Investors using Mauritius benefit from the islands enhanced relationship with several countries via its broad network of Double Taxation Avoidance Agreements (DTAA’s) and numerous bilateral agreements that essentially reduces tax burdens and gives preferential market access to 70% of the world’s population, spanning 85 countries and 5.4 billion consumers as well as reduced to no tariff barriers on countless products and services.

Establishing a company in Mauritius is a pathway through which the government facilitates non-resident investors and entrepreneurs, offering access to opportunities outlined in bilateral treaties. The government provides enticing incentives to attract investors, particularly in the manufacturing sector. These fiscal benefits include an 8-year income tax holiday for high-tech manufacturing companies, no import duties on equipment and raw materials, VAT reimbursement on raw materials at exports, accelerated depreciation on machinery, and tax incentives for Research and Development (R&D). Additionally, investors enjoy advantages such as a Freight Rebate Scheme, offering a 25% refund on basic freight costs for exports to eligible African ports, and a Support for Trade Promotion & Marketing Scheme, providing a 60% refund on air freight costs for various manufactured products. Streamlined procedures for recruiting expatriates, coupled with a 10-year work permit policy for expatriates in the manufacturing sector, further enhance the appeal for investors.

Moreover, in addition to providing investors with essential tools for success, the government has taken extra measures to ensure that manufactured products gain preferential access to a significant portion of the global market through established agreements such as AfCFTA, AGOA, CEPCA, COMESA, EPA, GSP, IOC, SADC, China FTA, Turkey FTA, and Pakistan FTA. To strengthen its role as a strategic partner for African states, the government is actively implementing pro-African policies to improve the investment climate, reinforce economic diplomacy, and broaden market access. With several African states experiencing economic transitions, there is a unique opportunity for sustained growth, structural change, and accelerated development. Positioned as the optimal trade platform, Mauritius serves as the gateway to and from Africa, attracting foreign partners in the midst of emerging opportunities.

For entrepreneurs in the international trade arena, aligning themselves with Mauritius through business establishment allows them access to these promising markets. Depending on your investment preference, Órama Corporate Services will guide you throughout the process. In this article we explore the bilateral agreements.

Regional Trade Agreements

Mauritius has strategically engaged in trade agreements with various regional blocs and countries, solidifying its position as a key player in the global trade arena. The island nation has entered into agreements with significant regional blocs, including the Common Market for Southern and Eastern Africa Free Trade Area (COMESA), the interim Economic Partnership Agreement with the European Union (EU), the Southern African Development Community Free Trade Area (SADC), United Kingdom – Eastern Southern Africa Economic Partnership Agreement (UK-ESA EPA),African Growth and Opportunity Act (AGOA), COMESA-EAC-SADC Tripartite Free Trade Area and the African Continental Free Trade Area (AfCFTA).

COMESA FTA

Established in December 1994, the Common Market for Eastern and Southern Africa (COMESA) replaced the Preferential Trade Area (PTA) formed in 1981. The COMESA Free Trade Area (FTA) was achieved on October 31, 2000, when nine member states eliminated tariffs on COMESA originating products. Mauritius, which joined COMESA in October 1994, actively participates in the Free Trade Area, enjoying duty-free and quota-free imports from COMESA Member States. The organization, comprising 21 member states with a population of over 389 million, emphasizes economic integration and regional peace and security. COMESA’s current strategy focuses on “economic prosperity through regional integration,” making it a significant marketplace for internal and external trade, boasting an annual import bill of approximately US$32 billion and an export bill of US$82 billion.

SADC FREE TRADE AREA (SADC FTA)

The SADC Protocol on Trade, signed in August 1996, began implementation in 2000, gradually eliminating customs duties on 85% of tariff lines by 2008 to establish the SADC Free Trade Area (FTA). Most Member States completed the elimination of duties on remaining ‘sensitive products’ by 2012. Trade within SADC Member States under the FTA is conducted on a duty-free basis. This grants Mauritian exporters duty-free access to other SADC Member States, with the exception of Angola, DRC, and Comoros, which are not yet FTA members.

African Growth and Opportunity Act (AGOA)

The African Growth and Opportunity Act (AGOA) builds on the existing Generalised System of Preferences (GSP) scheme and offers duty-free and quota-free market access to the United States for approximately 7000 products including the roughly 1,800 product tariff lines that were added to the GSP by the AGOA legislation. Mauritius became eligible to the third country fabric provision in 2008. Since then, Mauritius has taken advantage of the third country fabric provision, which allowed them to consolidate their exports on the US market.

COMESA-EAC-SADC Tripartite Free Trade Area

The COMESA-EAC-SADC Tripartite Free Trade Area (TFTA), decided in 2008 and officially launched in 2015, includes 29 Member States from COMESA, EAC, and SADC. It addresses challenges of multiple regional bloc memberships by synchronizing and harmonizing trade policies. Twenty-two Member/Partner States, including Mauritius, have signed the TFTA Agreement, with eleven ratifications so far. Once fourteen instruments of ratification are deposited, the TFTA, covering 29 countries with a population of 700 million and a GDP of USD 1.4 trillion, will come into force, attracting investment and fostering large-scale production.

