Mauritius Free Trade Zones

The Mauritius Export Processing Zone (EPZ) was set up in 1970, and has become one of the country's biggest centers of employment, particularly in the garment manufacturing trade. The EPZ is meant for manufacturers and food processors who export 100% of their output, although permission is sometimes available for 10-20% of output to be sold locally.

In order to set up in the EPZ, an Export Enterprise Certificate must be obtained from the Ministry of Industry and Technology, involving a certain amount of bureaucracy. Once established in the EPZ, the following incentives apply:

No customs duties or sales taxes payable on raw materials and equipment;

No corporate taxes payable and no withholding tax on dividends;

• No capital gains tax;

• Free repatriation of dividends, profits and capital;

• 60% remission of customs duties on buses for personnel transport;

• 50% reduction in registration fees payable on land and buildings;

• Relief on personal income tax for two expatriate staff.

Companies in the EPZ have access to the African Preferential Trade Area and quota-free access to the European Union.

There is also an Export Services Zone, providing benefits comparable to those of the EPZ to companies offering support services to exporters in the EPZ.

Freeport facilities were established at the port and airport under the Freeport Act 1992 (now repealed and re-enacted as the Freeport Act 2001). Although numerous licenses were issued under the Act, lack of storage facilities limited take-up of the benefits for some years. The incentives offered are broadly similar to those available in the EPZ, see above, and in addition there are reductions in port handling charges for re-exports.

The new Mauritian government announced plans in 2001 to create an IT free-trade zone on the island. Prime Minister, Anerood Jugnauth, said: The year 2001 will be marked by the relaunch of the Mauritian economy. We want to make Mauritius an information technology free trade zone with digital parks.'The digital parks will offer all the latest available technological facilities to meet the needs of IT business, and the government aims to provide a series of fiscal incentives to both domestic and foreign businesses operating in Mauritius, including a 5-year tax holiday.

Jugnauth also announced the launch of an official body to promote the IT sector in Mauritius as a major centre for foreign businesses. It is expected that the IT free trade zone will create thousands of jobs on the island. The government hopes to emulate the success of its Export Processing Zone (EPZ). In 2002 the government allocated US$100m to the development of its 'cyber-city', and announced that its information super-highway would have 80 gigabits of bandwidth.

As of early 2006, the Ebene Cyber City is in operation, and has attracted 25 operators so far.