theactualbasisoftaxor10%oftheprofit
attributabletoshareholders,adjustedforcapital
gainsandlosses(AlternativeMinimumTax).
Commentary
Insurancecompaniesthatcarryoutlife
insurancebusinessareentitledtomake
certainadjustmentstotheirtotalnetincome
suchthatpartoftheincomefromthelife
insurancebusinessareexcludedfromthat
netincome.Withtheintroductionofthe
AlternativeMinimumTax,insurancecompanies
willbesubjecttoaminimumtaxbasedon
theprofitsofthecompanyasawholeand
maybeatadisadvantage.Theamendments
totheITAdonotclarifywhatconstitute
‘profitattributabletoshareholders’andthis
couldgiverisetopracticalchallenges.
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Guide – Mauritius Finance Act, 2020
ThekeyamendmentstotheValueAdded
TaxAct(VATAct)areasfollows:
Introductionofarm’slengthprincipletoVAT
Whereasupplyisnotmadeinthecourse
ofanarm’slengthtransaction,thevalue
ofthesupplywouldnowbetheopen
marketvalueofthesupplyorsuchother
amountastheMRAmaydetermine.
Commentary
Theamendmentsdonotlimittheapplication
ofthearm’slengthprincipletotransactions
betweenrelatedparties.Wehopethatthe
MRAissueguidelinesastowhatwould
constituteatransactionthatisnotentered
intoatarm’slengthandhowtheopenmarket
valueofthesupplywouldbeascertained.
Reversecharge
Thereversechargeprovisiononsupplyof
servicesreceivedfromabroadhasbeen
amendedsuchthatitisnowapplicable
onlyif(a)thetaxablesupplyperformedor
utilisedinMauritiusismadebyaperson
whodoesnotbelonginMauritiusandis
notVATregistered;and(b)therecipient
ofthesupplyisaVATregisteredperson.
Commentary
Taxablesupplyofservicesmadebyaforeign
supplierandperformedorutilisedinMauritius
wassubjecttoVATunderthereversecharge
mechanismirrespectiveofwhetherthe
recipientisVATregisteredornot.However,the
applicationofreversechargesysteminrespect
ofarecipientwhoisnotVATregisteredwas
suspended.TheamendmentstotheVATAct
clarifythatthereversechargeisapplicable
onlywheretherecipientofthetaxablesupply
performedorutilisedinMauritiusisaVAT
registeredpersonandtheforeignsupplieris
Value Added Tax notVATregistered.Whereaforeignsupplier
registersforVATinMauritiusforthesupplyof
servicesperformedorutilisedinMauritius,the
provisionsrelatingtoreversechargewillnot
beapplicabletotherecipientoftheservices.
VATondigitalorelectronicservicessupplyby
aforeignsupplier
Thesupplyofdigitalorelectronicservices
byaforeignsuppliertoapersoninMauritius
willbesubjecttoVAT.Aforeignsupplieris
definedasapersonwhohasnopermanent
establishmentinMauritius,hashisorherplace
ofabodeoutsideMauritiusandsupplies,in
thecourseofbusinessdigitalorelectronic
servicesinMauritius.Digitalorelectronic
servicesisdefinedassuchservicesasmaybe
prescribedwhichissuppliedby(a)byaforeign
supplierovertheinternetoranelectronic
networkwhichisreliantontheinternet;or
(b)byaforeignsupplierwhoisdependent
oninformationtechnologyforitssupply.
Commentary
Thismeasurewouldrequireforeignsuppliers
whomaketaxablesuppliesofdigital
orelectronicservicestoberegistered
inMauritiusforVATpurposesandto
apply15%VATontaxablesupplies.
Apportionmentofsuppliesforinputtaxclaims
WhereaVATregisteredpersonisengagedin
aprojectspanningoverseveralyearsandthe
MRAisoftheopinionthattheapportionmentof
inputtaxbetweentaxablesuppliesandexempt
suppliesonapro-ratedbasisisnotappropriate,
itmayrequiretheregisteredpersontoapplyan
alternativebasisofapportionmentforinputtax.
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Land (Duties and Taxes) Act
TheLand(DutiesandTaxes)Acthasbeen
amendedtoextendthelistofexemptionfrom
landtransfertaxtoincludethetransferofa
portionoffreeholdlandduringtheperiodfrom
01July2020to31December2020,toa
companyundertakingconstructionofhousing
estatesofatleastfiveresidentialunitsprovided
thattheconstructioniscompletedby
31December2021.
Thetransferofshares,assets,or
propertytoasubsidiaryoftheBank
ofMauritiusisnowexemptedfrom
registrationdutyandlandtransfertax.
Registration Duty Act
Exemptionfromregistrationduty
Thefollowingarenowexempted
fromregistrationduty:
• Thetransferofaportionoffreeholdland
duringtheperiodfrom01July2020
to31December2020,toacompany
undertakingconstructionofhousing
estatesofatleastfiveresidential
unitsprovidedthattheconstruction
iscompletedby31December2021;
• Theacquisitionofimmovableproperty
foruseasaLifeScienceResearch
CentrecertifiedbytheEconomic
DevelopmentBoard;and
• Theissueortransferofsharesincompanies
tradingontheventuremarketoperated
bytheStockExchangeofMauritius.
Extensionofexemption
Theexemptionfromregistrationdutyon
theacquisitionbyaMauritiancitizenofa
househavingavaluenotexceedingMUR6
million(includingunderventeenétatfutur
d’achèvement(VEFA)duringtheperiod.01
Property Tax September2016to30June2020hasbeen
extendedtocoveranacquisitionperiodof
upto30June2022andthethresholdfor
thevalueofthepropertyhasbeenincreased
fromMUR6million(approx.USD150000)
toMUR7million(approx.USD17500).
