On 5 June 2025, the Mauritian government unveiled its Budget 2025–2026, introducing substantial changes to the country’s fiscal framework. These reforms are designed to broaden the tax base, enhance fairness, and modernise the economy, but they also carry significant implications for expatriates relocating to Mauritius and foreign investors deploying capital on the island. The central question is clear: how will these changes affect your relocation, lifestyle planning, or investment strategy in Mauritius?

Adjustments to Personal Income Tax and the New “Fair-Share Contribution”

One of the most visible changes is the restructuring of personal income tax brackets. Young professionals between the ages of 18 and 28 earning less than MUR 1 million annually will now benefit from a full exemption on their income tax—a strong incentive for younger expatriates or skilled professionals seeking to establish their careers in Mauritius.

At the other end of the spectrum, the government has introduced the “Fair-Share Contribution” (FSC), targeting high-income individuals:

• A 15% contribution for individuals with net income (including dividends) above MUR 12 million.

• A 20% contribution where annual income exceeds MUR 24 million.

For expatriates or investors with significant dividend or salary income, this represents an additional cost to consider. However, for those at the start of their careers or relocating with moderate income, Mauritius remains highly tax-efficient.

The Taxes

QDMTT and Alternative Minimum Tax (AMT) for Corporates

From 1 July 2025, Mauritius will implement the Qualified Domestic Minimum Top-up Tax (QDMTT) and an Alternative Minimum Tax (AMT). These measures ensure that companies benefiting from exemptions or reduced tax rates still contribute a minimum level of tax.

While this marks a shift away from some of Mauritius’ historic advantages for corporates, it also reflects the country’s alignment with international tax standards. For foreign investors establishing entities on the island, it will be essential to reassess profit forecasts and operating structures to ensure compliance with the new rules while still leveraging Mauritius’ role as a regional gateway.

VAT Reforms

A notable change for both local and international businesses is the reduction of the VAT registration threshold to MUR 3 million in turnover. Many smaller enterprises will now be required to register for VAT and comply with the associated reporting obligations.

Equally important, digital and cross-border services are now explicitly subject to VAT in Mauritius. For international service providers or expatriates offering consultancy, IT, or digital solutions from abroad, this creates new compliance requirements and must be factored into pricing strategies.

Real Estate Investors and Non-Citizen Buyers

The budget introduces a clear tightening of incentives in the real estate sector. Several registration, transfer, and exemption benefits that were previously available to non-citizens purchasing property under schemes regulated by the Economic Development Board (EDB) have now been removed.

The Non-Citizens Property Restriction Act is also being reinforced, particularly in relation to dealings with state-owned land. In addition, Smart Cities will lose their earlier fiscal incentives and face new levies, which will alter the cost-benefit analysis for property developers and buyers alike.

For expatriates and investors interested in the Mauritian real estate market, these reforms mean fewer tax benefits and more regulatory oversight. The strategic focus is clearly shifting towards sustainable and balanced development, with stricter controls on foreign land ownership.

The Boost

Deductions for Capital Expenditure

A significant opportunity for investors comes in the form of the new “Investment Boost” measure, which allows for a 20% accelerated deduction of the tax value of new assets in the year of acquisition. This is optional, taken asset by asset, and complements the standard depreciation applied to the balance value thereafter.

This scheme can dramatically improve cashflow for companies investing in infrastructure, machinery, or technology, providing faster tax relief and shortening the capital recovery cycle. For foreign investors in manufacturing, hospitality, or technology infrastructure, this measure represents a clear fiscal incentive to invest now rather than later.

Incentives for the Digital Economy and Virtual Assets

Mauritius has positioned itself as a future-ready jurisdiction by introducing an 80% partial exemption for licensed Virtual Asset Service Providers (VASPs). This will significantly benefit fintech firms, digital asset managers, and start-ups in blockchain-related fields.

At the same time, deductions previously available to all businesses (such as double or triple deductions on expenses) will now be restricted solely to SMEs, limiting the scope of large corporate tax optimisation. This reallocation of incentives underscores the government’s strategy: encourage digital innovation while ensuring larger players contribute more equitably.

Expatriates Relocating to Mauritius

For expatriates, the implications of these reforms depend heavily on income levels and asset structures. The Fair-Share Contribution creates a new threshold to manage, while dividend income will now require careful planning. High-net-worth individuals may need to consider alternative holding structures or cross-border tax treaties to optimise outcomes.

At the same time, younger expatriates and skilled professionals benefit from reduced or eliminated tax liabilities, making Mauritius a welcoming jurisdiction for talent. Coupled with its lifestyle advantages, the country remains an attractive relocation choice, particularly for those seeking both professional and personal growth.

The government has signalled willingness to refine and clarify the regime in order to safeguard investment attractiveness, after facing criticism from financial actors who warned that an overly burdensome implementation might drive capital and talent elsewhere. However, there is an important caveat: dividends or distributions from a Global Business Entity (GBE / Global Business Licence company) are excluded from the FSC base.

For more in-depth information and rates regarding the new Fair Share Contribution and additional taxes, consider becoming a member.

Is Mauritius Still an Island of Opportunity?

The Budget 2025–2026 is a balancing act: it introduces stricter rules and closes certain long-standing tax loopholes, but it also opens the door to exciting opportunities in fintech, digital services, and capital-intensive investments.

For investors and expatriates willing to navigate these reforms strategically, Mauritius continues to offer stability, global connectivity, and a clear commitment to innovation. With careful structuring, the island remains one of the most compelling locations to live, work, and invest in the Indian Ocean region.

If you are exploring relocation or investment opportunities in Mauritius, now is the moment to align your strategy with these new reforms and seize the benefits of a forward-looking economy. To help you navigate change, we introduce you to top Wealth Management companies in France and in Mauritius to define strategic tax insights and a roadmap for investors.