MAURITIUS Law and Practice Contributed by: Gilles Athaw, Jason Barbe, Deeviya Rughooputh and Sushika Ramlugun, Bowmans
not apply to companies holding a Global Business Licence, entities that are exempt from income tax or enjoy tax holidays, and income that is itself exempt from income tax. Additionally, banks will be required to make a further contribution of 2.5% on charge- able income derived solely from domestic operations, excluding income from dealings with non-residents and Global Business Companies. VAT is applicable at a flat rate of 15% to VAT-registered entities on all goods and services supplied by them in Mauritius, subject to certain supplies being exempted under the Income Tax Act 1995 and the various income tax regu- lations. The Finance Act 2025 ensures that VAT will be extended to digital and electronic services supplied by non-residents to consumers in Mauritius, as from 1 January 2026. Registration duty is payable on the registration of a document, either based on a proportional duty or as a fixed amount depending on the nature of the transac- tion witnessed by the document. A Mauritian law-governed fixed and/or floating charge, mortgage and a bordereau pursuant to an assignment agreement are required to be registered (and inscribed for fixed and/or floating charges and mortgages), while registration of finance documents and security documents other than those aforementioned are at the option of the lender. 4.3 Foreign Lenders or Non-Money Centre Bank Lenders Some of the tax concerns will involve the following: • foreign exchange risks; and • permanent establishment. Withholding tax could be mitigated by optimising the use of existing tax treaties. Transfer pricing risks could be mitigated by looking at the rates applied in comparable transactions or using the arm’s length principle. Foreign exchange risks could be mitigated by making use of currency hedging instruments or ensuring that • withholding tax; • transfer pricing;
the loan as well as the principal and interest repay- ments are made in the lender’s currency. Permanent establishment risk could be mitigated by ensuring that the lender’s activities in Mauritius do not create a permanent establishment. 5. Guarantees and Security 5.1 Assets and Forms of Security The assets available as collateral to lenders in Mau- ritius consist of: • shares; • land/buildings (immovable property); • contractual rights and receivables; • bank accounts; • intellectual property and other intangible and tangi- ble rights; • equipment/material, stocks and outillage (tools of trade); • future assets; and • business undertakings. The common forms of security granted are as follows. • Security over shares: (a) a commercial pledge when the shares of a company that holds a licence issued by the Financial Services Commission are pledged in favour of a financial institution; (b) a civil share pledge when the pledged shares relate to a domestic company; and (c) a fixed and/or floating charge can also be granted as security over the shares. • Security over land or building (immovable prop- erty): (a) a mortgage under the Mauritian Civil Code; and (b) a fixed and/or floating charge. • Security over contractual rights and/or receivables: (a) an assignment of contractual rights and/or receivables by way of security; and (b) a pledge under the Mauritian Commercial Code. • Security over bank accounts: (a) pledge under the Mauritian Commercial Code; and
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