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Guide – Mauritius Finance Act, 2020
DuringthelockdownperiodtheMRAhad
putinplacetemporaryfacilitiesforthe
electronicsubmissionoftaxreturnsand
electronicpaymentoftaxdues.Thishas
provedtobeveryeffectiveandtheMRAis
nowembracinggreaterrelianceonelectronic
systems.Aseriesofmeasuresthathavebeen
introducedtothateffectaresetoutbelow:
TheMRAmaygiveanycorrespondence,
noticeofassessment,determinationor
othernoticeordocumentelectronically.
• TheMRAmayapproveorsetupsuch
systemasitconsidersappropriatefor
thesecureelectronicserviceofnotices
anddocumentsandpaymentoftaxes.
• Everypersonwhoisrequiredtosubmita
returnorstatementwillbeallocatedan
e-taxaccount.Ataxrepresentativewill,
inadditiontohisorhere-taxaccount,
beallocatedataxrepresentativee-tax
account.Thee-taxaccountorthetax
representativee-taxaccountwillbeused
Tax Administration
tofileareturn,statementofincomeor
otherdocumenttotheMRAandmake
paymentofanytaxtotheMRA.
• Itisnowmandatorytosubmitand
effectpayment(whereapplicable)
electronicallyinrespectofthefollowing:
• quarterlyreturnunderthe
advancepaymentsystem(in
respectofcompanies);
• statementunderthecurrent
paymentsystem(inrespectof
individualsderivingrentalincome
orincomefrombusiness);
• amendedreturn;
• returninrespectofatrust
oraresidentsociété;
• returninrespectoftheestate
ofadeceasedperson.
• RegistrationforVATpurposescannow
bemadethroughtheCompaniesand
BusinessRegistrationintegratedSystem
operatedbytheRegistrarofCompanies.
• Whereoutputtaxexceedsinputtax,the
differencemustnowbepaidelectronically
totheMRAatthetimetheVATreturnis
submitted.
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Thefollowingarethekeyamendments
totheCompaniesAct(CA):
Independentdirectorsinpubliccompanies
TheCAintroducestherequirement
oftheBoardofdirectorsofapublic
companytoinclude,atalltimes,atleast
twoindependentdirectors.Independent
directorhasbeendefinedasadirectorwho
isanon-executivedirectorandwho:
• isnotanemployee;
• doesnothavematerialbusinessrelationship
withthecompanyeitherdirectlyorasa
partner,shareholder,directororsenior
employeeofanorganisationthathas
suchrelationshipwiththecompany;
• doesnotreceiveremunerationfromthe
companyexceptremunerationorany
otherbenefitgiventohimasadirector
inaccordancewithsection159;
• isnotanominateddirectorrepresenting
asubstantialshareholder;
• doesnothaveclosefamilytieswith
anyoftheadvisers,directorsor
senioremployeesofthecompany;
• doesnothavecrossdirectorshipsor
significantlinkwithotherdirectors
throughinvolvementinothercompanies
orotherorganisations;and
• hasnotservedontheBoardformore
thanninecontinuousyearsfromthe
dateofhisorherfirstelection.
Commentary
Whilsttherewaspreviouslynostatutory
requirementtohaveindependentdirectors
ontheboardofdirectorsofpubliccompanies
inMauritius,thesecondprincipleofthecode
ofcorporategovernanceissuedin2016sets
outtherequirementofallboardsofdirectors
Companies Act ofpublicinterestentities(PIE)toincludea
combinationofexecutivedirectors,independent
directorsandnon-independentnon-executive
directors.Thedefinitionofanindependent
directorintroducedintheCAfundamentally
mirrorsthecomprehensiveguidelinessetout
inthecodetodeterminewhatconstitutesan
independentdirector.Thisnewadditionto
theCAthereforecreatesalegalobligation
onpubliccompaniestohaveatleasttwo
independentdirectorsasopposedtoonlya
recommendation.Thisfollowstheintroduction
oftherequirementofatleastonewomanon
theboardofapubliccompanyintheFinance
Act2019,demonstratingtheimportanceplaced
onboardandcorporategovernancematters
bythegovernmentintheserecentyears.
Dutyofdirectors
Thelistofdutiesowedbydirectorsof
companieshasbeenextendedtoinclude
adutytoactinamannerwhichisnot
oppressive,unfairlydiscriminatory,orunfairly
prejudicialtoshareholdersofthecompany.
Thefailurebyadirectortocomplywith
hisorherfiduciarydutiessetoutinthe
CAisnowspecificallylistedasanoffence
which,onconviction,issubjecttoafinenot
exceedingMUR100000,andtoimprisonment
foratermnotexceeding12months.
Commentary
Theprovisionofastatutorydutyfordirectors
toactinamannerwhichisnotoppressive,
unfairlydiscriminatory,orunfairlyprejudicial
toshareholdersofthecompanyandthe
makingofanybreachesofdirectors’duties
asaspecificoffenceareadditionalprotection
toshareholdersinlinewithinternationalbest
practices.ShareholdersofGlobalBusiness
CompaniesandAuthorisedCompaniesthat
cannotavailoftheprejudicedshareholder
protectionundertheCAwouldnowhavea
specificclaimtotheextentthattheyareunfairly
prejudicedasaresultofanactofthedirectors.
