The incentives provided by Mauritius include:

Mauritius Freeport Zone

Qualifying companies that operate in the Mauritius Freeport zone and have received the Freeport certificate from the Board of Investment are entitled to a number of incentives, including:

Corporate income tax exemption;
Exemption from customs duties on imports;
Unrestricted repatriation of profits;
Access to offshore banking facilities; and
Access to Mauritius trade agreements.

Freeport operators or private freeport developers engaged in the manufacture of goods meant for the local market are subject to a reduced corporate tax rate of 3%. However, the application of the 3% rate is subject to meeting specified economic substance tests (see Sec. 12.5.).

Small and Medium Enterprises

Small and Medium Enterprises (SME’s) are eligible for exemption from corporate income tax and withholding tax for a period of 8 years beginning 1 January 2015. SMEs are defined as enterprises whose annual turnover do not exceed MUR 100 million and are registered on or after 1 January 2015.

Effective 1 July 2022, a 25% (increased from 10%) additional tax deduction is available to large manufacturers on purchases of locally manufactured products from SMEs. Large manufacturers are enterprises having an annual turnover exceeding MUR 100 million.

Tax Holiday

An eight-year income tax holiday is granted to the following:

Companies set up on or after 1 July 2017 and involved in innovation-driven activities for intellectual property assets which are developed in Mauritius. Effective 1 July 2020, the incentive is also extended to existing companies generating income from IP assets developed in Mauritius after 10 June 2019, subject to certain conditions;
Income derived from the manufacturing of pharmaceutical products, medical devices, and high-tech products by the companies incorporated after 8 June 2017;
Companies engaged in the exploitation and use of deep ocean water for providing air conditioning installations, facilities, and services (effective 24 July 2017);
Companies registered with the Economic Development Board and engaged in the manufacturing of automotive parts (effective 9 August 2018);
Companies engaged in activities under a sheltered farming scheme set up by the Food and Agricultural Research and Extension Institute (effective 9 August 2018);
Companies engaged in the manufacture of nutraceutical products with respect to operations commenced on or after 4 June 2020 (effective 1 July 2020);
Companies set up on or after 10 June 2019 and engaged in the development of the marina (effective 1 July 2020);
Companies approved by the Higher Education Commission as being a branch campus of an institution ranking among 500 tertiary institutions worldwide at the time of registration and the operations commence on or after 4 June 2020 (effective 1 July 2020);
Companies engaged in inland aquaculture scheme to promote the blue economy, and the operations commence on or after 4 June 2020 (effective 1 July 2020). Duty and VAT exemption is also provided to companies engaged in inland aquaculture;
Newly established freeport operator or developer (effective 1 July 2022) making an investment of at least MUR 50 million, provided that the freeport operator/developer:

starts its operations on or after 1 July 2022; and
conforms with the substance requirements as may be prescribed (to be based on OECD guidelines);

Companies using an innovative agricultural method under the Integrated Modern Agricultural Morcellement Scheme administered and managed by the Economic Development Board, beginning from the year of commencement of the activity (effective 1 July 2022); and
Companies engaged in sustainable agricultural practices and registered with the Economic Development Board, beginning from the year of commencement of the activity (effective 1 July 2022).

A five-year income tax holiday is available to the following:

Project developer or project financing institution in collaboration with Mauritius Africa Fund for developing infrastructure in Special Economic Zones (effective 9 August 2018);
Companies setting up an e-commerce platform provided the company is incorporated in Mauritius before 30 June 2025 (effective 1 July 2020); and
Companies deriving interest from peer-to-peer lending operations that commenced operations prior to 31 December 2020 (effective 1 July 2020).

Effective 1 July 2020, a four-year tax holiday is available to companies deriving income from bunkering of low-sulphur heavy fuel starting from the year ending 30 June 2019 or for companies set up from 1 July 2019.

The exemption period begins from the income year, in which the companies start their operations/ specified activities.

Incentive for Research and Development

A tax deduction of 200% is available effective from 1 July 2017 to 30 June 2027 (extended from 30 June 2022) in respect of qualifying research and development expenditure directly related to the existing trade or business of the company, which is carried out in Mauritius and for which no annual allowance has been claimed.

Qualifying expenditure includes:

Any expenditure relating to research and development;
Expenditure incurred on innovation, improvement, or development of a process, product, or service; and
Staff costs, consumable items, computer software directly used in research and development, and subcontracted research and development.

A 100% tax deduction is applicable for 5 income years on research and development, innovation, improvement, or development of a process or product not directly attributable to the company’s existing trade and business.

