Mauritius payroll and tax overview.

Foreign Direct Investment in Mauritius

Referred to officially as the Republic of Mauritius, Mauritius is an island nation in the Indian Ocean and is located around 2,000 kilometres off the southeast coast of Africa, strategically placed at the crossroads of Africa and Asia. Known for its picturesque beaches, Mauritius is also an attractive location for investors. With a dynamic finance sector, modern infrastructure and political and social stability, Mauritius has a strong and growing reputation as being a reliable nation to invest in.

Mauritius has enjoyed political stability since 1968 when it became an independent nation. Elected every five years, the government and its successive powers have always demonstrated a commitment to market economy that champions foreign investment and entrepreneurship.

In terms of taxation, Mauritius is ranked as having one of the lowest tax rates in the world, making it one of the key reasons to invest. The corporate income tax rate is just 15% and this also applies to the dividends from companies outside of the country as well as processing activities. There is also no tax on capital gains or dividends of companies headquartered in Mauritius. If a company is engaged in the exporting of goods, they are taxed at just 3%.

Registering a Company and Establishing an Entity in Mauritius

Foreign investors are required to establish a legal presence in the country should they wish to conduct business. There are various business entities to choose from, including companies, limited partnerships, civil or commercial partnerships, limited liability partnerships, trusts and foundations. A company is the most popular entity used and there are various types of companies available, including a public company, private company, one-person company or a global business company. Companies can be incorporated or registered under the Companies Act 2001 and can have a limited or unlimited life.

If a foreign investor chooses to set up a company, there are various legal status options including limited by shares, limited by guarantee, limited by shares and guarantee and unlimited.

Business Banking in Mauritius

It is mandatory to have an in-country bank account to process payments in Mauritius. Banks are generally open Monday to Thursday from 09:00 to 15:15, Friday from 9:00 to 17:00 and some banks are open on Saturday mornings.

What Are the Working Days and Working Hours in Mauritius?

Standard working hours should not exceed 45 hours (excluding time allowed for meal and tea breaks) and are made up as follows –

(a) Where the worker is required to work 5 days in a week, 9 hours of work on any 5 days of the week other than a public holiday

(b) Where the worker is required to work 6 days in a week –

• 8 hours of work on any 5 days of the week other than a public holiday and
• 5 hours on one other day of the week other than a public holiday

Basic Facts about Mauritius

Full Name: Republic of Mauritius

Population: 1.265 million (World Bank, 2018)

Capital: Port Louis

Major Languages: English, French and Mauritian Creole

Major Religions: Hinduism and Christianity

Monetary Unit: Mauritian Rupee (MUR)

Main Exports: Clothing, accessories, processed fish and raw sugar

GNI per Capita: $12,740 (MacroTrends, 2019)

Internet Domain: .mu

International Dialling Code: +230

The tax year in Mauritius runs from 1 July to 30 June.

Income Tax in Mauritius

Individual Tax

Residents of Mauritius are taxed on any worldwide income that they receive in the nation, this is taxed at 10% on annual income up to MUR 650,000 and 15% on annual income above MUR 650,000. Non-residents are taxed only on the income they earn in Mauritius. For tax purposes, expatriates living in Mauritius are considered a resident if their permanent home is in Mauritius or they spend over 183 days of the tax year in Mauritius, or an aggregate of 270 days in the tax year and the proceeding two years. The tax authority in Mauritius is the Mauritius Revenue Authority and tax returns must be submitted by 30th September each year.

Corporate Tax

A basic corporate income tax rate of 15% applies in Mauritius. If a company is engaged in the export of goods, they are liable to be taxed at a rate of 3%. A resident corporation is subject to tax on its worldwide income, however a non-resident corporation is liable to tax on any Mauritius-source income.

Social Security in Mauritius

Contribution Sociale Généralisée (CSG) has been introduced and has been applicable since September 2020. This new system of social contributions replaces the National Pensions Fund (NPF). An employee earning a basic wage or salary NOT exceeding MUR 50,000 in a month contribute 1.5% of their basic wage. An employee earning a basic wage or salary exceeding MUR 50,000 in a month must contribute 3% of their basic wage. Employees must also contribute 1% to the National Solidarity Fund, subject to a maximum ceiling amount of MUR 19,900 per month. Employers contribute 3% of basic wage of an employee whose basic wage or salary does NOT exceed MUR 50,000 and 6% of basic wage of an employee whose basic wage or salary exceeds MUR 50,000.

Employers are also required to contribute 2.5% of remuneration to the National Solidarity Fund, subject to a maximum ceiling amount of MUR 19,900 per employee and pay a monthly HRDC levy of 1% of basic salaries and wages of every employee.

New Employees in Mauritius

By law, an employment contract should be in place for an expatriate to work in Mauritius and it should be completed in the local language. The contract should be signed by both the employee and employer and detail the following:

• Working conditions (this includes working hours, breaks, etc.)
• The expatriate’s current situation
• Remuneration and overtime
• Compensation
• Bonuses
• Leave (annual leave, sick leave, maternity leave, etc.)
• Benefits (travel allowances, accommodation, etc.)

An offer letter and employment contract should state the salary and any relevant compensation amounts in MUR and not in a foreign currency.

Leavers in Mauritius

An employee or employer has the right to terminate an employment contract if the required notice period has come to an end or payment in lieu of notice has been made by the party wishing to terminate the employment. Employment contracts can be terminated verbally or by written notice. If an employee has been at a company for more than one year, three months noticed is required. If an employee has been at a company for less than one year, at least one month of notice before the end of the month should be given.

By law, if an employer terminates a contract when the employee has been in continuous employment with the company for a minimum period of 12 months, they must pay a severance allowance, unless the company can provide a valid reason to justify the dismissal. Severance pay is calculated as below:

• The equivalent of three months remuneration for every period of 12 months of continuous employment for unjustified termination plus any remaining annual leave, End of Year Bonus on pro-rata, notice period as per contract of employment or minimum of one month of notice period
• The equivalent of 15 days per years of service remuneration for every period of 12 months of continuous employment for justified termination plus any remaining annual leave, End of Year Bonus on pro-rata, notice period as per contract of employment or minimum of one month of notice period
• For a period of less than 12 months, one month of notice period is payable

It is legally acceptable in Mauritius to provide employees with online payslips.

Payroll reports must be kept for at least 10 years.