By Intercontinental Trust Ltd (ITL)
Themed “Tomorrow is ours”, Mauritius budget 2024-25 was prepared and announced by the Finance Minister Dr. the Honourable Renganaden Padayachy during the first week of June, as the fifth and final under the government’s current mandate.
In particular, we at ITL feel that this budget shows clear focus on business facilitation measures, building on the financial services sector, infusing fresh talent into the economy, as well as promising a digital transformation that sees Mauritius well entrenched as a Fintech hub for the region.
The measures proposed are reinforcing our commitment towards growth & investment.
Improving the ease of doing business
The ease of doing business remains a priority of this budget as much as others before it, with key measures such as reducing the processing time of application for permits and licences, introducing and improving upon e-applications, and the Economic Development Board (EDB) working with various authorities to double the number of licences delivered electronically within the next 3 years. A pivotal measure is the Financial Services Commission (FSC) streamlining its licenses and permits to ensure they are granted in 10 working days, in those cases where all requirements are met. With FinTech firms under the purview of the FSC, this business facilitation measure ties in closely with the government’s promise to position Mauritius as a FinTech hub for the region.
Promising a digital transformation
This budget proposes a slew of measures to accelerate the digital transformation of the island economy. At the outset, the budget heralds the first ever blueprint for the development of Mauritius as a regional Fintech Hub, a document to be devised with the assistance of the United Nations Economic Commission for Africa. Taking digitalisation to the grassroots, SMEs are encouraged to adopt new technologies and equipment with a refund of 25% on offer under the ‘Small Business Digital Champion Scheme’. Moreover, MAUCAS fees has been waived for digital payments by the Bank of Mauritius, indicating a firm thrust on online transactions. In addition, Payment Intermediary Services Licence Holders will now benefit from the Partial Exemption Regime as well. With many such licensees hailing from the FinTech arena, the focus of this measure is clear. Finally, Artificial Intelligence (AI) is the cynosure of all eyes with a national ‘A.I-for-ALL’ campaign to apply AI tools in schools, universities, businesses and, for the public at large.
Building on the financial services sector
Like others before it, this budget seeks to reinforce the favourable positioning of Mauritius as an International Financial Centre (IFC) of note. The sector that contributed 13.7% of the GDP in 2023 – with a growth of 4.4% over 2022 – stands poised to benefit from the review of the blueprint for the financial services to gear it to face new challenges and exploit upcoming opportunities. With the last such review conducted in 2018, the time is ripe for another blueprint to assess the value proposition of the sector. Moreover, the budget proposes that the funds regime be reviewed to enhance the attractiveness of the jurisdiction. Finally, the budget proposals to engage in discussions with India for the development of our financial sector and explore the possible signature of a Strategic Partnership Agreement (SPA) with India and African countries help set the tone for the IFC of the future.
Infusing fresh talent into the economy
Apart from the introduction of a 10-year expert Occupation Permit (OP) to attract foreign talents in the wealth management, family office, virtual assets and virtual tokens spaces, the threshold for OPs for professionals has been lowered from MUR 30,000 to MUR 22,500. While the first measure caters for the financial services sector’s rising demand for senior professionals, the second straddles the opposite end of the spectrum. Moreover, a transition period has been built in, with professionals possessing at least 10 years’ experience being allowed to benefit from a three-month, temporary OP so they can work pending final OP approval. Significantly, the maximum time taken to deliver or renew a work permit (WP) is capped at 3 weeks. Finally, the silver economy is being acknowledged with non-citizens holding a Retired Residence Permit allowed to engage in work without occupation or work permits.
Showcasing Mauritius’ future-centric IFC on a global stage
Ultimately, even while the budget has many social measures for the domestic population, as expected in an election year, it creates a stir with its concerted focus on digital transformation and fresh talent that shall define the IFC of the future.
Against this context, it is worth noting that the latest Article IV consultations by the International Monetary Fund (IMF) in April commented on several economic indicators such as real GDP growth, inflation and current account deficit moving in the right direction and showing how the government’s efforts to restore the economy to pre-pandemic levels are paying off. To illustrate, economic output exceeded pre-COVID levels with real GDP growing an estimated 7% in 2023, even as inflation declined on the back of lower international commodity prices, averaging 7% in 2023. Moreover, the rise in tourism earnings saw the external current account deficit narrow sharply in 2023 to 4.5% of the GDP.
Specifically for the IFC, the EDB notes that the jurisdiction is home to over 450 PE funds that are investing in the African continent. And, it expects that, by next year, over USD 80 billion (bn) investments directed towards Africa will be structured in Mauritius – twice of the nearly USD 40 bn of Africa-directed investments as of June 2021. Moreover, geographic diversification of investment flows among African countries is another positive pattern that is emerging. Data from the FSC’ External Sector Statistics and National Accounts (ESSNAC) Survey shows investment diversification beyond the traditional destination of South Africa to embrace other, emerging economies from Western and Eastern Africa.
Here, the Budget’s efforts to reinforce economic growth by introducing a slew of business facilitation measures and building on digitalisation efforts at the grass-roots level; conducting a fresh review of the funds regime besides working on a new blueprint for the financial services sector; as well as exploring SPAs with African countries while continuing to engage in discussions with India; cannot but add to the growth narrative of Mauritius, ensuring that tomorrow is, indeed, ours for the taking.
How ITL can help you
Intercontinental Trust has been around since 1999 and we are a full-fledged corporate service provider. We help with the following:
– Setting up and administering structures for our clients;
– Capital raising as per the fund’s mandate;
– Ensuring structures remain compliant;
– Relocating our clients to Mauritius;
– Setting up infrastructure in Mauritius, from office space to IT solutions; and
– Dealing with all operational aspects of clients’ companies or structures.
Over the years, we’ve built a multidisciplinary team to ensure that we can advise and assist clients in key areas such as corporate and fund services, private wealth and family offices, corporate finance; accounting, payroll, and HR; taxation; corporate finance and advisory services; sustainability consulting; compliance and regulation; and investor communications. So, if you are an investor eyeing Mauritius, please feel free to have a chat with us and see how we can help you with your journey in our vibrant island economy!
