Owning an SME in Mauritius
There has been an avalanche of Facebook questions from prospective business people coming to Mauritius wanting to set up an SME, so I thought you might like to know how it worked for me. 8 years on we are still standing, still making our contribution to the Mauritian Economy and loving this beautiful Oceanographic State.
Mauritius is like living within a Charles Dickins novel, punctuated by French courtesy, Hindu gentle humility and opportunism, and Creole joy. Mauritius still relies on connections, mutual benefits, common courtesy, good manners, and carefully explained actions. This works well, and respect for history traditions and religion go a long way to making it a peaceful place to do business.
In 2016 I bought a small scuba diving business in Pereybere in Mauritius, and I entered the Island as an Investor, bringing sufficient funds to ensure an investor permit. I am a recreational diver, so was not
qualified to act as the manager of a Scuba Diving business in Mauritius. This was to be a hobby for me, so I would need professional managerial help.
The previous owner Cedric stayed on for 6 months and I changed nothing. In a new country, its best to just learn how the locals manage. I kept his accountant, his auditor, and all his contacts, in the form of a small brown index book, which we still use (occasionally). I kept all his signage. He stayed to manage the diving centre and retained a small shareholding until Bryan and Riki arrived to set up an ISO system that would allow off-site management without changing the systems in the diving centre.
We built a new boat together. Cedric designed it based on the guys who dive with him, and it is specifically designed to suit every possible kind of diver. Entry into the water can be by giant stride, backward roll, seated entry, and in- water kit up. To me it is perfect. Walter Bernardis thought it was terrible- its got a lot of chrome, a huge roof, and it's long, lean and narrow, aerodynamic, sleek and fast. In Mauritius speed on the roads is very restricted, so its great to have a really fast diving boat.
We were lucky with our media presence. We all take a lot of pictures, make a lot of videos, and I became a full time diving journalist, published in many different industry publications.
Its worth reading the article by Greet Mulapius in the link to the DEPTH magazine Youtube.
So now we have a growing SME, we need to define our objectives, and as the Worlds Largest Oceanographic State they are obviously in the Marine Conservation and Scuba Diving Sectors.
These are under the control of The Tourism Authority. The Tourism Act is one of the few Acts that has had no changes since 2008. My lawyers read the Act and followed the law, but unexpectedly the Tourism Authority rely on POLICY to control the issue of licences.
If your business is in Tourism, read the POLICIES with great care, they are filled with complex standards and requirements. A small example is The Food Handlers Licence. We innocently opened a Coffee Shop and found that before we could serve any coffee the staff had to book a Food Handlers Training course. The next one was held 3 months after our planned opening, and the training took 3 days.
To solicit business you need a Canvasseurs licence. This means you can solicit business from tourists for a fee, usually 10% ( cost handed on to the customer) The canvasseur works for a Tour Operator
(another 10-20%, cost handed on to the customer). This is one of the huge issues plaguing Mauritius- it increases the cost of many tourist activities by 30%.
You must apply for a Tour Operators licence to book tours. So the easy options for foreigners are rather restricted. The best industries to invest in are listed on the EDB website. These guys keep careful records of businesses and they know in which direction the island is growing.
Mauritius uses several different administrative systems, and they are all published on the internet.
Start with the Companies Act. This tells you right away that LIMITED does not mean limited financial risk. It means limited by shares. The structure and activities are controlled by a constitution (shareholders agreement to most people). So be very careful to read the constitution before you enter a partnership agreement in Mauritius. If there is no agreement, get one drawn up in consultation with a contract professional and your accountant.
If you intend to buy a commercial property, then read the Civil Code. Property ownership is strictly controlled, and most foreigners can only buy a property in a designated area.
The Mauritian Civil Code is derived from the Code Napoleon and it describes and defines every single possible activity in Mauritius. Each activity has a Code number. If you want to do something that does not have a CODE, it could take years and an Act of Parliament to get it onto the list of codes.
There are variations as Common Law has changed some of the clauses, and English law has changed others, so its a guideline, but its worth reading before you come so that you understand what you are getting into. Its 314 pages long and its in French, but if you need an extract there are plenty to be found on Google.
The next one to understand is The Criminal Code. This is printed in English, is based on British law, and again, has changed, become more complex, and has kept in touch with changes over time.
Crime is infrequent and rarely an issue. To me the most intelligent use of manpower in Mauritius is the Police Force. Their mandate is TO KEEP THE PEACE and to SERVE and PROTECT. They control immigration, residency, administer the law, can collect debts and manage conflict at every level within their mandate. They are friendly, careful and respectful. The Coast Guard forms pert of the Police Force, and they too are bound by the same mandates.
If you decide to come to Mauritius as an SME then you must register with the Office of the SME. This will give you access to various platforms and financial assistance in Mauritius.
During COVID I discovered just how powerful and helpful the Mauritian Government can be. My accountant had insured that we were compliant with every commercial law, and as a consequence we were able to apply to the government for staff salaries for 18 months, and a loan of MUR 960 000 for our rent.
It is really important to understand what Mauritius systems need, and its even more important to come to Mauritius asking what you can contribute before you come. You need to remember if you decide to come here with an SME that you need them- its unlikely that Mauritius needs you. Here are a few things Ive noticed that need more attention.
Recycled plastic furniture
Composting of organic material. This is collected all over the island and is mixed with other materials, and on occasion, the methane gas starts a fire, as happened recently. There is no compost available, and this is a great conservation option.
Fish farming of indigenous species
Comments