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Guide – Mauritius Finance Act, 2020
Thefollowingarethemainamendments
totheFinancialServicesAct(FSA):
Moneylending
Moneylendingactivitieswillnowberegulated
bytheFinancialServicesCommission(FSC)
undertheFSAandanewsection14Ahasbeen
includedintheFSAwhich,interalia,provides
thatsubjecttocertainexemptionsasprovided
undertheFSA,anyperson,otherthanabank
oranon-bankdeposittakinginstitution,whose
businessisthatofmoneylendingorwho
provides,advertisesorholdshimselfoutinany
wayasprovidingthatbusiness,whetheror
nothepossessesorownspropertyormoney
derivedfromsourcesotherthanthelending
ofmoney,andwhetherornothecarrieson
thebusinessasaprincipalorasanagentis
requiredtoapplyforalicence.Onlyacompany
isentitledtoapplyforamoneylendinglicence.
Commentary
Moneylendingwaspreviouslyregulatedby
theBankofMauritius.Itwillnowfallunder
thepurviewoftheFSCwhichwillregulate
moneylending.Asatdate,theBankof
Mauritiushasnotissuedanymoneylending
licenceinMauritius.Globalplayerslooking
attransactionsinMauritiushavelongtoyed
withtheideaofdebtinvestmentsbuthave
hadtotreadinacarefullyguardeddebt
market.Whilemezzaninelendinghasbeena
goodfallback,puredebtinvestmentsinthe
globalbusinesssectorhavebeenhindered
bythedifferentialregulatoryapproachesto
domesticandoffshorelending.Intimeswhere
businessesgloballyareinsearchofcheaper
andmoreflexibledebt,andequityisproving
toovolatileaninstrument,itishopedthatthere
willbeaclearerpathforthesettingupofdebt
fundsandalternativedebtinstrumentswithin
theglobalbusinesssector,thuspositioning
Mauritiusalsoasacentrefordebtfinancing,at
parwithotherinternationalfinancialcentres.
Financial Services Introductionofleniencyforfilingsofaudited
financialstatements
Anewsection30Ahasbeenintroducedto
empowertheFSCtoextendtheprescribed
periodduringanemergencyperiodforfiling
ofitsyearlyauditedfinancialstatements.An
emergencyperiodincludesaperiodduring
whichacurfeworder,orsimilarrestrictionon
themovementofpersonsisinforceunder
anyenactmentonthegroundofpublic
order,publichealthorpublicsafetyora
periodwhereMauritiushasbeenaffected
byanaturaldisaster.TheFSCmayalso
exemptapersonfromcomplyingwiththe
obligationtoapplyfromtherequirement
tofileyearlyfinancialstatements.
Commentary
Alllicenseeshavetheobligationtofileannual
financialstatementswithinsixmonthsafter
thecloseoftheirrespectivefinancialyear
exceptwhereitisotherwiserequiredby
theFSCoranyrelevantact.Administrative
penaltiesareapplicableforlatefilingof
financialstatementsundertheFinancial
Services(AdministrativePenalties)Rules
2013.TheamendmentsbytheFinanceAct
allowtheFSCtoprovideforflexibilitytoits
licenseestocomplywiththisrequirement
inspecificcircumstancesandthereforeto
avoidsuchadministrativepenalties.Thisisan
importantchangegiventhatitconsidersthe
forcemajeureelementduringthepandemic.
Newdutyofauditor
TheFinanceActalsointroducedadutyon
anauditortoreporttotheFSCanymatter
whichgivestheauditorreasonablegrounds
tobelievethat(a)therehasbeenamaterial
adversechangeintherisksinherentinthe
businessofthelicenseewiththepotential
tojeopardisetheabilityofthelicenseeto
continueasagoingconcern,(b)thelicensee
maybeincontraventionoftheFSAorany
regulationsmadeundertheFSA,FSCRules
oranydirectionsissuedbytheFSC,(c)a
financialcrimehasbeen,isbeingorislikely
tobecommitted,(d)seriousirregularities
BOWMANS
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haveoccurred,or(e)therehasbeennon-
compliancewiththelawsofMauritius.
Commentary
Thisisanewprovisionthathasbeenintroduced
intheFSAwhichimposesanewobligation
onauditorstoinformtheregulatorwhere
theyhavereasonablegroundstobelieve
thatanyoftheeventsspecifiedintheFSA
hasoccurred.Auditorsalreadyhadthese
obligationsinrelationtoreportingissuers,
otherthancollectiveinvestmentschemes
undertheSecuritiesAct2005.Thisnew
changehasnowextendedtheobligationin
relationtoallthelicenseesoftheFSC.Itis
unclearatthisstagewhetherthisdutywillbe
risk-baseddependingonthelevelofactivity
ofthelicenseeandthelikelihoodofsystemic
risksposedbyitspotentialfailure,orifthis
dutywouldalsobeextendedtosimpleholding
structurewheretheincreasedcompliance
costswouldsurelybedisproportionate
totheobjectivesofwhistleblowing.
17
Guide – Mauritius Finance Act, 2020
Thefollowingarethemainamendments
totheInsolvencyAct(IA):
PowerofCourtto‘cramdown’
TheIAhasbeenamendedtoprovideforthe
powersoftheCourttoimposearestructuring
ofdebtinabankruptcyarrangementdespite
objectionsfromcreditorswhere(a)adeedof
companyarrangementbetweenacompany
anditscreditorsoranyclassofitscreditors
hasbeenvotedonatthewatershedmeeting;
(b)thecreditorsmeanttobeboundbythe
deedofcompanyarrangementareplaced
intwoormoreclassesofcreditorsforthe
purposeofvotingonthedeedofcompany
arrangementattherelevantmeeting;(c)at
leastoneclassofcreditorsresolvesthatthe
companyexecutesthedeedofcompany
arrangement;and(d)atleastoneclassof
creditorsdoesnotresolvethatthecompany
executesthedeedofcompanyarrangement.
TheCourtmay,ontheapplicationofan
administratoror,withleaveoftheCourt,on
theapplicationofacompanyorcreditor,
approvethedeedofcompanyarrangement
andorderthatthedeedofcompany
arrangementbebindingonthecompanyand
allclassesofcreditorsintendedtobebound
Insolvency Act bythedeedofcompanyarrangement.
