Mauritius - Foreign investment

The government offers a variety of investment incentives, including, for industries in the Export Processing Zone, a corporate tax exemption of at least 10 years; an exemption from import duties on capital goods and most raw materials; free repatriation of profits, dividends, and invested capital; and a waiver of income taxes on dividends for 10 years. All foreign investment must obtain approval from the prime minister's office, except in the offshore business center and the stock exchange. Businesses in Freeport receive exemption from company tax and tax on dividends, preferential rates for storage, halved port handling charges, and exemption from import duty and sales tax on finished goods and machinery. Foremost among foreign investors are those from Hong Kong, followed by French, South African, German, and Indian interests.

Foreign ownership of services such as accounting, law, medicine, computer services, international marketing, and management consulting was limited to 30% in 1997. Ownership of investments serving the domestic market was limited to 49%. In December 2000, the Investment Promotion Act was passed, designed to streamline the investment process.

Total foreign direct investment (FDI) was $33 million in 1996 (although because foreign investors have not been registering with the Central Bank since the abolition of exchange controls in 1994, it is generally cautioned that official statistics underestimate the amount of foreign investment in the country. Not included is the increasingly important offshore financial sector.). In 1997, FDI inflow rose to $56 million, mainly due to investments from South Africa in the banking sector. FDI inflow fell to $12.7 million in 1998, but increased to $55 million in 1999, most investments coming from South Africa. In 2000, FDI inflow reached almost $260 million, mostly due to France Telecom's purchase of a 40% share of Mauritius Telecom as part of their strategic alliance. Most investments in Mauritius' Export Processing Zone (EPZ) have been in low-skilled manufacturing enterprises in textiles, garments, toys, and leather goods.