New Economic Agenda

In June 2001, a New Economic Agenda (NEA) was designed to act as a set of policy guidelines that would lead Mauritius to become a 'high-tech and high income service and knowledge economy' in a five-year-period. The Agenda has four pillars, namely,

(i)   improving competitiveness,
(ii)  investing in human capital,
(iii) preserving the environment, and
(iv) modernizing economic management.

The Agenda aims to transform the Mauritian economy through important structural reforms and an ambitious investment program in education, health, transport, and infrastructure.

Fiscal and Monetary Policies

Fiscal policy in Mauritius is directed primarily at promoting long-term economic growth while at the same time ascertaining public expenditure management.

Monetary policy has been geared towards concentrating on its primary goal of ensuring price stability and preserving confidence in the domestic currency.

The official currency in Mauritius is the Mauritian rupee (MUR or Rs.). The exchange rate of the rupee is determined by market forces, and with the liberalization of the exchange control system in July 1994, all restrictions on transactions involving foreign currencies were abolished. Major foreign currencies are freely traded in the commercial banks of the country.

Investment Incentives

The law in Mauritius incorporates a number of tax incentives for investment that differ depending on the sectors. These incentives comprise income tax reliefs, investment allowances, and investment tax credits. The corporation tax rate in Mauritius across sectors stand at 15%.

Foreign exchange has been liberalized and capital profits and dividends can be freely repatriated. In 2001, the Mauritian government set up the Board of Investment (BOI), a specially empowered authority, whose objectives are to promote and facilitate investment on the island. The BOI acts as a one-stop shop for foreign investments in Mauritius.

Financial Structure

The Financial Services Commission which was established in 2001, is responsible for licensing and regulation of non-banking financial services including insurance and the stock exchange.

In order to promote investment in the financial services sector, authorities have recently introduced a Pioneer Financial Services Scheme, in which tax will be paid at the concessionary rate of 15%. Services and products qualifying for this scheme include foreign currency and portfolio management, options and other future instruments and factoring and other actuarial services.

Corporate Governance

In October 2003, the 'Report on Corporate Governance for Mauritius', commonly known as the Code of Corporate Governance for Mauritius was launched in October 2003. Compliance with the code which is on a 'voluntary basis', started as from 1^st July 2004.

In order to enhance investors' confidence in the financial reporting of firms, the Financial Reporting Bill was passed in 2004 to regulate the reporting of financial matters in Mauritius. Under this legislation, the Financial Reporting Council was established as a regulatory body with the responsibility of enforcing accounting and auditing standards and codes. Also, the Mauritius Institute of Professional Accountants was institutionalized.