SuchanordercanbemadebytheCourt
wherethecreditorsrepresentingatleast75%
invalueofallcreditorswhoareintendedtobe
boundbythedeedofcompanyarrangement
havevotedinfavourofthedeedofcompany
arrangement;andtheCourtissatisfiedthatno
provisionofthedeedofcompanyarrangement
wouldbe(a)oppressiveorunfairlyprejudicial
to,orunfairlydiscriminatoryagainst,one
ormoreofthecreditors;or(b)contraryto
theinterestsofthecompanyasawhole.
Commentary
Thischangeintroducestheconceptof
‘majorityrule’increditordecision-making
duringinsolvenciesandprovidesaclear
statementinthelawthatdespiteobjections
fromminoritycreditors,theCourtmay,subject
tocertainconditions,imposearestructuring
ofdebtandapprovethedeedofcompany
arrangementinthesituationsmentioned
above,andthescopeofapplicationofsuch
powergiventotheCourtisspecifiedinthe
amendedIA.Inadditiontotherequirement
foratleast75%ofthecreditorswhowillbe
boundbythedecisiontovotefavourablyto
thedeedofcompanyarrangement,theCourt
mustalsobesatisfiedthatnoprovisionofthe
deedofcompanyarrangementisdeemed
asbeingoppressive,unfairlyprejudicial,
unfairlydiscriminatoryorcontrarytothe
interestsofthecompanyasawhole.
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Banking Act (BA)
ThemainamendmentstotheBAareasfollows:
Introductionofdigitalbankingbusiness
andadigitalbankinglicence
• Thedefinitionof‘Bank’isamendedto
caterforthedigitalbankingbusiness
andthedefinitionof‘bankinglicence’
nowincludesadigitalbankinglicence.
• TheBAisamendedtocaterforany
bankingbusinesscarriedonexclusively
throughdigitalmeansorelectronically,
therebyprovidingforanewdefinitionof
‘digitalbankingbusiness’.Thisparticular
amendmenttotheBAisbrought,
especially,tocaterfortheintroductionof
digitalcurrencywhichtheBankofMauritius
isnowempoweredtoissueanditislikely
thatwiththeintroductionofthenewdigital
currencyframework,guidelinesfromthe
BankofMauritiuswillbeforthcoming.
• Anewsubsectiontocaterforabankwhich
hasbeengrantedabankinglicencebythe
centralbanktocarryonexclusivelydigital
bankingbusinessisnowincludedinsection
7relatingtothegrantorrefusaltogrant
bankinglicence,oftheBA.
Amendmenttotheprovisionsrelatingto
Conservatorship
• Thepowersanddutiesofaconservator
appointedbythecentralbankarewidened
inscopeinthattheconservatornowhas,
interalia,allthepowersoftheshareholders,
directorsandofficersofthefinancial
institutionconcernedandmayoperate
thefinancialinstitutioninitsownname
unlessotherwisespecifiedbythecentral
bank.Withatimelimitnowimposed
unlesstheboardofdirectorsofthecentral
bankdeterminesotherwise,afinancial
institutionmustnotbeplacedunder
Banking conservatorshipformorethan180days.
• TheprovisionsoftheBArelatingto
therehabilitationorreorganisationof
afinancialinstitutionareamendedto
nowenabletheconservatortopropose,
subjecttotheotherprovisionsofthe
BA,anotherreorganisationplantoall
depositorsandothercreditorswhowill
notreceivefullpaymentundertheplan.
Otheramendments
• Moneylendingisnolongerwithinthe
purviewoftheBankofMauritius.The
definitionof’moneylender’intheBAis
accordinglydeletedandtheprovisions
inrespectoflicensingofmoneylenders
arerepealed.Moneylendingnow
fallsunderthepurviewoftheFSC
(pleaserefertoSectionF(Financial
ServicesandReporting)above).
• TheBAisamendedtoprovidefordirectives
inadditiontoguidelinesandinstructions.
• TheBAnowmakesreferencetothe
CreditScoringServicesAgencywhichis
establishedunderthenewsection52Bof
theBankofMauritiusAct(dealtwith
furtherbelow).
Commentary
TheBAisnowfurtherstrengthenedbythe
provisionofanewframeworkfordigitalbanking
asameansofdiversifyingourfinancialservices
sector.Thisnewdefinedframeworkinrespect
totheintroductionofthedigitalbanking
servicesnowplacesMauritiusinapositionof
acompetitiveInternationalFinancialCentre.
Thebroadeninginthescopeofpowersand
dutiesofaconservatorisamuch-welcomed
changeasameansofanenhancedwaytooffer
moreprotectionoftheassetsofafinancial
institutionforthebenefitofitsdepositorsand
creditors.Withthewiderscopeofpowers
oftheconservator,itislikelythatafinancial
institutionwillbeallowedtotradeandcome
outofabadfinancialpositionwithoutany
disruptioncausedtothebusinessthatwould
otherwisejeopardisetheinterestofthe
19
Guide – Mauritius Finance Act, 2020
depositorsandcreditors.Lastly,itisappositeto
notethatmoneylendingisnolongerregulated
bytheBankofMauritiusandnowfallsunder
thepurviewoftheFSCaselaboratedinSection
F(FinancialServicesandReporting)above.
Bank of Mauritius Act (BoM Act)
Thefollowingchangeshavebeen
madetotheBoMAct:
Introductionofdigitalcurrency
Withtheintroductionofthedigitalbanking
businessandadigitalbankinglicenceunder
theBA,digitalcurrencyisnowintroducedin
theBoMActandtheBankofMauritius(BoM)
isempoweredtoissuedigitalcurrency.
