The Minister of Finance, Economic Planning and Development presented the Mauritius National Budget 2024/2025 on 7 June 2024 (the Budget). In his opening speech of what is the last budget of the current government's mandate, Dr. the Hon Renganaden Padayachy highlighted that the strategy for the Budget was investing in the population, whilst reducing inequalities to boost growth and development.

1. Financial services sector

The Budget has introduced significant amendments to the Financial Services Act 2007, aimed at fortifying regulatory oversight and bolstering the integrity of the Mauritius International Financial Centre.

1.1 Introduction of timeframes for licence processing

One of the main queries from promoters and investors that we normally struggle to answer accurately is the timeframe that the regulatory authority (the Financial Services Commission (FSC) may take to process an application for a licence for a financial activity. Currently, such timeframes can vary dramatically from one period of the year to another.

The Budget has highlighted that the FSC will implement new processes to reduce turnaround time for investor queries and licence applications, and will establish a timeframe to process specific licences. Once the timeframe is close to expiring, the application for such licences will be channelled to a fast-track sub-committee for their issuance.

Imposing timeframes for licence processing (application processes will be streamlined within 10 working days, subject to the satisfaction of all requirements) will help address concerns regarding bureaucratic delays, providing clarity and certainty for licence applicants and enhancing the attractiveness of Mauritius as a jurisdiction for investment and business establishment.

1.2 Increase in FSC fees

Whilst any measure for improving processing time for applications is always a welcome measure, in practice one of the reasons for such delays is a lack of staff or resources at FSC level. The Budget has provided that the FSC will be empowered to levy fees for post-application matters such as the appointment of officers and functionaries. The processing and annual licence fees payable by licensees of the FSC will also be increased. However, it is important to note that such increase in statutory fees does not affect the reputation of Mauritius as one of the best-value propositions in the region.

1.3 Requirement on qualified trustees

The Mauritius trust is one of the rare structures which involves no registration or licensing from the FSC. Notwithstanding the foregoing, the qualified trustee of a Mauritius trust (a statutory requirement which is occupied either by a licensed management company or a person so authorised by the FSC) is the person through which the FSC maintains an indirect supervision of it. The Budget has provided that the qualified trustee shall provide such information in respect of the trust as requested by the FSC. This is a legal obligation that would apply in respect of qualified trustees, notwithstanding their fiduciary duties as trustees, in line with the FSC's approach in terms of steps that aim to ensure regulatory oversight of trusts.

1.4 Timely reporting obligations

An Authorised Company shall file financial reports within six months of its financial year end.

1.5 Partial exemption regime

A resident corporation is liable to income tax on its chargeable income at the rate of 15%. Such corporation (including any global business company) will benefit from:

• an 80% or 95% (as relevant) partial exemption on certain income streams, provided relevant conditions are met; or
• credit for actual foreign tax suffered, whichever is more beneficial.

The list of specific income streams includes, inter alia, foreign-sourced dividends, profits attributable to a permanent establishment of a resident company in a foreign country, foreign-sourced income derived from a collective investment scheme, closed-end funds, CIS managers, CIS administrators, investment advisers or asset managers licensed or approved by the FSC, and foreign-sourced interest income.

In that respect, the following will be relevant following the amendments to the Income Tax Act 1995:

• holders of a Payment Intermediary Services Licence or a Robotic and Artificial Intelligence Enabled Advisory Services Licence will now benefit from the 80% partial exemption regime, provided they meet substance requirements;
• the 80% partial exemption granted to licensed closed-end funds will be extended to cover income from the sale of money market instruments or debt instruments;
• it will be clarified that the 80% partial exemption granted to a licensed CIS administrator will not apply to income derived from a management company providing administrative services to a CIS licence holder; and
• the exemption granted in respect of income derived from the sale of securities will be extended to cover sale of virtual assets and virtual tokens.

The extension of the partial exemption regime to the sale of virtual assets and tokens is a highly demanded and anticipated measure from industry players. It is anticipated that this will give a boost and convince promoters to establish their businesses as virtual asset service providers in Mauritius, given that they now have a favourable tax regime (that has so far helped elevate Mauritius to be an attractive proposition for investment vehicles dealing with securities) coupled with the modern legislative and regulatory framework established by Mauritius in the virtual asset space.

