Mauritius and Asia: A Historic Connection
The relationship between Mauritius and Asia — particularly India — is one of the defining features of the country's identity and its financial services sector. Approximately 68% of the Mauritian population is of Indian origin, creating deep cultural, linguistic, and commercial ties with the subcontinent. This connection has been the foundation of Mauritius's role as the primary gateway for foreign investment into India for over three decades.
Beyond India, Mauritius is actively developing its connections with China, Southeast Asia, and other Asian markets. The country's geographic position in the Indian Ocean, its time zone (UTC+4, bridging Asian and European business hours), and its growing network of Asian DTAs position it as a natural bridge between Asia and África.
India: The Core Relationship
Historical Context
The India-Mauritius Double Taxation Avoidance Agreement (DTAA), signed in 1983, was for many years the most important DTA in Mauritius's network. Under its original terms, capital gains from the sale of Indian shares by Mauritius-resident companies were taxable only in Mauritius — where no capital gains tax applies. This provision made Mauritius the single most popular route for foreign portfolio investment (FPI) and foreign direct investment (FDI) into India.
At its peak, Mauritius accounted for approximately 35–40% of all FDI into India, making it the largest single source of foreign investment in the country. Major international funds, PE firms, and sovereign wealth funds routed their Indian investments through Mauritius GBCs to benefit from the capital gains exemption and the 5% dividend withholding rate.
The 2016 Amendment
In May 2016, India and Mauritius signed an amendment to the DTAA that introduced source-state taxation on capital gains from the sale of shares in Indian companies. The amendment was phased in gradually:
- April 2017 – March 2019 — Capital gains taxed at 50% of the Indian domestic rate (i.e., approximately 5–7.5% for short-term gains)
- From April 2019 — Full Indian domestic tax rates apply to capital gains (15% for short-term, 10–12.5% for long-term gains above INR 1 lakh)
While the amendment reduced the capital gains advantage, Mauritius remains a significant route for Indian investment due to other DTA benefits, the CECPA, and the deep institutional infrastructure that has been built over three decades.
Remaining Benefits for India Investment
| Income Type | India WHT (no DTA) | India-Mauritius DTA |
|---|---|---|
| Dividends | 20% | 5–15% (conditions apply) |
| Interest | 20–40% | 7.5% |
| Royalties/Technical fees | 10–20% | 15% |
| Capital gains (shares) | 15% (short-term) / 10–12.5% (long-term) | Full Indian rates (post-2019) |
CECPA: A New Chapter
The Comprehensive Economic Cooperation and Partnership Agreement (CECPA), signed in February 2021 and operational from April 2021, opens a new chapter in India-Mauritius economic relations. The CECPA covers:
- Goods — India offers preferential tariff access on 310 tariff lines to Mauritius (including frozen fish, specialty sugar, biscuits, fresh fruits, cut flowers, mineral water, and medical devices)
- Services — India allows Mauritius service providers access to 95 service sub-sectors, including professional services, computer services, R&D, financial services, and telecommunications
- Investment — The CECPA includes provisions on investment promotion and protection, building on the DTA framework
For Mauritius-based companies, the CECPA provides an additional competitive advantage when serving the Indian market, particularly in services sectors where Mauritius has strong capabilities.
China: Growing Opportunities
Mauritius is actively developing its relationship with China through several channels:
- Mauritius-China DTA — Provides reduced withholding tax rates on dividends (5%), interést (10%), and royalties (10%)
- China-Mauritius FTA — A free trade agreement signed in 2019, the first FTA between China and an Áfrican country. It covers goods, services, and investment
- Jin Fei Smart City — A Chinese-developed economic zone in Mauritius aimed at attracting Chinese businesses
- Belt and Road Initiative — Mauritius is a participant in China's BRI, creating opportunities for Chinese investment into África through Mauritius
- Renminbi clearing — The Bank of China in Mauritius provides RMB clearing services, facilitating trade finance between África and China
The combination of the China-Mauritius FTA and Mauritius's role as an Áfrican financial hub positions the island as a unique platform for Chinese investment into África — a rapidly growing flow that is reshaping the continent's economic landscape.
Southeast Asia and Other Asian Markets
Malaysia
Mauritius-Malaysia DTA provides reduced withholding tax rates. Malaysia's Labuan entities and Mauritius GBCs are sometimes used in combination for Asia-África investment structures. Significant Malaysian investment in Mauritius real estate and financial services.
Singapore
Mauritius-Singapore DTA provides reduced withholding tax rates. Singapore and Mauritius are often complementary — Singapore for Asia-Pacific, Mauritius for África. Some structures use both jurisdictions in a single investment chain.
Thailand
Mauritius-Thailand DTA provides reduced withholding rates. Growing interést from Thai investors in Áfrican markets, routed through Mauritius GBCs.
Bangladesh, Nepal, Sri Lanka
Mauritius has DTAs with all three South Asian countries, providing a platform for investment into these fast-growing markets. Particularly useful for investors combining South Asian and Áfrican portfolios.
Practical Advantages for Asia-Focused Business
- Time zone — UTC+4 allows same-day overlap with Asian business hours (morning) and European business hours (afternoon), enabling efficient communication with partners in both regions
- Language — Hindi and Mandarin are spoken by segments of the Mauritian population, in addition to English and French. Some Management Companies have staff fluent in Asian languages
- Direct flights — Air Mauritius and other carriers offer direct connections to major Asian cities including Mumbai, Delhi, Kuala Lumpur, Singapore, and Hong Kong
- Cultural affinity — The large Indo-Mauritian community creates natural cultural and business connections with India and the broader South Asian diaspora
- Banking — Major Asian banks (Bank of China, SBI, Bank of Baroda, Habib Bank) have operations in Mauritius, facilitating Asian trade and investment flows
Post-2016 India Strategy
While the 2016 DTA amendment changed the capital gains landscape for India investment, Mauritius remains relevant for India-focused structures. The benefits now lie primarily in dividend and interést income, the CECPA trade advantages, and the established institutional infrastructure. For new India investments, we recommend a detailed analysis of the current DTA benefits relative to alternative structures. See our DTA guide.
Asia Investment Structuring
Sunibel Corporate Services has extensive experience structuring investments into Asian markets through Mauritius. Whether you are investing in India, China, or Southeast Asia, our team can advise on the óptimal structure, DTA benefits, and compliance requirements. Contact us to explore how Mauritius can support your Asian investment strategy.