What does it take to own and run a business in Mauritius? Let us dig into a non-jargon and down-to-earth article which outlines the pros and cons in an honest way. This is not a glossy page blog where you would expect to read only the glory side of the story. There are definite advantages in setting-up business on this tiny island. Mauritius has embarked itself on an ambitious strategy, that of playing forefront roles in regional (and why not, international) business and trade exchanges.
The island has signed numerous agreements and is member of several trade & cooperation networks. The objective is to stand as a ‘connected’ jurisdiction, linked with other major countries and zones, for the ultimate benefit of businesses registered and domiciled here. Infrastructure and connectivity have acknowledged massive upgrades through significant investment (and effort) to sustain its ambition. The legal framework, as well, has been addressed in a way to facilitate business creation and investment, particularly non-Mauritian ventures. A specific law, the Business Facilitation Act 2001, is evocative in name. You will find all sorts of documentations and brochures online and offline telling you why this country is perfect for business. It is not! No one is.
The cultural parameter
If you have not read our previous article entitled ‘The ethnic and cultural base of Mauritius’, I would advise you to first have a read there and come back. It is important to understand the cultural composition of the population. They will be your business partners, managers and employees. Other stakeholders stand as much important in the line, and there is a definite need for a non-Mauritian investor to understand all the parameters involved. It would first avoid the loss of time and money going on a trial-and-error route. One of the biggest mistakes is assuming that your winning business (and business-model) can repeat the same performances here.
Each country has its specifics, but Mauritius has another complexity, the multi-cultural composition of its population. This not only reflects on market behavior (external factor) but also in people management (internal factor). Both your offering and your operations will need to be adjusted to local realities, habits, behavior and culture. If this is neglected or ignored, then the chances of success are bleak, if not, non-existent.
Basically, you are addressing a melting-pot of all world cultures, anchored in many cases in ancestral traditions and religious beliefs. In a restaurant business, just to illustrate, you won’t attract too many Muslims if your business is not Halal certified. Pork removes you from the list. You might have a chance if you have different kitchen handling non-Islamic items. The Hindu community will avoid beef generally. Same as in Muslim beliefs, they would prefer not mixing beef with other items that they consume. You got it: count the number of kitchens, ovens, utensils and other equipment that you would require to satisfy everybody… and maximize market reach.
True that the younger generations tend to be more tolerant, but that still reduces your market reach. Reducing your market, in an already tiny place is not the best scenario to deal with.
Operational-wise, count at least one public holiday for each religious community on the island. That makes around 13 days off per year, added to the law-prescribed leaves (annual, sick, study, maternity, paternity, etc.). Muslims get a 2 hour off (between noon to 2pm) every Friday to attend to prayers. There’s just so many elements based on the cultural parameter that one needs to factor in while planning to set-up business in Mauritius.
Legal set-ups and permits
The first, and probably the easiest phase, is to register the legal entity which will host and operate your business. This is basically an online operation that can be done through the interface of a registered firm, or by yourselves. Doing it on your own takes a bit more time since you will need to first create an account on the platform. I’ve seen many trying and then finally renouncing.
There are not many structures to choose from, but this does not really mean restricted choices. The Law has been designed in such a way as to provide a versatile structure, which can be accommodated with additional ‘trading’ licenses as required by the business. We have addressed legal structures in previous articles, if you want to explore this line deeper.
Certain businesses require specific licenses when operating from regulated activities. These are subject to precise and strict conditions. For instance, businesses operating tourism activities, gaming and betting houses, banking and insurance, financial services and similar. The conditions may include limitation of non-Mauritian shareholding, validation of business premises, qualification of office bearers, financial guarantees and others.
Opening a bank account
This is a headache! You need to accept the fact that banks treat you as a suspect rather than a new client. Understandable that banks are very strict (that’s what they claim) but it all comes from their complacency for offshore businesses which contributed to put Mauritius under the Grey and Blacklists of doubtful jurisdictions. This classification, we all know, stems from financial transactions in the offshore sector of the island, brewing billions of dollars. And when we refer to money, the banks’ involvement cannot be denied. These days banks are playing the game of prophets, showing that they have been hyper compliant all the time, the bill is most of the time handed to simple and honest domestic companies.
While opening an account, you will scratch your hair, make no mistake. Beyond the list of documents, you will hit yourself against ghost committees taking an eternity to decide whether or not to open a bank account for you.
You can read more about this phenomenon on
Management companies & pseudo ‘expatriate’ experts
The introduction of Business Facilitation Act led to the sprouting of a new kind of experts on the island. It became so easy to register businesses and many found themselves a cow to milk. Charging hefty fees to foreigners for just form-filling and a couple of emails to the authorities. Real competences show themselves in difficult cases and there many of these pseudo-experts failed.