1.6 Funds regime

The Budget has announced that the funds regime in Mauritius will be reviewed to enhance the attractiveness of the jurisdiction. Currently, the funds space is regulated by the provisions of the Securities Act 2005 and its regulations/rules. The FSC is already in the process of industry consultation for amendments to the relevant legislation and the introduction of new regulations to modernise the relevant legislative framework and to cater for, inter alia, green funds and enhanced fund management rules.

1.7 Freeport

A company will now be able to operate in the freeport under both a global business licence and a freeport certificate. This will allow greater flexibility to such companies which principally carry out their activities outside Mauritius, notwithstanding their presence in the freeport zone. However, the eight-year income tax holiday available to qualifying freeport operators will not be granted to such entities also holding a global business licence.

2. Corporate

The Budget has included several amendments to the Companies Act 2001 (CA) which have important implications from a corporate and governance perspective.

2.1 Submission of constitution for companies limited by guarantee

The provisions of the CA currently impose no obligation on such companies to submit their constitution at the time of the application for incorporation. The Budget has now provided that amendments will be made to the CA to provide that companies limited by guarantee must submit a copy of their constitution as part of the application for incorporation.

2.2 Duties of a company secretary in a one-person company

In most one-person companies (where the sole shareholder is also the sole director), such sole person also normally carries out the function of the company secretary. Given the responsibility of the company secretary from a governance perspective, the CA will be amended to clearly define the duties of a company secretary nominated by a one-person company.

2.3 Notification of resignation of directors and secretaries

Although section 142 of the CA already imposes an obligation on the board of directors to deliver a notice (in a prescribed form) to the Registrar of Companies upon the appointment, resignation or removal of a director or company secretary, the Budget has reiterated that such obligation will be introduced to the CA. The Finance Bill will hopefully provide more details as to the nuances of such new proposed amendments with regards to the existing legal provisions.

2.4 Compliance of administrators in winding up limited life companies

For any unlimited liability company, the winding-up process is conducted by a registered insolvency practitioner and is subject to the provisions of the Insolvency Act. However, when it comes to limited life companies, it is the CA (and not the Insolvency Act) which provides for the appointment of an administrator (which includes a director, or such other person as may be appointed by the board).

There is no requirement for such administrator to be a registered insolvency practitioner and, as such, there was a grey area as to whether the administrator has an obligation to adhere to the provisions of the Insolvency Act for the purposes of the winding-up process. Such obligation will now be introduced by way of amendment to the CA and will help ensure that administrators adhere to the provisions of the Insolvency Act with a view to safeguarding and providing better protection for the interests of all stakeholders involved.

2.5 Obtention of prior no objection from FSC for removal of Global Business Licence Companies

The provisions of the CA did not specifically provide for the no objection from the FSC for the purposes of an application for the removal of a company holding a global business licence from the register of companies whilst specifically providing that no objection is required from the Commissioner of Income Tax and the Commissioner for Value Added Tax. In practice, such no objection was still required from the FSC but the amendment to the CA is welcome to avoid situations where the application is unnecessarily delayed due to the lack of express mention of the requirement for such no objection letter from the FSC.

2.6 Compliance of Global Business Licence and Authorised Companies with the CA

The Budget has provided that the CA will be amended so that Global Business Licence Companies or Authorised Companies must comply with provisions related to prejudiced shareholders and alterations to the constitution, unless their constitution provides otherwise. This will be a relief to minority shareholders of such entities as they were previously denied access to such recourse before the Commercial Court, and it was difficult to understand why such investor protection rights were denied to such category of shareholders when Mauritius actively promotes itself as a jurisdiction which aims to safeguard investor rights.

2.7 Other tax measures relevant to financial services and other related sectors

The Budget has introduced several significant changes to the taxation landscape in Mauritius across a wide range of sectors including the medical, biotechnology and pharmaceutical sectors.

Corporate Climate Responsibility Levy: The Budget has introduced this new levy payable by corporations and equivalent to 2% of their profits, but corporations with a turnover of less than MUR 50 million will be exempted. The government justifies the introduction of such a levy to raise funds (through a Climate and Sustainability Fund, open to donations from international organisations and individuals, and managed by a joint public-private committee) to support national initiatives to protect, manage, invest and restore the country's natural ecosystem and combat the effects of climate change.

Increased exemption threshold for lump sum payments: The exemption threshold on lump sums received as pensions, retiring allowances or severance allowances will be increased from MUR 2.5 million to MUR 3 million. Such increase in threshold is understandable, given the impact of inflation during the previous financial year and for the forthcoming one.