African Continental Free Trade Area (AfCFTA)

Mauritius, as an African Union member, ratified the African Continental Free Trade Area (AfCFTA) agreement along with 46 other nations. In October 2021, the AfCFTA Council of Ministers adopted a directive allowing immediate implementation of tariff concessions for countries with submitted schedules covering at least 90% of tariff lines. The AfCFTA, in force since May 30, 2019, promotes free trade in goods and services, investment, competition policy, and intellectual property rights. Though only the Protocols on Trade in Goods and Trade in Services are currently in force, the AfCFTA aims to establish a single continental market, boost intra-Africa trade, and support economic transformation across 54 countries (excluding Eritrea).

United Kingdom – Eastern Southern Africa Economic Partnership Agreement (UK-ESA EPA)

Mauritian exporters enjoy duty free, quota free access on all products including products of export interest such as Tuna, Garments and Sugar. The Agreement has three components namely trade in goods, fisheries and Development Cooperation. Mauritius along with four (4) ESA States, namely Seychelles, Zimbabwe, Madagascar and Comoros, signed an Economic Partnership Agreement (EPA) with the UK.

European Union-Eastern Southern Africa Interim Economic Partnership Agreement (EU-ESA iEPA)

The Agreement has three key components: trade in goods, fisheries, and Economic Development Cooperation. It grants duty-free and quota-free access to the EU market for all products, including Sugar, Garments, and Tuna. While Mauritius has liberalized 96% of its tariff lines, certain sensitive products are excluded. Alongside Comoros, Madagascar, Seychelles, and Zimbabwe, Mauritius is implementing an interim Economic Partnership Agreement (iEPA) with the EU, signed in August 2009 and provisionally applied since May 14, 2012, with the consent of the European Parliament in January 2013.

Landmark Trade Agreements (Bilateral Trade Agreements)

Mauritius has achieved notable milestones in its trade relationships, including the first and only Free Trade Agreement (FTA) between China and an African nation. The Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India, effective from April 1, 2021, marks the first trade agreement between India and an African country. Additionally, a Comprehensive Economic Partnership Agreement (CEPA) between Mauritius and the United Arab Emirates signifies a groundbreaking collaboration with the Middle East.

Mauritius-China Free Trade Agreement (FTA)

The Mauritius-China FTA covers trade in goods, services, investment, and economic cooperation, addressing aspects such as sanitary measures, technical barriers, trade remedies, competition, intellectual property, and electronic commerce. Implemented in 2021, it provides immediate duty-free access for Mauritius on 7,504 tariff lines in the Chinese market, with an additional 723 lines phased out over 5 to 7 years. A Tariff Rate Quota for 50,000 tonnes of Mauritian sugar is being gradually implemented over 8 years. In trade in services, both nations agreed to remove restrictions in over 100 sectors, including financial services, telecommunications, and health services, recognizing China as the world’s second-largest importer of services.

Mauritius -India CECPA

The Comprehensive Economic Cooperation and Partnership Agreement (CECPA) came into effect on April 1, 2021. India, as one of the fastest-growing economies, offers Mauritian businesses a significant opportunity, granting access to a market of over 1.4 billion people. This is India’s first trade agreement with a country in Africa. The CECPA, with 9 chapters, facilitates the reduction of custom duties and relaxation of standards to promote service trade. It provides preferential market access for Mauritian exporters on 615 products, including 40,000 tons of special sugar at 10% duty, 2 million litres of beer at 25% duty, 1.5 million litters of rum at 50% duty, 5000 litres of fruit wine at 50% duty, 7.5 million pieces of garments at zero duty, and 7000 tons of canned tuna at zero duty. Mauritius reciprocates with preferential access on 310 products, including spices, tea, plastic articles, wooden furniture, parts of motor vehicles, among others. Both countries offer market access on over 100 subsectors in services such as insurance, banking, telecommunications, and professional services like accounting, auditing, architectural services, engineering, translation, and interpretation services.

Mauritius- Turkey FTA

The Agreement covers trade in goods only. Mauritian exporters benefit from duty-free and quota-free access on all industrial products. With respect to agricultural products, the FTA provides preferential access to Mauritian exporters on a list of some 40 products on a tariff quota basis, including products of interest such as tuna, cake decoration, noodles, food preparations, tropical fruits and pet food. Mauritius and Türkiye signed a Free Trade Agreement on 9 September 2011. The Agreement entered into force on 01 June 2013. The FTA is partly based on the European Union-Eastern and Southern Africa interim Economic Partnership Agreement (EU-ESA IEPA). The FTA supports access to a market of more than 80 million inhabitants.