GreenandBlueBonds
TheBoMActisamendedtocaterfortheability
oftheBoMtoraiseloansbyitselforthroughits
subsidiary,oractingasagentofGovernment,by
theissueofsecuritiesforinvestmentinprojects
orcompaniespromotingthesustainable
economicdevelopmentofMauritius,including
theblueeconomyandgreeneconomy.This
amendmentisinlinewiththeproposalmade
duringthisyear’sBudgetSpeechregarding
theintroductionofnewproductsinlinewith
therecommendationsofthe10-yearblueprint
todiversifyourfinancialservicessector.
EstablishmentofCreditScoring
ServicesAgency
TheBoMmaynowbyitself,throughasubsidiary
oranyotherlegalentity,establishacredit
scoringservicesagencyforthepurposeof
providingcreditscoresonanapplicantfor
creditonsuchtermsandconditionsasit
maydetermine.‘Creditscore’isdefinedas
anassessmentofthecreditworthinessofan
applicantforcredit.TheBoMmaymakeuseof
informationavailableintheCreditInformation
Bureauandmayrequestanypersontoprovide
itwithsuchinformationasitmayconsider
necessaryfortheestablishmentoftheCredit
ScoringServicesAgency.Suchpersonand
theCreditInformationBureauarerequired,
notwithstandinganyconfidentialityprovisions
undertheBoMoranyotherenactment,to
extendassistanceto,andcomplywiththe
requestof,theCreditScoringServicesAgency.
Commentary
Theintroductionofthecentralbankdigital
currencyandtheGreenandBlueBond
frameworksbytheBoM,inlinewiththe
recommendationsofthe10-yearblueprint,
furtherenhancethecompetitivenessofthe
financialservicessectorinMauritius.Whilethe
digitalcurrencyframeworkisparticularlynew,
weareyettoseeitsapplicationinpractice
andverymuchlookforwardtoanydirectives,
instructionsorguidelinesissuedinrespectof
samebytheBoM.Further,theestablishment
ofacreditscoringservicesagencyin
additiontoacreditinformationbureauand
acentralKYCregistryisawelcomedchange
inthatitwillassisttheBoMinmonitoring
informationreceivedonpotentialborrowers.
BOWMANS
20
Workers’ Rights Act (WRA)
Themainamendmentstothe
WRAareasfollows:
Introductionofnewqualificationsinthe
conversionoffull-timetopart-timeregime
Whereafull-timeworkerentersintoan
agreementtoworkparttimeduringthe
periodstarting01June2020andendingon
31December2020(orsuchotherperiodas
maybeprescribed),theagreementshall:
• beinwritingandforaperiodnot
exceedingthreemonths;and
• provideanoptiontotheworker
toreverttofulltimework:
• attheexpiryoftheperiod
ofthreemonths;or
• beforetheexpiryoftheperiod
ofthreemonthswiththe
consentofhisemployer.
Anemployerwillnotrequireafull-timeworker
toenterintoanagreementtoperformpart-time
work,exceptwheretheagreementisinwriting
andforaspecifiedperiodoftimeandprovides
anoptiontotheworkertorevertbacktofull-
timeworkattheexpiryofthespecifiedperiod
andwiththeapprovalofthesupervisingofficer.
TheFinanceActhasclarifiedthatapart-
timeworkerwhohasbeenrequiredtoshift
fromafull-timeagreement,andwhose
employmenthasbeenterminated,maybe
orderedtobepaidseveranceallowancewhere
theCourtfindssuchterminationunjustified.
Forthepurposeofcalculatingtheseverance
allowance,amonth’sremunerationwouldbe:
• theremunerationdrawnbytheworker
forthelastcompletemonthofhisorher
employmentonafull-timebasis;or
• anamountcomputedinthemannerasis
bestcalculatedtogivetheratepermonth
Employment atwhichtheworkerwasremunerated
overaperiodof12monthsbeforethe
terminationofhisorheragreement,
includingpaymentforextrawork,
productivitybonus,attendancebonus,
commissioninreturnforservicesandany
otherregularpayment,whicheverishigher.
PortableRetirementGratuityFund
ContributionsmadetothePortable
RetirementGratuityFundarenow
deductiblefromanyamountpayable
underthecompromiseagreement.
Workduringadverseweatherconditions
Anemployershallnownotrequireaworker
toreporttoworkortocontinuetowork
whereduringaperiodofextremeweather
conditions,anorderisissuedbytheNational
CrisisCommitteerequiringanypersonto
remainindoors,orastateofdisasteris
declaredandanydirectionforthepurpose
ofassistingandprotectingthepublicis
issuedundersection37oftheNational
DisasterRiskReductionandManagement
Act.Theemployershallpaytotheworker:
• afullday’sremunerationwhere:
• noworkcanbeperformedowing
totheweatherconditions;or
• theworkerresumeswork
fortwohoursormore;
• ahalfday’sremunerationwhere
• workhasbeenstoppedbefore
theworkerhascompleted
twohoursofwork;or
• theworkerresumesworkfor
notmorethantwohours.
Specialallowance
TheMRAmaypaysuchspecialallowance
asmaybeprescribedtosuchcategory
ofworkersasmaybeprescribed.
Endofyearbonus
TheendofyearbonussectionintheWRAhas
beenqualifiedtoapplyonlytothoseworkers
21
Guide - Environmental Law in South Africa
whodrawamonthlybasicwageorsalaryofnot
morethanMUR100000(approx.USD2500).