Interest income from public sector bonds: Interest income derived from bonds issued by public sector companies for financing infrastructure projects will be exempt from tax, subject to approval by the Minister of Finance, Economic Planning and Development. The aim is to drive further investment in such bonds and thus provide public sector companies with access to more funds for the purposes of undertaking and finishing their projects.

Compensation for losses due to natural disasters: Compensation payable by the government or a public sector body for losses directly or indirectly suffered as a result of a natural disaster, starting from 1 January 2024, will be exempt from tax. This is a welcome measure to exempt from taxation an amount that is obtained due to circumstances outside the control of the recipient due to the occurrence of an act of God.

Increased tax rate on income from intellectual property assets: Income derived from intellectual property assets by manufacturing companies in the medical, biotechnology or pharmaceutical sectors will be taxed at a rate of 15% instead of the previous 3%. This measure is in line with the government's commitment to comply with international norms and root out any incentive that can be deemed as a harmful tax practice by the Organisation for Economic Co-operation and Development.

Exemption for donor-funded projects with regards to Value Added Tax: VAT, customs duty and excise duty on the procurement of goods and services will be exempted for projects funded by donor organisations, provided the funding constitutes at least a 50% grant or concessionary loan. This is a welcome measure with the aim of attracting promoters setting up investment vehicles that obtain grants from donor organisations, such as the Bill & Melinda Gates Foundation, and channel such funds heavily into investments in African countries.

Management services for trusts and foundations: Services provided by a licensed management company to:

• trusts whose settlors and beneficiaries are non-residents; or
• foundations whose founder and beneficiaries are non-residents,

will be zero-rated for VAT purposes.

This amendment enhances the attractiveness of Mauritius as a hub for trusts and foundations by offering VAT relief on management services, allowing the jurisdiction to establish itself as one of the best-value propositions in the region.

Captive insurance: The Income Tax Act currently provides that the eight-year income tax holiday for captive insurers in Mauritius applies from the coming into operation of the Captive Insurance Act. The Budget has specified that the necessary amendments will be made such that the said eight-year income tax holiday applies from the date the company commenced its activities.

Period of assessment: The Budget has provided that amendments will be brought to the Income Tax Act so that the Mauritius Revenue Authority (MRA) will be empowered to make an assessment of tax payable over a maximum of four years prior to the taxable period in which a return is submitted, instead of four years prior to the taxable period in which the liability to pay tax arose. This is a measure which aims to provide for sufficient time to examine a return which was submitted late.

3. Banking sector

The Budget has introduced pivotal legislative amendments designed to fortify the banking sector in Mauritius. These legislative amendments signal Mauritius' commitment to creating a secure, efficient and transparent banking environment. Investors considering Mauritius will benefit from the enhanced regulatory framework, reduced operational risks and increased financial stability. By aligning with international standards and adopting best practices, Mauritius is positioning itself as a premier destination for the banking industry and offering a conducive environment for growth and profitability.

3.1 Amendments pertaining to the Banking Act 2004

The terms of appointment for auditors of branches or subsidiaries of foreign banks will be subject to review and approval by the Bank of Mauritius (BOM). This measure ensures stringent oversight, enhancing the reliability and transparency of financial reporting by foreign banks operating in Mauritius and will help in maintaining high standards of auditing, which is critical for investor confidence and financial stability.

A director, senior officer or employee of any financial institution will be prohibited from simultaneously holding a similar position of a licensee under the National Payment Systems Act 2018, except with the approval of the BOM. This measure aims to prevent conflicts of interest and to maintain the integrity of the financial system. Furthermore, by eliminating potential conflicts, it ensures that financial institutions operate with greater accountability and transparency, thus protecting the interests of the stakeholders.

The current requirement for financial institutions to provide at least 24 hours' notice to the public before transacting business on a bank or public holiday will be abolished. This change will streamline operational procedures, allowing financial institutions to operate on a cross-border basis more flexibly and efficiently, thereby improving customer service and operational efficiency.

3.2 Amendments to the Mauritius Deposit Insurance Scheme Act 2019

Banks and non-bank deposit-taking institutions will be able to make their initial contributions to the Deposit Insurance Fund on a date specified by the Board of the Mauritius Deposit Insurance Corporation Ltd. This amendment provides flexibility and ensures timely contributions to the Fund, which is vital for the protection of depositors and the stability of the financial system in Mauritius.

3.3 Key amendments to the National Payment Systems Act 2018

The National Payment Systems Act 2018, which provides for a regulatory framework for payment service providers, clearing houses and other entities involved in the processing and settlement of payment transactions in Mauritius, will be amended.