Effective 1 July 2020, companies engaged in medical research and development activities are granted the following incentives:

Double deduction on expenditure incurred on research and development carried out in Mauritius, provided no annual allowance is availed of; and
VAT exemption on the construction of medical research buildings and for plant and equipment.

Incentive for Green Economy

The following incentives are introduced to encourage a green economy in Mauritius:

Tax exemption of interest income derived from bonds, debentures and sukuks issued by foreign companies to finance renewable energy projects, approved by the MRA;
Tax exemption of interest income arising from sustainability bonds or sustainability-linked bonds issued to finance qualifying sustainable, social and environmental projects, effective 20 July 2023;
A tax deduction of 200% for consecutive 5 years in respect of expenditures incurred in relation to deep ocean water air conditioning, effective 1 July 2017;and
A tax deduction of 200% in respect of expenditures incurred in relation to the acquisition and setting up of water desalination plants. However, no annual allowance can be claimed in respect thereof, effective 1 July 2017.

Incentive for Vessel Owners

A corporate tax exemption on income from the operation and chartering of vessels is available for:

Owners of foreign vessels registered in Mauritius; and
Owners of local vessels registered in Mauritius. The exemption is restricted to income earned from deep-sea international trade.

Other Incentives

Tax Credits

Effective 1 July 2020, manufacturing companies are granted an investment tax credit of 15% for 3 years for investments in new plants and machinery (excluding motor cars) made during the period 1 March 2020 to 30 June 2026 (previously until 30 June 2023). Effective 1 July 2024, the scope of the investment tax credit is expanded to include artificial intelligence and patents. Unutilized tax credits can be carried forward for up to 10 years. Companies producing both alcoholic and non-alcoholic beverages can claim the investment tax credit for expenditure on plant and machinery solely used for the production of non-alcoholic beverages;
A tax credit for manufacturing companies engaged in the medical, biotechnology or pharmaceutical sectors that incur capital expenditure on the acquisition of patents. Unutilized tax credits can be carried forward for a maximum of 5 years, provided the company carries on the qualifying activity and does not dispose of/ transfer the patent during the 5-year period; and
Effective 1 July 2024, companies that invest in corporate nurseries (child day care) are granted a tax credit equal to 25% of the investment cost i.e. the capital expenditure incurred.

Double Deductions

A double deduction is provided to companies towards expenditure incurred on nurseries;
Effective 1 July 2020, a double deduction is provided to manufacturing companies for costs incurred on the acquisition of patents and franchises and cost incurred on compliance with international quality standards and norms;
Effective 1 July 2021, a double deduction is provided in respect of expenditure incurred for market research and product development targeting the African market and for the acquisition of specialized software and systems. The double deduction is available to companies with annual turnover not exceeding MUR 500 million and applies until 30 June 2023;
A double deduction is provided to companies in respect of the expenditure incurred on fast chargers electric cars utilized in the production of taxable income;
A 200% deduction is allowed on expenditure incurred on international accreditation by companies registered as health institution under the Private Health Institutions Act; and
Additionally, effective 1 July 2023, the following double deductions are provided:

for expenditure incurred by companies setting up a child day care centre;
to registered higher education institutions for expenditure incurred in connection with a contract concluded with an African university to provide joint tertiary education for the final year of a course in Mauritius;
to local companies participating in the financing, sponsorship, or marketing and/or distribution of an approved film project under the Film Rebate Scheme for theatrical or media streaming release, provided that at least 90% of the approved film is produced in Mauritius; and
to companies in respect of the emoluments paid to full time employed women under the Prime a L’emploi scheme in the period in which the payment is made.

Other Incentives

Sale of aviation fuel to airlines is considered an export of goods and can avail of a concessionary tax rate of 3%;
A 300% tax deduction (increased from 200%, effective 1 July 2024) is available with respect to the emoluments paid to disabled employees;
A 150% deduction is available to hotels for expenditure incurred for cleaning, renovation, and embellishment work in their public areas;
A 150% deduction for filing fees on filing a request for arbitration, conciliation, or mediation if the application is made to a recognized arbitration institution;
Monthly financial assistance is provided for salary compensations paid for the year 2023 as follows:

qualifying SMEs are paid MUR 250 or 500 per eligible employee based on the profitability of the company; and
export-oriented enterprises are paid MUR 300 per eligible employee, including expatriate employees; and

Effective 1 July 2023, companies making donations through electronic means to charitable institutions involved in the following activities are allowed a deduction equal to 300% of the amount donated (capped at MUR 1 million per year):

supporting persons with health issues and disabilities;
protection or rehabilitation of street children; or
animal welfare and protection.

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