A second phenomenon was the appearance of expatriates who claim to be experts in Mauritius life and business areas. While they themselves are dependent on a residence permit, they advise their fellow countrymen on business creation and relocation projects, depriving local professionals from a certain source of income. It does not take long to uncover incompetence here. In fact, it is just about the money, not the service. With the popularity of social media, many of these experts have flooded the space, sometimes copying textually the contents of established firms or even sneaking their ‘Inbox me’ invitations. The joke ends when we come to strategy definition, restructuring or addressing the cultural diversity and DNA of Mauritian society. This is where so-called non-Mauritian experts in Mauritian life fail.
You can read about the dangers of social media experts here
and about the phenomenon of ready-made experts
The local labor market is a concern. Some call it a mismatch between the offer and the supply, others come with theories of generation (X, Y, Z, Millennials, etc.) and some others throw their university research on the table. The conclusions all lead to one and same element: there are shortcomings in every sector. Do not be surprised if your Mauritian employees master their rights more than their jobs. Most (not to say all) perfectly master the subject of employment laws and these laws are more about employee protection than anything else.
In case of dispute, and if you are a non-Mauritian, you’ll surely learn that your employee is a close relative of the Prime Minister (all Mauritians are) and that you might be deported from the country at any time. I am not being negative here but just warning that such words are not to be taken seriously, but you will hear them.
The population is highly educated and has that famous bilingual aptitude where English & French are written and spoken without any problem. If you are targeting an international business, the local competence will not deceive you. What may deceive it is the attitude, but then isn’t this universal?
Young Mauritians, graduates or not, prefer sitting at home and waiting for the ideal job. There’s no absolute social or peer pressure to leave parents’ home to seek independence. Youngsters are fed and housed by their parents as long as needed, and many a times, even after marriage. That lack of urgency, which is cultural, creates a slow reacting population and probably plays on the ambitiousness of people. This is a tiny island, parents or relatives are always two steps close, and again, this removes all sense of obligatory independence that you will find in big cities. No surprise that your employee might have abandoned his job without informing you.
The above are among the reasons why so many expatriates are present on the island, and in different sectors and hierarchy. Manual works (construction and textiles. for instance) are handled by foreigners. You will also find many Indians and Nepalese in restaurants around the island. Hotels are now trying to lobby with Government for permission to recruit around 25% of their personnel from abroad, but nothing is won yet.
To get the best out of your local employees, you need to have a properly defined framework, one which focuses more on the human side. Excessive pampering does not guarantee any results, and anyway, businesses are not created for that purpose. Employers need to factor in the cultural diversity and make an effort to understand the local specificity.
This is an island; time is only now positioning itself as an important element of life. It was there in older generations, but then the new wave of Emo-kids and other more sensitive-minded people came in with their ‘mystic’, ‘free-flow’ and ‘Tarzan boy’ mindset. The world is an open space, we are the winds, and we flow when and where we want. There was a time when this attitude was awful, but glad to note that is of lesser importance these days. All parties, almost, have walked mid-way to each other and reduced the gap between expectations and reality.
Nonetheless, punctuality has not been fully addressed and I do not think it will ever be. Island lifestyle makes it difficult to adjust the internal clocks of people. It is better to work with it. Excuses will be many, you will have to smile at them. This applies not only to work situations, but also for meetings whether formal or informal.
The best way to address this is to understand that you will probably never be able to correct it. Embrace it. Inform clearly when it goes overboard. In my personal situation, I tend not to bother myself with it if it does not affect productivity and quality of work.
Too good to say ‘No’
We have not learnt to say ‘No’. Therefore, please do not take all ‘yes’ for a ‘yes’. Nothing is impossible, during conversations. But when comes the time to deliver, your angle will vanish and will not answer your calls – will see you again, next time, with a very dramatic excuse (add tears for the most talented ones). There’s a saying in Mauritius: Cats do not drink hot milk twice. You will be wiser to decode body language and understand when a ‘yes’ is a ‘no’. This is not really about dishonesty but the incapacity of Mauritian to displease when their help is requested. You will find this element in every sphere: business, work and social.
Here’s a glimpse of that famous Mauritian way
I can write books with several volumes about Mauritian culture. It is a passion on its own and probably that’s the reason behind specializing around relocation to Mauritius, my country. It might sound negative in tone, but it is rather honest. It has always been on our minds to showcase the island’s backstage as it is. There is no intention to aggressively sell the services and thus an obligation to present only a distorted all-pink scenario.
Feel free to contact us for more ‘behind the curtain’ information.