The Bank of Mauritius will be granted enhanced powers to specify qualifying payment instruments under the National Payment Systems Act 2018 and to authorise the operation of clearing or settlement systems. These enhanced powers will enable the BOM to effectively regulate and oversee payment systems, ensuring their safety, reliability and efficiency.

The BOM will have the authority to revoke the appointment of auditors and approve extensions for audit firms on reasonable grounds. This measure ensures robust oversight of audit practices within the sector, thereby maintaining high standards of financial reporting and accountability.

The responsibilities and duties of directors and officers of licensees under the National Payment Systems Act 2018 will be clearly defined. This clarification ensures accountability and adherence to regulatory standards, promoting good governance and operational integrity within the financial sector.

4. Virtual assets sector

The clarification of the taxation status of virtual assets in Mauritius is a welcome measure for many.

4.1 Amendments to the Income Tax Act 1995 pertaining to virtual assets

The announcement that the exemption granted in respect of income derived from the sale of securities will be extended to cover sale of virtual assets and tokens was long awaited by players in the virtual assets industry. Being one of the leading jurisdictions in Africa to have quite recently adopted a novel licensing framework in respect of virtual assets, there was still a major void in Mauritius in respect of taxation of virtual assets. This new positive measure clarifies the fiscal position of virtual assets in Mauritius while also having the effect of boosting the attractiveness of Mauritius in the cryptocurrency sphere.

4.2 Amendments to the Virtual Assets and Initial Token Offering Services Act 2021

It was stated that the Virtual Asset and Initial Token Offering Services Act 2021 will be amended to introduce a statutory obligation on a virtual asset service provider to appoint a senior executive at all times, duly approved by the FSC. The qualification and criteria of the senior executive would have to be defined and, subject to such criteria, may pose a challenge for early start-ups, although it may assist in attracting knowledgeable and experienced individuals to Mauritius. It is also anticipated that the senior executive would need to be a fit and proper person in accordance with the requirements of the FSC.

5. Working and living in Mauritius

5.1 Key initiatives relating to occupation permits

The Budget has introduced a reduction in the threshold for occupation permits for professionals from MUR 30,000 to MUR 22,500. The concern is that, with the gap between the threshold and the current minimum wage in Mauritius not being significant, this may result in increasing competition in the Mauritian employment market and reduction of opportunities for new Mauritian graduates. Additionally, with the current cost of living in Mauritius, this measure may not have much of an impact in attracting talented and experienced professionals to the country, given that most experienced individuals would have been benefiting from a higher salary in their country of origin.

An encouraging initiative would be that professionals with a minimum of 10 years' experience will now receive a temporary occupation permit of three months, allowing them to work pending approval. This would serve to provide comfort from the frustration which applicants experience between the point of receiving their approval in principle and eventually obtaining their permits.

A 10-year expert occupation permit will be introduced to attract foreign talents into wealth management, family office, virtual assets and virtual tokens. This initiative is aligned with the vision of making Mauritius an international financial centre by attracting sophisticated and skilled talents to the country.

5.2 Extension to the term of industrial or commercial leases by foreign entity without authorisation

Currently, non-citizens do not need approval from the Prime Minister's Office to hold property by virtue of a non-renewable lease agreement for industrial or commercial purposes for a term not exceeding 20 years in accordance with the Non-Citizens (Property Restriction) Act 1975. For the purposes of fostering an environment for investments, a foreign entity will be allowed to hold an immovable property by virtue of a non-renewable lease agreement for industrial or commercial purposes for a term not exceeding 30 years.

The new measure uses the term "foreign entity" as opposed to "non-citizen" which has a wider interpretation in the Non-Citizens (Property Restriction) Act 1975. It is to be seen whether this amendment would serve in narrowing the type of foreign lessee of immovable property, although it is mostly legal entities that tend to lease commercial and industrial property for longer periods of time. Such an amendment would no doubt benefit some of the major projects that are being carried out in Mauritius by foreign investors where it is necessary to hold property for an extended duration of time, such as for renewable energy projects.

6. Compliance sector

The Budget has announced two notable measures to enhance the fight against financial crime as Mauritius gets ready for the next Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) mutual evaluation exercise which is due to start in 2027.

