Top 10 challenges of doing business in Mauritius

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Mauritius is one of the most developed countries in Africa thanks to its free market policies and attractive tax regime, but doing business can be challenging without having local help on board.

With one of the highest GDPs in Africa, Mauritius is an economic stronghold nestled within a burgeoning continent. Built on liberal economic principles, the country is renowned as a favourable investment destination on the world business scene, ranking in first place across most indices in Africa, such as the Mo Ibrahim Index of African Governance and The Wall Street Journal & The Heritage Foundation Index of Economic Freedom.

Manufacturing is the dominant sector in Mauritius, and with a large, young and well-educated workforce, companies find the island economy to be an ideal base for expansion. Successive governments have improved the attractiveness of Mauritius as an investment destination, and it is now viewed globally as a robust, diversified and innovation-driven economy which is conducive to business growth.

But despite the many appeals of expanding or setting up in Mauritius, the complex tax, legal and regulatory environment can be difficult to navigate without the help of local personnel.

Starting a Business
Newly-formed companies are required to register and incorporate the business before searching for a company name online. Once this procedure has been completed a licence fee and registration with the Social Security Office is also required.

Dealing with Construction Permits
Because of environmental considerations, applying for construction permits can be a long-winded process. There are several government authorities which must be consulted, most of which will be required to carry out inspections before any work can begin. Once all of the relevant departments have been contacted, an occupancy permit will be issued by the Ministry of Local Government.

Getting Electricity
Electrical connections are carried out by the Central Electricity Board (CEB), which conducts external and visual internal inspections as well as routine inspections of the civil works and meter installation. The CEB doesn’t carry out the civil work, which should be done by an electrical contractor.

Registering Property
A notary is required when registering property and a land surveyor is also needed to prepare new plans of the building. Once the sale is completed, a signed deed for the registration and transcription can be deposited, finalising property registration.

Getting Credit and Protecting Investors
Although there is no private bureau coverage, Mauritius ranks well on all other indices tracked by the World Bank and International Finance Corporation (IFC) for ease of getting credit. It also performs well across the board in terms of investor protection.

Paying Taxes
Tax rates are very competitive in Mauritius, although they can be rather burdensome. There are seven payments to be made each year which take an average of 161 company hours to file. Employer paid contributions to the National Pension Fund (NPF) is among the most time consuming aspects, as well as corporate income tax - flat rate of 15% - and VAT, which is charged at the same level.

Trading Across Borders
As an island economy, international trade is a crucial component of business procedure.

The cost of exporting and importing goods is very cheap, although it can take some time for goods to move across borders.

Enforcing Contracts
It takes over two years to enforce contracts and requires navigating 36 procedures. Filing and service can take almost a month to complete, before the lengthy judicial process can begin.

Resolving Insolvency
Resolving insolvency is a similarly drawn-out process, taking 1.7 years to complete. The recovery rate is also quite low, although it is higher than other economies in Sub-Saharan Africa.

Mauritians prefer formal business relations and are more concerned about the details than becoming friends with partners. Business cards, brochures and price lists should be used, and be sure to be punctual in meetings. There are often an array of specialised positions and departments within the business and the wider economy, so use lunches and dinners to network.

TMF Group
We have the local knowledge to help you navigate these minefields. Whether you want to set up in Mauritius or just want to streamline your Mauritian operations, talk to us.