On 08 November 2014, the Vice Prime Minister and Minister of Finance and Economic Development of Mauritius (Minister) presented the National budget for the year 2014 (Budget 2014).
The Budget 2014, which was announced by the Minister as being the budget of empowerment, is perceived as both visionary and challenging for the Government of Mauritius (Government) because of the measures that it ambitions to implement amidst the context of the continuing global economic crisis. Indeed the Budget 2014 has a four-fold goal:
(a) First, it addresses the sensitive issues of unemployment, stagnating economy and budget deficit;
(b) Secondly, it endeavours to lay the foundations for a better future for the economically vulnerable group by opening business opportunities to the small and medium enterprises in order that they become important actors in the economic growth of Mauritius;
(c) Thirdly, the Information and Communication Technology and BPO sector are now being pushed as the fourth pillar of the Mauritian economy; and
(d) Finally, its measures are geared to ensuring continuity in the measures that the National budget of 2012 had announced.
Of interest to those operating in the offshore commercial sector, the Budget 2014 has actually involved the offshore commercial sector in order to resolve the national issue of stagnating economy.
(a) First, the Budget 2014 has opened up opportunities for companies that are licensed by the Financial Services Commission of Mauritius (FSC) as category 1 global business license companies (GBC1) inasmuch as these companies will now be authorised to purchase property in Mauritius under the Integrated Resort Scheme /Residential Estate Scheme also known as the IRS/RES schemes. Furthermore, GBC1 companies will now be authorised to deal with residents. In this regard, the Budget 2014 announced that a joint committee under the FSC Consultative Council had been appointed to provide recommendations on how this may be achieved;
(b) Secondly, the Mauritius Investment Promotion Act will be amended to include investment in Initial Public Offerings as a qualifying business activity for the purposes of granting Permanent Residence in Mauritius to foreign citizens;
(c) Thirdly, new legislation on Captive Insurance will be brought into the Mauritian legislative framework to transform Mauritius into a captive insurance jurisdiction of choice; and
(d) Finally and importantly, as an endeavour to continue the vision underpinning the National 2012 budget, the government is further expanding what is now known as the Expanded Africa strategy.
The challenge that the Government has set itself in its vision under the Budget 2014 at a sensitive time of international economic anxiety cannot be underestimated. However, there is no doubt that the radical change of position on the part of the Government vis-à-vis the enhanced role of the offshore commercial sector augurs better days and increased opportunities for those operating in the offshore commercial sector.
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