6.1 Digitisation of the identity verification process

E-KYC will be extended to the global business sector. The digitisation of the identity verification process will not only streamline the customer onboarding experience, but will also provide a faster and more efficient way to complete customer due diligence measures. It will be recalled that, in 2021, the Mauritius legal framework was amended to allow reporting persons to undertake customer due diligence measures by means of reliable and independent digital identification systems where the customer is not physically present. Thus, no amendment to the Financial Intelligence and Anti-Money Laundering Act is anticipated.

6.2 Amendments to the Financial Crimes Commission Act 2023

Certain key amendments to the Financial Crimes Commission Act 2023 to ensure that our legal framework is aligned with the changes brought to the Financial Action Task Force (FATF) Recommendation 38 in November 2023 are also in the pipeline. Following the concern expressed by the FATF Ministers at their 2022 meeting that efforts to confiscate the proceeds of crime remain insufficient compared to the volume of criminal assets flowing through the global financial system and infiltrating national economies, the FATF made it a strategic priority to improve asset recovery outcomes. The revisions to FATF Recommendation 38 therefore set new forms of international cooperation which emphasise the importance of efficient channels and mechanisms to swiftly respond to requests for assistance by foreign countries to identify, freeze, seize or confiscate proceeds of crime across borders.

7. Environmental, social and governance sector

The Budget has reflected a comprehensive approach to balancing immediate social needs with long-term environmental sustainability and economic growth, underscoring the commitment of Mauritius to environmental, social and governance (ESG) principles. Below is a summary of the amendments and initiatives focusing on ESG.

7.1 Climate change adaptation and mitigation

The government has allocated approximately MUR 300 billion for climate change adaptation and mitigation projects. The aim of this substantial investment is to emphasise the importance of sustainable development and the need for proactive measures to address environmental challenges.

A new levy has also been introduced, requiring companies with a turnover exceeding MUR 50 million to pay 2% of their profits towards climate-related projects. This levy is expected to generate around MUR 5 billion, which shall thereafter be used to fund various environmental initiatives, thereby encouraging corporate responsibility and investment in sustainable practices.

7.2 Green economy

The Central Electricity Board will roll out prepaid charging stations for electric vehicles. This initiative forms part of the broader decarbonisation strategy aimed at reducing carbon emissions and promoting the use of clean energy.

7.3 Monitoring initiatives

The National Environmental Laboratory shall implement a quarterly monitoring programme for approximately 40 varieties of pesticides in the aquifer and water table. A liquid chromatograph with triple quadrupole mass spectrometer will be acquired for this purpose.

26 Internet of Things sensors will be acquired for real-time online monitoring of surface and groundwater quality.

In collaboration with the University of Mauritius and non-governmental organisations, a holistic and integrated environmental monitoring programme of the ecological flora and fauna of the southeast region will be implemented to evaluate the impact of oil spills.

By implementing these monitoring initiatives, Mauritius can enhance public health, protect its natural environment, optimise resource use and support sustainable economic growth.

7.4 Blue economy

An expression of interest will be launched by the Economic Development Board for private operators to undertake coral farming projects. This supports the aim of positioning Mauritius as a green destination and promotes sustainable tourism, ultimately benefiting the economy as a whole.

7.5 Morcellement projects

No morcellement permits shall be granted for projects with two contiguous residential plots of land, unless there is a minimum setback of 30 metres from proposed new or existing settlements.

Any morcellement or property development scheme project exceeding 10 arpents, or any smart city, will require a Strategic Environmental Assessment.

Developers will be required to allocate at least 4% of the total land area for the establishment of a green forest, predominantly featuring endemic trees designed to complement the development and provide usable green space.

The upkeep and maintenance of the green forest will be vested in the Association Foncière, or the Conservator of Forests in the case of a morcellement not managed by an Association Foncière.

The above can foster a more sustainable and resilient economy by promoting responsible land development practices, preserving natural ecosystems and enhancing the quality of life for both residents and visitors.

7.6 Enhanced social welfare

Maternity leave has been extended from 14 to 16 weeks and paternity leave from one to four weeks. A maternity allowance of MUR 2,000 per month for nine months has also been introduced.

Child allowances have been raised to MUR 2,500 per month and parents of children in private schools shall now be able to claim an income tax deduction of up to MUR 60,000 per child.

All these measures collectively contribute to the development of human capital by ensuring better health, education and overall welfare of children and families. A well-developed human capital base is crucial for sustainable economic growth and competitiveness.

