Business Facilitation Act (2017)

The strength of business-Mauritius lies in the coherent strategy it has sustained over the years. Even if the country has known different leaders and governing party, we have maintained the same philosophy: transform the island into an international business hub. I can honestly say that every government has done its part when it comes to business facilitation, driving the entrepreneur minds to higher levels each time. From 1994, when I joined KPMG as a junior, till now, I have witnessed the impressive progress of the country in this field. I myself could climb the ladder from a junior to a CEO – proof that entrepreneurs have a business-prone environment to thrive on.

In 2001, the Companies Act was changed and came along the Business Facilitation Act. A country having a law named ‘Business Facilitation’ means….business. We are all too aware that Mauritius does not have any natural resources and it had the obligation to find something over and above tourism to succeed. But striking the right balance was the challenge. Taken !

Companies DivThe new Business Facilitation Act came into force on 20 May 2017 and is, again, very relevant. The first interesting element is the idea of reducing business registration delays. Company incorporation in Mauritius are expected to take 2 hours instead of 2 days (which was still good). All done online. As registered consultants, we have been working closely with the Registrar of Companies, doing client company administration. We have been among the first to test the online payment system. It works … close to perfection. I’ve never hidden my admiration for the excellent work the Registrar of Companies have been doing, all throughout the decades I’ve known them. They have constantly improved and they are well able to handle company incorporation within the 2-hours delay. Good point to note, the online Certificate of Incorporation will be a valid document henceforth. It is acceptable as a valid KYC (Know You Client) document.

One big thorn has been removed from the heel of entrepreneurs. You’ll read in my earlier articles, that a company needs to have a Trade License to open a bank account. All commercial banks have been strict on this (Except the MCB where no Trade License is required). This was a major obstacle, since the Trade License was itself a cumbersome procedure. It also meant that one would have spent money to pay for his license, before even having a bank account. I have often raised this point and showed my discontent with this relatively new condition, apparently imposed by the Bank of Mauritius. This condition was irrelevant and unnecessary. How to you send money, without being first able to put your capital in a bank account? It’s a relief that decision & policy makers have acknowledged this anomaly and removed it. Once a company is incorporated, it can open a bank account, collect the capital / contribution and from there apply for its licenses or proceed with investments.

Companies are also authorized to start their operations right after the incorporation is completed. IF Trade License is necessary (not falling into exempted activities), the business can apply in a period of 15 days after start of activity. So here, much importance is put on ‘launching the business’ instead of bureaucracy. Another excellent initiative.

TaxThe Business Facilitation Act also provides for an easier tax administration system. Online filing is a reality for some time now, both for individuals or corporate taxpayers. The Mauritius Revenue Authority’s office in Port Louis has reduced queuing time to zero. There’s absolutely no need to travel to Port Louis for tax administration purposes. This includes personal tax, VAT, Corporate Tax, etc. Additionally, employers will be able to also pay their social charges to the tax office (Mauritius Revenue Authority). A centralized system, which helps in better administration of employer responsibilities.

International trade and commerce is also facilitated through the new measures of the Business Facilitation Act. No import permit is required for second-hand motor vehicle parts & accessories. This measure also applies to other used, scrapped and second-hand goods. Such a relief for many as it opens the door to many opportunities. We can expect a shorter lag-time in case of machinery breakdown, and therefore a shorter disruption time for those in the manufacturing sector, for instance. Export permits have also been removed, except for 6 commodities : Portland cement, limestone, sand, rough diamonds, textiles exports to the USA & wheat or Maslin flour. Again, this will bring new dynamism in the international commerce sector.

There are also several changes in the construction industry. Several bureaucratic obstacles have been removed and many procedures made accessible through online systems. As government is laying much emphasis on the construction industry, it makes sense to streamline authorizations and permits procedures, which have long stood as hurdles for real estate promoters and developers.

With over two decades in business advisory and solutions provider, we have been privileged witnesses of the progress made to facilitate business ventures on the island. Gibson & Hills has seen (and has adapted) to many changes in the law; some not as positive as the Business Facilitation Act. We have always been able to advise and assist our clients (or future clients) to get the best out of Mauritius, in terms of business setting-up and management. If you are among those who want to invest, work or relocate to Mauritius, talk to us. Our advice and consultation are always free.