Mauritius-Pakistan Preferential Trade Agreement

A Preferential Trade Agreement (PTA) was signed between Mauritius and Pakistan on 30 July 2007 and came into force on 30 November 2007. Under the PTA, tariff concessions have been granted on a list of products of export interest to both countries. Hence, allowing operators to trade with Pakistan on preferential terms. Pakistan offered concessions to Mauritius on some 130 tariff lines such as soaps and detergents, baby diapers, textiles and garments, fish and fish products and black tea among others. Mauritius offered concessions to Pakistan on around 102 tariff lines, including rice and cereals, biscuits, tobacco, textiles items and wood articles

Mauritius-UAE CEPA

The UAE and Mauritius have successfully concluded negotiations for a Comprehensive Economic Partnership Agreement (Cepa), the first of its kind between the UAE and an African nation. This landmark agreement covers trade in goods and services, investment facilitation, and collaboration in various sectors, aiming to enhance economic ties, increase trade and investment flows, and promote collaboration between the private sectors. Anticipated benefits include accelerated growth in non-oil trade, with opportunities identified in chemicals, metals, and petroleum products. The Cepa is expected to create new pathways for strategic investment, private-sector collaboration, academic cooperation, and support for small and medium-sized enterprises (SMEs).

Multilateral Agreements

World Trade Organization (WTO)

Mauritius joined the World Trade Organization (WTO) in 1995. The WTO’s primary goals include facilitating smooth, free, fair, and predictable global trade by managing trade agreements, serving as a platform for negotiations, resolving trade disputes, reviewing national trade policies, aiding developing nations with trade-related matters through assistance and capacity-building initiatives, and collaborating with other international organizations.

Generalized System of Preferences (GSP) Scheme

The Generalized System of Preferences (GSP) Scheme, established in 1971 under UNCTAD, is a non-reciprocal and non-discriminatory trade preference initiative offered by some developed economies to promote exports and growth in least developed and developing nations. Each developed country’s GSP Scheme provides duty-free or preferential treatment for specific products to selected countries. These schemes are reviewed every five years. Mauritius benefits from preferential treatment on locally manufactured and exported products through the GSP Schemes of Japan, Norway, Switzerland, the USA, and the Customs Union of Belarus, Kazakhstan, and Russia.

Global Network of DTAAs, IPPAs, & TIEAs:

Mauritius has concluded 52 Double Taxation Avoidance Agreements (DTAAs), with 21 specifically with African states, and is actively negotiating additional treaties. Additionally, the nation has ratified 44 Investment Promotion and Protection Agreements (IPPAs), with 24 in force with African states. Mauritius has also signed Tax Information Exchange Agreements (TIEAs), fostering international collaboration and facilitating significant tax reductions for cross-border entrepreneurs. DTAAs provide tax certainty and mechanisms to combat tax evasion, while IPPAs offer legal protection to foreign investors, covering issues such as property rights, fair treatment, and repatriation of profits. These agreements aim to create a conducive environment for increased investment flows and provide foreign investors with legal certainty and protection through international arbitration for dispute resolution.

Other Initiatives

Mauritius-US Trade and Investment Framework Agreement (TIFA)

The TIFA aims to strengthen and expand trade ties between the US and Mauritius, addressing various trade-related issues, including advancing the WTO Doha Development Round and implementing the African Growth and Opportunity Act (AGOA). It serves as a formal mechanism to address bilateral concerns, with discussions based on a jointly agreed Work Plan covering 14 areas of cooperation. Signed on September 18, 2006, in Washington, the TIFA provides an opportunity for closer collaboration on trade and investment promotion, private sector linkages, AGOA implementation, Intellectual Property Rights (IPR), trade in services, and other sectors.

Indian Ocean Commission (IOC)

Presently, only Mauritius and Madagascar are granting trade preferences under the IOC trade regime and there are no customs duties for products meeting the IOC rules of origin between the two countries. The Indian Ocean Commission (IOC) is an intergovernmental organization comprising Indian Ocean islands and aiming at promoting cooperation, through strengthening diplomatic, economic and commercial ties among its members. Member States of the IOC include Comoros, Madagascar, Mauritius, France (for Réunion), and the Seychelles.

Indian Ocean Rim Association (IORA)

Launched in Mauritius on March 6-7, 1997, the Indian Ocean Rim Association (IORA) defines a unique area of international politics along the Indian Ocean. Comprising 23 Member States and 10 Dialogue Partners, IORA is an inter-governmental organization aimed at enhancing regional cooperation and sustainable development. Its objectives include promoting sustainable growth, focusing on areas of economic cooperation, and facilitating the freer flow of goods, services, and investment within the Indian Ocean Rim. With a population of over 2 billion and a combined GDP of around $9 trillion, IORA represents about 11% of world trade. The identified priority and focus areas encompass maritime safety, trade facilitation, fisheries management, disaster risk management, tourism, cultural exchanges, academic and technology cooperation, blue economy, and women’s economic empowerment.

Mauritius, with its extensive trade agreements, plays a vital role in global trade dynamics, serving as a Strategic Trade Platform and fostering international commerce. With strategic partnerships across continents, it positions itself as a hub for global trade, promoting economic growth and collaboration. As a gateway to African markets, the island nation facilitates cross-border transactions, attracting entrepreneurs and investors. With a commitment to pro-African policies, Mauritius is poised to shape the economic landscape of the region.