Terminationofemployment
Furtherrestrictionshavebeenplacedon
thereductionofworkforceandclosureof
enterprisessection.Noemployercanreduce
thenumberofworkersinhisemployment,
duringsuchperiodasmaybeprescribed,
except(i)anemployerwhichprovidesservices
inspecificsectors(airtrafficcontrol,civil
aviationandairport,customs,electricity,
health,hotelservices,hospital,port,radio
andtelevision,refusedisposal,telephone,
transportofpassengersandgoods,andwater
supply)or(ii)anemployerthathasapplied
foranyofthefinancialassistanceschemes
setupbytheDevelopmentBankofMauritius
Ltd,MauritiusInvestmentCorporationLtd,
StatedInvestmentCorporationLimited,for
thepurposeofprovidingfinancialsupport
toanenterpriseadverselyaffectedbythe
consequencesoftheCOVID-19virusandhis
applicationhasnotbeenapproved.Wherethere
isabreachofthisprovision,theRedundancy
Boardmayordertheemployertoreinstate
theemployeeinhisorherformeremployment
withpaymentofremunerationfromthedate
oftheterminationofhisorheremployment
tothedateofhisorherreinstatementorpay
himorhertheequivalentofthreemonth’s
remunerationforevery12monthsofcontinuous
employmentasseveranceallowance.
Additionalprovisionsaremadefortransition
unemploymentbenefitsothatwhere,
followingtheexpiryoftheCOVID-19period,
theemploymentofaworkeristerminatedfor
anyreasonandtheworkerreckonsatleast
30days’andlessthan180days’continuous
employmentwiththesameemployeras
atthedateoftheterminationofhisorher
employment,theworkershallbeentitledto
thepaymentofatransitionunemployment
benefitofMUR5100(approx.USD128)per
monthfortheperiodstartingon01July2020
andending31December2020.Thissection
comestofixtheamountpayabletosuch
aworkerforthesesixmonths,otherwise
itwouldhavebeen90%ofthebasicwage
forthefirstthreemonthsand60%asfrom
thefourthmonthtothesixthmonth.
Commentary
Itcanbeseen,throughtheamendments,
thattheintentionoftheGovernmentisto
provideadditionalsecuritytotheworkforce,
particularlyfollowingtheCOVID-19crisis.
Itisawelcomeamendmenttotheexisting
lawsthatintheeventofextremeweather
conditions,employeesarenolongerrequired
toreporttowork.Now,safetyofemployees
willnotbecompromisedandwithincreasing
useofremoteworking(whereavailable),the
negativeimpactonbusinesseswillalsolessen.
Ofnote,istheamendmenttotheendofyear
bonusprovisionundertheWRA.Therearetwo
piecesoflawwhichprovidesforendofyear
bonus–theWRAandtheEndofYearGratuity
Act.TheWRAprovidesforthepaymentof
anendofyearbonusequivalentto1/12ofthe
earningsofanemployeefortheyearpayable
inDecemberoratthetimeofterminationof
hisorheremploymentduringtheyear.The
EndofYearGratuityActprovidesforthe
paymentofanendofyearbonusinthemonth
ofDecemberequivalentto1/12ofthebasic
wageorsalaryofanemployeeprovidedthe
employeeisinemploymenton31December
anddoesnotprovideforthepaymentofthe
bonusonterminationofemploymentduring
theyear.Theamendmentshaveclarifiedthat
theendofyearbonuswillbeaspertheEnd
ofYearGratuityActforemployeesearning
abasicsalaryofmorethanMUR100,000
andaspertheWRAforemployeesearning
abasicsalarylessthanMUR100,000.
National Pensions Act (NPA)
Replacementoftheexistingsystemof
NationalPensionwiththeContribution
SocialeGéneralisée(CSG)with
effectfrom01September2020
BOWMANS
22
UndertheCSG,everyemployee(asmay
beprescribed)andeveryemployerofsuch
employeewillberequiredtopaytheCSGat
sucharateandonsuchremunerationasmay
beprescribed.Self-employedpeoplewouldalso
berequiredtocontributetotheCSGatsuch
rateasmaybeprescribed.TheCSGshallbe
payableinrespectofthemonthofSeptember
2020andforeverysubsequentmonth.
Anypersonwhobecameaninsuredperson
undertheexistingpensionsystempriorto
01September2020willremainaninsured
persononorafter01September2020untilhe
orsheceasestobeaninsuredperson.However,
nocontributionwillbepayablebysuchaperson
orhisorheremployerinrespectofanyperiod
followingtheendofthemonthofAugust2020.
EverybenefitpayableundertheNPA(other
thanthebenefitundertheCSGorsuchother
benefitasmaybeprescribed)willbecalculated
inaccordancewiththeNPAandontheamount
ofthecontributionpaidbytheinsuredperson.
Commentary
Thecontributionsmadebyeveryemployer
andemployeetotheNationalPensionsFund
havenowbeenreplacedbytheCSG.Asfrom
01September2020,everyemployer,employee
andnowself-employedpeoplewillberequired
topaytheCSGtotherevenueauthoritiesat
suchratestobeprescribed.WhiletheFinance
Actdoesnotspecifytheamountthatneeds
tobecontributedtotheCSG,theMinisterof
FinancehasinhisBudgetSpeechproposed
aprogressivesystem,wherebyinrespect
ofemployeesearninguptoMUR50000,a
contributionattherateof1.5%mustbemade
bytheemployeesand3%bytheiremployers
andinrespectofemployeesearningmore
thanMUR50000,acontributionof3%must
bemadebytheemployeesand6%bytheir
employers.Shouldtheseratesbemaintained
(andnotcappedasusedtobethecasewith
theexistingnationalpensionsystem),this
willbeaconsiderablestrainonbusinessesin
thesedifficulttimes.Further,acontributionof
MUR150(approx.USD3.75)totheCSGhas
beenproposedforself-employedpeople.
