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Why Mauritius?

Summary

Full name: The Republic of Mauritius

Area: 2,040 km2 

Population: 1.3 million

Urban population: 39.5%

Population density: 622.4 people per km²

Population growth rate (change): 0.4%

Capital city: Port Louis

Languages: French, English and Creole

Currency: Mauritian Rupee (MUR)

Nominal GDP: US $12.4 billion

Real annual GDP growth: 3.9%

GDP per capita: US $10,547.2

Annual inflation rate: 3.7%

Unemployment rate: 6.9%

General government gross debt: 60.2% of GDP

Fiscal balance: -3.3% of GDP

Current account balance: -6.0% of GDP/US $-0.7 billion

Exports of goods to UK: £171 million

Exports of services to UK: £186 million

Imports of goods from UK: £69 million

Imports of services from UK: £146 million

[Source – mostly FCO Economics Unit, Apr 2018, World Bank]

 

Geography

Mauritius is an island nation situated in the southwest of the Indian Ocean about 800 km east of Madagascar. Together with Réunion and Rodrigues it belongs to the Mascarene Islands. It has an area of 2,040 km² and is densely populated with approx. 1.3 million inhabitants.

With the nation’s exclusive economic zone (EEZ); covering about 2.3 million km2 (890,000 mi2) of the Indian Ocean, Mauritius has successfully positioned itself as a regional business hub. Since its independence in 1968, Mauritius has undergone through various stages of economic transformation, transitioning from a sugar-based economy to a diversified and innovative economic model.

Map Of Mauritius Istock 865714096

 

Political situation

Mauritius is a stable democracy ranked 1st on the Mo Ibrahim Index for Good Governance in Africa. The island became independent in 1968 and free and fair elections are organised every five years. Transition of power is smooth and peaceful.

Mauritius is a unicameral parliamentary democracy modelled on the Westminster System. Executive powers lie with the Prime Minister and the President is the Head of State. The Judiciary operates independently from the legislative and executive branches.

Hon. Pravind Jugnauth became Prime Minister in January 2017 following the resignation of Sir Anerood Jugnauth who became a Minister Mentor, Minister of Defence and Minister for Rodrigues. Pravind Jugnauth is the leader of the Mouvement Socialiste Mauricien, the largest party in the ruling Alliance Lepep coalition which won the general election of December 2014. The Alliance Lepep currently holds 45 out of 69 seats in Parliament. The next elections are scheduled for the end of 2019.

The new economic agenda announced in the Budget Speech 2016-17 made provision for a total planned public sector investment of £3.2 billion over the next five years to be directed towards the financing of large-scale projects aimed at upgrading road, water, energy, air and sea transport networks and telecommunications, as well as fostering inclusive socio-economic empowerment.

[Source – FCO Overseas Business Risk/gov.uk]

Business and human rights

The Mauritius Human Development Index value for 2017 was 0.781, which put the country in the high human development category, positioning it at 64 out of 188 countries and territories.

Chapter II of The Constitution of Mauritius guarantees the protection of fundamental rights and freedom of the individual. A National Human Rights Commission was created under The Protection of Human Rights Act to deal with complaints of breaches of human rights listed in the Constitution and complaints against the police.

The Equal Opportunity Commission became operational under the Equal Opportunities Act of 2008 and it investigates allegations of discrimination and promotes equality of opportunity in both the private and public sectors. Mauritian law requires organisations employing more than 35 people to set aside at least 3% of their positions for persons with disabilities. Workers exercise their rights of freedom of association and the right to collective bargaining. The law prohibits the employment of children under 16 years of age and prohibits the employment of children between 16 and 18 years old in work that is dangerous, unhealthy, or otherwise unsuitable for young persons. The government introduced a minimum wage in January 2018.

Female participation in the Mauritius labour force is about 40%, with a growing prevalence of dual-income households. Women can enjoy an active social life without encountering any social or cultural restrictions and mixed-race marriages are not uncommon.

[Source – FCO Overseas Business Risk/gov.uk]

 

Economic overview

Economic Mauritius has transformed from a low-income economy based on agriculture (mainly sugar cane) to a diversified, middle-income economy. With a per capita income of approximately US $260 in the 1970’s, Mauritius is today classified as an upper middle-income economy with a per capita GDP of US $10,547.2.

[Source  World Bank]

Mauritius pursues a liberal and open economic policy and welcomes foreign investment in nearly all sectors of the economy and its nationals are not barred from investing elsewhere. The economy rests on financial services, tourism, sugar, textiles and canned tuna manufacturing. The country relies heavily on trade and investment with Europe and the US and also with markets like India, China and Africa.

In 2017, real GDP growth stood at 3.9% when measured at market prices and is estimated to be around 4% for 2018. The strong performance of the tourism and financial services sectors has impacted positively on the economic growth. Inflation rate stood at 3.7% and the unemployment rate was estimated at 6.9% for the same period.

Foreign direct investment (FDI) in Mauritius for the year 2017 amounted to MUR 17.491 billion, from the first preliminary estimate of MUR 14.228 billion, a 28.16% increase compared to 2016 FDI. Real estate activities, financial and insurance services, and construction attracted the most FDI. The top five FDI sources were France, Luxemburg, South Africa, China, and the UK.