7.7 Business environment

The government has implemented measures to streamline the regulatory environment, making it easier for businesses to operate. This includes relaxing conditions for work and occupational permits, removing quotas on foreign labour in key sectors and enhancing digitalisation of government services and legislative processes.

The 24/7 operation of the Corporate and Business Registration Department and the digitalisation of licences, the Government Gazette and legislations are aimed at reducing bureaucratic delays and improving transparency and efficiency in regulatory processes.

These would help attract investment, create jobs, enhance efficiency, promote transparency and foster entrepreneurship and innovation, all of which are crucial for sustained economic growth and development.

7.8 Economic growth

Mauritius aims to position itself as a MUR 1 trillion economy by 2030, leveraging its services as an international financial centre. New tax exemptions for virtual assets and tokens have been introduced to attract investment in financial technologies and foster innovation in the financial sector.

8. Employment sector

8.1 Minimum revenue

As from 1 July 2024, the minimum revenue (including CSG income allowance) for full-time employees will be increased from MUR 18,500 to MUR 20,000.

Since January 2024, the national minimum wage payable by employers to full-time employees was MUR 16,500 inclusive of the additional compensation for the year 2024. The CSG income allowance paid by the MRA was MUR 2,000 for employees earning up to MUR 25,000 and this guaranteed that the total minimum revenue of the employee amounted to MUR 18,500. As the minimum revenue will be increased to MUR 20,000, the CSG income allowance will also be increased to MUR 3,000 for employees earning less than MUR 20,000 per month.

In addition, the government will top up with a maximum of MUR 500 per month if an employee's income is less than MUR 20,000, including the CSG income allowance.

While this is a welcome measure for working individuals who are struggling with increasing inflation rates, as well as this increase having no financial impact on employers per se, economists might remain sceptical as to the amount being compensated by the MRA and the government to support this measure.

8.2 Parenthood

Fully-paid maternity leave will be increased from 14 weeks to 16 weeks, whilst paternity leave will be increased from five days to four weeks.

An additional two-week maternity leave has been announced for mothers who have given birth to twins or triplets, multiple births or to a premature baby. Whilst the current legislation already provided for paid leave in cases of miscarriage, birth to a stillborn child or upon adoption, the addition to cases of premature birth of a child is a progressive amendment. However, the interpretation of "multiple births" can lead to confusion in practice. It remains to be seen whether this will be defined or explained in the legislation.

Mauritius was already a country which provided for a high number of paid weeks of maternity leave and it has now been announced that a monthly maternity allowance of MUR 2,000 will be payable for nine months from the third trimester of pregnancy. It is unclear whether this will be payable by the employer in a similar manner to the maternity allowance of MUR 3,000 which is already statutorily prescribed and payable to employees who have been in continuous employment of 12 months upon the birth of a child.

Despite a legislative amendment being announced to prevent any discrimination in respect of career development, opportunity or promotion for employees on maternity or paternity leave, in practice, with the increased duration of maternity and paternity leave and with the newly introduced maternity allowance, employers may be reluctant to employ young female employees considering the increased costs associated with any potential pregnancy.

Whilst the prohibition to terminate employment of a female employee who is on maternity leave or nursing an unweaned child was already prescribed by law (except on grounds of redundancy), such law will now also be amended to extend the protection to an employee on paternity leave. Whether the amendment will lead to instances of misconduct and poor performance remains to be seen.

Lastly, the hot debate on the obligation on employers having more than 250 employees to provide childcare facilities seems to have come to an end with the announcement of specific regulations to facilitate implementation. The regulations are impatiently awaited, as it seems that many companies have failed to implement this measure which has been legally binding since 2023 due to the uncertainty in its practical enforcement.

8.3 Overtime, time off and refunds

Although it is common practice for trade unions to negotiate time off instead of the payment of overtime during collective bargaining, the law will be amended to provide more flexibility for the employee with the option of taking time off instead of being paid overtime. Employers may be reluctant to provide time off when the very reason why overtime has to be performed in the first place is to sometimes compensate for increasing business needs. Whether the law will provide for an obligation, or an option for the employer to grant time off instead of paying overtime, remains to be seen.

As expected, from October 2024, all employees (earning a basic salary not exceeding MUR 600,000 per year) will be eligible to vacation leave of 30 days if they remained in continuous employment from October 2019. The law will be amended to provide for refunds of vacation leave where workers are not granted their vacation leave due to business exigencies. This may be a welcome change for employers who have several employees eligible for vacation leave but cannot grant the leave concurrently or simultaneously due to disruption to the operation of their business.