Investing in Mauritius via SCI: Benefits and Pitfalls

Published on October 4, 2025 and written by Cyril Jarnias

Investing in Mauritius Through a Real Estate Civil Company (SCI)

Investing in Mauritius through a Real Estate Civil Company (SCI) is an opportunity generating increasing interest among international investors, attracted by favorable tax conditions and an encouraging regulatory framework.

However, even though the prospect of enjoying an exceptional tropical estate and benefiting from attractive returns is appealing, it’s crucial to explore the various aspects of this investment to avoid potential pitfalls.

Understanding the specific tax advantages and protecting against legal traps allows for maximizing benefits and ensuring a sustainable and secure investment.

Optimizing Legal Structure Through an SCI

A Real Estate Civil Company (SCI) in Mauritius constitutes a particularly suitable legal structure for real estate investors, whether residents or foreigners. It addresses objectives of management, tax optimization, and wealth transfer.

Specifics of an SCI in the Mauritian Context

• The SCI is considered an offshore company that can be created by non-residents.
• It facilitates the collective acquisition and management of real estate properties, particularly in residential or commercial projects.
• Anonymity is preserved: the identities of partners remain confidential.

Tax Advantages

• Significant reduction in tax burden on rental income generated by the property held via the SCI.
• Optimization during wealth transfer: it’s possible to gradually organize the donation of shares rather than the property directly, which typically allows for partial or even total exemption depending on certain brackets and periodicity (for example, up to €100,000 every 15 years per donor).
• Savings on registration duties during real estate purchase thanks to the collective acquisition mechanism. Duties are calculated on the land value divided by the total number of planned allocations, then applied proportionally.

Tax Advantage	Description
Registration Duties	Calculated proportionally; significant reduction if group acquisition
Wealth Transfer	Facilitated progressive donation with renewable allowances
Income Taxation	Possibility to optimize taxation based on chosen tax regime

Legal Aspects

– Limited liability: each partner is only liable up to their contributions. In case of social debts not covered by the company’s assets, only this share can be mobilized.
– Statutory flexibility: free organization among partners to define internal rules (decision-making quotas, transfer terms…).

• Effective protection against direct seizure of personal assets
• Increased difficulty for a creditor to directly seize shares
• Possibility for a foreign investor or multiple family members/foreign partners to associate without constraint

Concrete Examples

1. Family acquisition:
   • Several members purchase a villa together through a family SCI so that each holds a specific number of shares corresponding to their initial contribution.
2. Rental investment:
   • A foreign investor holds several tourist apartments for seasonal rental under an SCI; they optimize their taxation while easily organizing their future succession.
3. New collective project:
   • Participation in a project where ten villas are built; each buyer pays only their actual share of the land during initial duties thanks to integration into the structure from its opening.

Potential Pitfalls and Limitations

Thus, when used wisely with specialized local advice, the SCI remains a high-performing tool but requires both legal and tax rigor to fully secure investment and wealth transfer in Mauritius.

The Advantages of an SCI for Real Estate Purchase in Mauritius

A Real Estate Civil Company (SCI) is a legal entity intended for the collective holding and management of one or more real estate properties. Its operation is based on the association of several persons, called partners, who make contributions (financial or in-kind) to constitute the share capital. The articles of association define the company’s purpose, registered office, duration, as well as management terms and each partner’s rights. The SCI allows flexible management of real estate assets: regular meetings, appointment of a manager responsible for daily administration, and distribution of shares among members according to their contributions.

Tax Advantages of an SCI in Mauritius

• Attractive tax rates: Real estate acquisition or resale is subject to only 5% government taxes.
• Absence of capital gains tax on real estate.
• No specific inheritance taxes for non-residents under the current Mauritian regime.
• Possibility for a family SCI to easily distribute ownership among heirs while limiting their tax exposure.

Flexibility in Management and Wealth Transfer

• Facilitated transfer through share assignment rather than direct property transfer.
• Quick adaptation to family or strategic changes thanks to regular meetings and possible statutory amendments.
• Possible appointment of a provisional administrator or easy change of manager.

Attractiveness for Foreign Investors

The legal structure provides reassurance through its administrative transparency:

• Increased security during transactions due to required formalities during creation (detailed articles of association).
• Ease of grouping multiple investors in the same project through flexible share distribution.

International Wealth Optimization

The SCI enables:

• Collective holding suitable for international families wishing to preserve their transgenerational wealth while benefiting from Mauritius’ advantageous tax framework.
• Optimal use of share capital to structure international investments and limit personal risk exposure.

Structure	Main Advantages	Limitations
SCI	Collective management; transfer flexibility; mild taxation; family adaptation	Requires administrative rigor
Direct holding	Apparent simplicity; initially low cost	Less flexible in case of death/transfer; less optimized taxation
Commercial company (GBC)	Allows ancillary commercial activities; facilitated banking access	Heavier administrative constraints; strict local obligations

Alternatives such as direct holding or via commercial companies exist but are often less suitable when dealing exclusively with residential real estate investment. The SCI therefore stands out as an ideal solution for those wishing to combine local tax optimization, intergenerational flexibility, and legal security in an international context like that offered by Mauritius.

Understanding Company Law in Mauritius

In Mauritius, company law offers several legal structures adapted to different investment projects and investor profiles. Here is an overview of the main corporate forms, their creation procedures, legal requirements, and tax obligations.