National Savings Fund Act (NSFA)
TheNSFAhasbeenamendedtoincludea
non-citizeninthedefinitionofemployee,
exceptwherethe(a)non-citizenisemployed
byanexportmanufacturingenterprisewho
hasresidedinMauritiusforacontinuous
periodoflessthantwoyears;and(b)the
non-citizenholdsaworkpermitandisan
employeeofaforeigncontractorengaged
intheimplementationofaprojectwhich
isfundeduptonotlessthan50%ofthe
estimatedprojectvalue,fromgrantor
concessionalfinancing,astheMinistryof
Financemayapprove,fromaforeignState.
Non-Citizens (Employment Restriction) Act
Thescopefornon-citizenstobeemployed
withoutapermithasbeenextendedto
aholderofaresidencepermitunderthe
ImmigrationActandtoamemberofthe
MauritianDiasporaundertheMauritian
DiasporaSchemeprescribedunderthe
EconomicDevelopmentBoardAct2017.
Private Pension Schemes Act
Afundhasbeenintroducedforabandoned
fundswhereby,intheeventthatabeneficiary
hasnotclaimedhisorherbenefitsundera
privatepensionschemeforsevenyearsormore
andafteranoticehasremainedunanswered,
theentitlementofthebeneficiaryshallbe
deemedtohavebeenabandonedandthetotal
amountoffundswouldbetransferredtoa
fundestablishedforsuchabandonedfunds.
23
Guide – Mauritius Finance Act, 2020
Anumberofchangeswhichwerebrought
bytheCOVID-19(MiscellaneousProvisions)
Act(theCOVIDAct)havebeenfurther
amendedorrepealedbytheFinance
(MiscellaneousProvisions)Act.Someofthe
COVID-19measuresthathaveceasedto
applyaresetoutbelow.TheFinanceAct
hasalsobroughtsomerelieftocompanies
operatinginthetourismsectorthathavebeen
mostlyimpactedbyCOVID-19byexempting
themfrompaymentoffeesforcertificates,
licencesorpermitsissuedundertheTourism
AuthorityActforaperiodoftwoyears.
Insolvency Act
StatutoryDemand
• Thetimeperiodforanapplicationto
setasideastatutorydemandandto
beservedonacreditorwasextended
from14to28daysbytheCOVIDAct
buttheIAhasbeenamendedagainto
provideforatimeperiodof14days.
• Thetimeperiodforadebtorcompanyto
paythedebt,enterintoacompromise
orcompoundwiththecreditororgive
achargeoveritspropertywhichwas
increasedtotwomonthsbytheCOVID
Acthasalsobeenreducedtoonemonth.
ReceiversandManagers
UndertheIAasamendedbytheCOVID
Act,anyappointmentofareceiverby
achargeethroughaninstrumentof
chargeoranyappointmentofareceiver
COVID-19 Measures
orreceiverandmanagerbyachargee
underaninstrumentduringtheCOVID-19
periodwasofnoeffectandwasvoid.This
provisionhasnowbeenrepealed.
Companies Act
TheRegistrarofCompaniesisnolonger
empoweredtoissuepracticedirections,
guidelinesorsuchotherinstructionsduring
theCOVID-19periodandforsuchfurther
periodastheRegistrarmaydetermineforthe
goodadministrationoftheCompaniesAct.
Limited Liability partnerships Act
and Limited Partnerships Act
TheRegistrarofCompaniesisnolonger
empoweredtoissuepracticedirections,
guidelinesorsuchotherinstructions
duringtheCOVID-19periodandfor
suchfurtherperiodastheRegistrarmay
determineforthegoodadministration
oftheLimitedLiabilitypartnershipsAct
and/ortheLimitedPartnershipsAct.
Tourism Authority Act – Exemption
of payment of renewal fee for expiry
of certificate, licence or permit
Holdersoftouristaccommodationcertificate,
touristexpertiselicence,pleasurecraftlicence
forcommercialpurposesorcanvasserpermit
arenowexemptfrompaymentofanyrenewal
feeforaperiodoftwoyearsontheexpiryof
hisorhercertificate,licenceorpermit,asthe
casemaybe.Ifanyofthemhavepaidsuchfees
between01June2020and05June2020,they
shallberefunded.Licensesexpiredanytime
between20March2020to30June2020shall
bedeemednottohaveexpiredandshallremain
validuntiltheirrenewaloraperiodoftwoyears
fromtheirdateofexpiry,whicheverisearlier.
BOWMANS
24
TheFinanceActhasbroughtseveral
changestoeasethebusinessenvironment.
Themainchangesaresetoutbelow:
CompaniesandBusinessRegistration
IntegratedSystem(CBRIS)
TheCAnowallowstheCBRIS,theelectronic
systemoperatedbytheRegistrar,tobe
operationalfortheregistrationasaregistered
personundertheValueAddedTaxAct.
Commentary
VATregistrationshavelongbeenintheform
ofmanualsubmissionsofregistrationformsto
thepostaladdressoftheMauritiusRevenue
Authority.Allowingonlineelectronicsubmission
onlinethroughtheCBRISdemonstratesthe
gradualcomputerisationoftheregistrywhich
willsignificantlysimplifyVATregistration.
EstablishmentofBusiness
ObstacleAlertMechanism
TheEconomicDevelopmentBoardAct
hasbeenamendedtoprovideforthe
establishmentofaBusinessObstacleAlert
Mechanism(BOAM)forthepurposeofbusiness
facilitation.TheBOAMwillenableenterprises
tologinanybottlenecksinrelationtodelays
inthedeterminationoflicences,permits,
authorisationsorotherclearances,enquire
aboutanyissueandmakerecommendations
topublicsectoragencies,andreportand
publishanyremedialactiontaken.