[Source – Bank of Mauritius, as presented by EDB]

Mauritius wishes to position itself as a regional hub for investment into Africa. So far, Mauritius has concluded 44 Double Taxation Avoidance Agreements (DTAA) and 44 Investment Promotion and Protection Agreements (IPPA) worldwide, out of which 20 DTAAs and 23 IPPAs are with African countries. In February 2018, there were over 22,000 live Global Business companies operating in Mauritius. Total Assets for GBC companies increased from US $521 billion in 2014 to US $659 billion in 2017.

[Source – http://www.mra.mu/index.php/taxes-duties/double-taxation-agreements]

Mauritius is also establishing itself as a knowledge hub for Africa attracting many international universities. There are over 35 UK universities and awarding bodies offering UK qualifications recognised in Mauritius and the UK. Following the success of this project on the local market, international marketing is being carried out to attract foreign students, especially from African countries.

[Source – FCO Overseas Business Risk/gov.uk]

The World Bank ranks Mauritius as the 25th easiest place to do business out of 190 economies, see: http://www.doingbusiness.org/rankings.

The Heritage Foundation ranks Mauritius 21st in the world and first in Sub-Saharan Africa in their 2018 Index of Economic Freedom, see: https://www.heritage.org/index/country/mauritius.

Contact a Department for International Trade (DIT) export adviser at: https://www.contactus.trade.gov.uk/enquiry/topic for a free consultation if you are interested in exporting to Mauritius.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies, see: https://www.gov.uk/government/organisations/uk-export-finance. You can also check the current UKEF cover position for Mauritius at: https://www.gov.uk/guidance/country-cover-policy-and-indicators#mauritius.

[Source – DIT/ UKEF/gov.uk]

Business environment

Mauritius is considered one of the most business-friendly countries in Sub-Saharan Africa as a result of its political stability, good governance and independent judiciary.

Out of 190 countries, Mauritius ranked as the 25th most favourable country for business in the World Bank’s Ease of Doing Business Index for 2018 and 1st for Africa. The country is also highly rated against many other related international benchmarks. For example, it ranks 1st in Africa and 45th worldwide on the World Global Competitiveness Index 2017-2018.

Compared to other African countries, the risks of doing business in Mauritius are low. However, challenges have been reported in finding suitably qualified personnel e.g. in the IT, telecommunications, medical and other specialised sectors. Mauritius has a wealth of well qualified financial and legal personnel, most of them trained in the UK and it benefits from a bilingual French/English workforce. Local labour law can be complex and companies are recommended to hire highly qualified human resource personnel.

Mauritius also benefits from access to international arbitration. As from the 27th July 2018 the Mauritius International Arbitration Centre (or MIAC), will commence operations as an independent arbitration centre, bringing the highest level of dispute resolution services to the international community, with a particular focus on disputes in and with relation to Africa. For more information about setting up business in Mauritius please refer to the Economic Development Board: http://www.edbmauritius.org/.

[Source – FCO Overseas Business Risk/gov.uk]

Growth potential

The country acts as a platform for investment into India and has recently begun to establish itself as a gateway for investment into Africa.

Trade agreements

  • Mauritius is a member state of the Common Market for Southern and Eastern Africa (COMESA), see: http://www.comesa.int/. This agreement allows for trading on a full duty free and quota free basis among member states

  • It is also a member of the Southern African Development Community (SADC), members of which are largely exempt from customs duties. See: https://www.sadc.int/

 

UK and Mauritius trade

British business is strongly represented in sectors like financial services, education and renewable energy. UK organisations present in Mauritius include HSBC, Standard Chartered Bank, Middlesex University, University of Central Lancashire, Aberystwyth University, Glasgow Caledonian University, SANNE, Princes Tuna, AXA Africa Specialty Risks, British Airways, HIVE Energy and Videre Global.

Benefits for UK businesses exporting to Mauritius

Benefits for UK businesses exporting to Mauritius include:

  • similar business and legal practices

  • common language and historical ties (multilingual workforce)

  • convenient time zone (GMT+4)

  • availability of international arbitration

Strengths of the Mauritian market

Strengths of the Mauritian market include:

  • political stability

  • strategic location in the Indian Ocean

  • secure investment location

  • availability of legal, accounting and finance professionals

The UK exported goods worth £69 million to Mauritius in 2016. Export of UK services to Mauritius amounted to some £262 million in 2014.

The top UK export goods to Mauritius:

  • vehicles and mechanical components

  • beverages and spirits

  • electrical and electronic components

  • food products

Direct investment from the UK to Mauritius amounted to £16 million and UK tourists spent some £90 million in Mauritius in 2015.

[Source – DIT/gov.uk]

In addition:

Contact a DIT export adviser at: https://www.contactus.trade.gov.uk/enquiry/topic for a free consultation if you are interested in exporting to Mauritius.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Mauritius at: https://www.gov.uk/guidance/country-cover-policy-and-indicators#mauritius.

[Source – DIT/UKEF/gov.uk]


 

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