Company Type	Liability	Minimum Share Capital	Number of Partners	Taxation
Limited Liability Company (LLC)	Limited to contributions	No legal minimum	1 or more	Corporate Tax (15% standard), advantages by sector
Public Limited Company (PLC)	Limited to contributions	Higher	At least two shareholders	Corporate Tax, possibility of stock exchange listing
Real Estate Civil Company (SCI)	Unlimited but non-solidary among partners for company debts	Fixed in articles of association	Minimum two	Income Tax by default or option for Corporate Tax

Registration Procedures

• Drafting articles of association: necessary for all companies. The articles specify the legal form, company name, business purpose, registered office, duration, and capital.
• Filing documents with the Registrar of Companies: with supporting documents on the identity of partners and directors.
• Legal publication: an announcement must be made in an official gazette.
• Registration: obtaining the Certificate of Incorporation which formalizes the legal birth of the company.

General Legal Requirements

• Declaration of registered office located in Mauritius
• Regular maintenance of accounting compliant with local standards
• Compliance with annual tax and administrative declaration obligations

Tax Obligations

• Corporate tax generally set at 15%; certain sectors benefit from exemptions or reductions.
• VAT applicable according to thresholds defined by the Mauritian government
• For SCIs: choice between income tax or corporate tax during registration

Legal and Financial Advantages Related to Creating an SCI for Foreign Investors

The SCI allows flexible and personalized collective management of real estate assets.

• Succession optimization thanks to freely negotiable distribution of shares.
• Increased confidentiality on the real identity of holders through indirect holding via shares rather than in one’s own name.
• Advantageous taxation: possibility to choose between Income Tax or Corporate Tax depending on sought wealth strategy; often milder taxation than that applied in Western Europe.
• Ease of entry/exit from capital without direct property resale.

Specific Steps to Create an SCI

Simplified list:

1. Draft articles detailing notably contributions in cash/kind/industry;
2. Specify exact capital distribution among partners;
3. Officially register with the Registrar of Companies after legal publication;
4. Explicitly choose desired tax regime during registration.

Potential Regulatory Pitfalls/Difficulties for Foreign Investors

• Sectoral prohibitions/restrictions: certain real estate properties remain inaccessible outside specific schemes like IRS/RES/PDS intended for foreigners;
• Sometimes imperative necessity to obtain additional authorizations (Board of Investment…) before effective acquisition;
• Complexities related to international monetary exchange if investing from outside Mauritian rupee zone;

Also beware:

• Poor statutory drafting can lead to serious subsequent disputes regarding internal governance or succession terms.

Legal Framework Regarding Partnerships

Mauritius also recognizes various partnership forms (classical/commercial partnerships), allowing flexible pooling without necessarily constituting an entity with separate legal personality. These structures facilitate temporary collaborations/joint projects while preserving administrative simplicity.

Long-term Perspectives & Attractiveness for International Investors

Mauritius remains highly competitive thanks to:

• political/legal stability,
• international double taxation agreements,
• incentive tax environment,
• facilitated access to African & Asian markets via preferential trade agreements,

which durably positions its corporate structures as a preferred vector both for wealth optimization and international entrepreneurial strategy.

Avoiding Tax Pitfalls When Investing with an SCI

Tax Differences Between an SCI and an LLC in Mauritius

Characteristic	SCI (Real Estate Civil Company)	LLC (Limited Liability Company)
Main Purpose	Real estate management, property holding	Commercial or management activities
Profit Taxation	In principle taxed as income at partner level, except Corporate Tax option; possible transparent regime	Normally subject to Corporate Tax (CT), possibility of temporary option for Income Tax in certain cases
Transfer	More flexible via share assignment	Heavier formalities
Liability	Unlimited and joint among partners	Limited to amount of contributions

In Mauritius, applicable taxation differs according to legal form. The LLC is typically subject to local corporate tax with structured management of manager remuneration. The SCI allows more wealth and succession optimization but may be limited regarding purely commercial activities.

Specific Local Tax Regulations in Mauritius Applicable to SCIs

• Standard corporate tax is set at 15% for any company fiscally domiciled in Mauritius.
• There is no taxation on capital gains nor withholding tax on dividends or interest distributed locally.
• For certain export activities, a reduced derogatory rate applies (3%).
• The foreign tax credit mechanism can bring the effective rate down to 3%, sometimes even 0% depending on income origin.

Impact of International Tax Treaties

Mauritius has concluded several bilateral tax treaties in order to:

• Avoid double taxation,
• Limit withholding taxes in the partner country,
• Clarify rules regarding tax residence and allocation of taxing rights for certain income (dividends, interest…).

This can allow investors using a Mauritian SCI to:

• Partially or totally escape taxes levied in their country of residence,
• Or conversely find themselves confronted with “anti-abuse” principles if their structure is deemed artificial.

Common Examples of Tax Pitfalls and Strategies to Avoid Them

Frequent pitfalls:

• Incorrect tax qualification: erroneous assimilation by foreign administration which reclassifies the Mauritian SCI as an opaque structure heavily taxable.
• Absence or poor application of an international tax treaty: real risk if the setup lacks local substance.
• Non-compliance with Mauritian formalities: local declaration defects leading to surcharges or penalties.
• Abusive dividend repatriation without prior analysis: involuntary exposure to foreign mandatory levies not covered by treaty.

Preventive strategies:

• Ensure the company truly holds its effective place of management and main assets located in Mauritius;
• Avoid any purely artificial scheme without proven local activity;
• Implement rigorous monitoring of local declaration obligations;
• Regularly audit cross-border situation to anticipate any international regulatory evolution.

Importance of Consulting a Specialized Tax Expert

Guiding any operation involving a Mauritian SCI with informed tax advice enables:

• Avoiding costly formal errors
• Precisely analyzing each financial flow from an international perspective
• Ensuring full compatibility with all recent legislative developments

An expert mastering both local law and that of partner country/countries durably optimizes your wealth strategy while securing your investments against any subsequent challenge.