Business Facilitation
Restorationofacompanyin
thecompany’sregister
TheActabolishestherequirementbythe
applicanttopaypublicationcostspriorto
restorationofacompanytotheregister,and
alsoamendstherequirementtogivepublic
noticetotwodailynewspapershavingwide
circulationinMauritius,toonlygivingnotice
intheGazetteandbyanyelectronicmeans.
25
Guide – Mauritius Finance Act, 2020
Changes as per Finance Act Commentary
Non-citizenholdingimmovablepropertyundertheIntegratedResortScheme,InvestHotelScheme,propertyDevelopmentSchemeorSmartCitySchemewhosevalueisnotlessthanUSD375000willhavethestatusofresident.
ThethresholdforthevalueofthepropertyhasbeenreducedfromUSD500000.
Parentsof,non-citizensstatedabove,holdersofavalidresidenceoroccupationpermitandhavinggrantedthestatusofpermanentresidentandnon-citizenscomingtoservetheGovernmentundertheServicetoMauritiusProgrammeforaperiodnotexceedingthreeyears,willhavethestatusofresident.Thisisanewadditiontothelaws.
PreviouslyonlyspousesanddependentsofthesespecifiedpersonsweregrantedthestatusofresidentinMauritius.
ApersonwhoinvestsatleastUSD375000oranequivalentamountinthespecifiedactivitiesoftheScheduleoftheIAwhichincludeagro-basedindustry,education,initialpublicofferingwillnowbeabletoapplyforthestatusofpermanentresident.
ThethresholdfortheminimuminvestmenthasbeenreducedfromUSD500000.
Anyinvestororself-employednon-citizenwhoisaholderofanoccupationpermitoranyretirednon-citizenwhoisaholderofaresidencepermitmayapplyforthestatusofpermanentresidentwithinthe10-yearoccupationorresidentpermitperiod.
Previouslythetimelineformakingsuchapplicationwasattheexpiryofthreeyearsoftheoccupationorresidencepermit.
Thevalidityofapermanentresidencepermithasbeenextendedto20years.
Thevaliditywasforperiodof10yearspriortothischange.
Theholderofanoccupationpermitundercategoryprofessionalmayholdsharesinabusinesswhereheisemployedprovidedthatheisnotamajorityshareholder.
Previously,holdersofsuchcategoryofoccupationpermitwerenotallowedtoholdsharesinthecompanieswheretheywereemployed.
ImmigrationAct
Immigration
EconomicDevelopmentBoardAct
TheFinanceActhasalsoamendedthe
EconomicDevelopmentBoardAct(EDBA)
andoneofthekeychangesistherepealingof
theFirstScheduleoftheEDBAinitsentirety
andreplacingitwithanewschedulewhich
providesforthenewcriteriaforregistration
withtheEconomicDevelopmentBoard
andforeligibilityofpermanentresidence
permit.ThemainchangestotheFirst
ScheduleoftheEDBAareasfollows:
• Inrelationtooccupationpermitunder
categoryinvestor,thethresholdfor
initialinvestmenthasbeenreduced
fromUSD100000toUSD50000.
• • Inordertobeeligibleforan
occupationpermit,theminimum
monthlybasissalaryforprofessionals
BOWMANS
26
inpharmaceuticalmanufacturingand
foodprocessingsectorsisMUR30000
(reducedfromMUR60000).Forrenewal
ofanoccupationpermitofaself-employed
person,hisorherminimumbusinessincome
mustbeMUR800000peryearasfrom
thethirdyearofregistration.Thecriteriaof
cumulativebusinessincomeofatleastMUR
Eligibility criteria prior to Finance Act Eligibility criteria after Finance Act
For any investor:1. Holderofanoccupationpermitasinvestor;and2. AnaggregateturnoverofatleastMUR45million
foranyconsecutiveperiodofthreeyears.
For an investor with a minimum investment of
USD 500 000:InvestmentofatleastUSD500000inaqualifyingbusinessactivity.
For any investor:1. Holderofanoccupationpermitasinvestorfor
atleastthreeyears;and2. Aminimumannualgrossincomeofatleast
MUR15millionforthreeyearsprecedingapplicationoritsaggregate.
For an investor with a minimum investment
of USD 375 000:MinimuminvestmentofUSD375000inaqualifyingbusinessactivity.
2.4millionduringthethreeyearspreceding
theapplicationforoccupationpermitand
withabusinessincomeofatleastMUR
600000peryearisnolongerapplicable.
• Inrelationtopermanentresidentpermit,
thefollowingchangeshavebeenmade
tothecriteriaofeligibilityforinvestors:
• TheFirstSchedulealsonowprovides
foranewpartIIIwhichsetsoutthe
followingcriteriaforeligibilityfor
permanentresidencepermitfordifferent
categoriesofpersonswhohavebeen
aholderofanoccupationpermitor
residencepermitforatleastthreeyears
immediatelybefore1September2020:
Investor CumulativeturnoverofatleastMUR12millionduringthethreeyearsprecedingtheapplication.
Self-employed CumulativebusinessincomeofatleastMUR2.4millionduringthethreeyearsprecedingtheapplication.
Professionalintheinformationandcommunicationtechnologies(ICT)sectorandbusinessprocessoutsourcing(BPO)sector
MonthlybasicsalaryofatleastMUR30000duringthethreeyearsprecedingtheapplication.
Professionalinanyothersector MonthlybasicsalaryofatleastMUR60000duringthethreeyearsprecedingtheapplication.
Retirednon-citizen MonthlytransferofatleastUSD1500oritsequivalentinfreelyconvertibleforeigncurrency,duringtheperiodofthreeyearsorcumulativetransferofatleastUSD54000oritsequivalentinfreelyconvertibleforeigncurrency,duringtheperiodofthreeyears.
27
Guide – Mauritius Finance Act, 2020
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