Crypto Regulation in Mauritius
Mauritius is one of the first countries in the Eastern and Southern African region which has taken steps to adopt a comprehensive legislation on virtual assets (VAs) and Initial Token Offerings (ITOs). Virtual assets have dominated the FinTech space in recent years and it was estimated that the cryptocurrency global market rose to an all-time high, reaching an all-time high at $3 Trillion Market Cap. With so many growth opportunities, Mauritius became keen to rein in the benefits of the new and developing business activities of Vas and ITOs to becoming one of the leading regional FinTech hub for Africa.
Source: Desfran
Although Mauritius considers virtual currencies an asset class for investments, they are not classified as legal tender in Mauritius.
Virtual asset service providers can obtain a license from the Financial Service Commission (FSC). In addition, Security Token Offerings (STOs) have a depicted framework to follow.
Source: Bitcoinke
In 2018, two new licensable activities were introduced:
- The Custodian Services (Digital Asset) Licence; and
- The Digital Asset Marketplace Licence
The introduction of licences in Mauritius for digital assets custodian services and a digital asset marketplace could be beneficial for a variety of international blockchain companies looking for a robust jurisdiction from which to operate.
Subsequently, the FSC has issued guidance notes on both the recognition of digital assets, including cryptocurrencies, for investment by sophisticated and expert investors and, more recently, a guidance note on Securities Token Offerings (STOs).
Source: Maitland
The Financial Services Commission (FSC) of the Republic of Mauritius has released a draft regulatory framework for crypto custodian services, according to an official document posted on Nov. 5.
According to the announcement, the island country aims to establish regulation for custodian services for digital assets in order to enable users of crypto custodian services to have a due level of safety.
According to the draft regulation, the FSC will issue a custodian service license that will allow an entity to operate as a holder of digital assets as well as to function as safe keeper of the assets. In order to acquire the license, the holder will be required to comply with anti-money-laundering (AML) and counter-terrorism-financing (CFT) laws, as well as the country’s Financial Intelligence and Anti-Money Laundering Act of 2002 (FIAMLA).
Source: Coin Telegraph
Mauritius has set up non-binding guidelines concerning licensing and money laundering with regards to bitcoin transactions. However, nothing has been done yet concerning the taxation of bitcoin transactions. Basically, Mauritius has not set up any specific provisions or guidelines dealing with the use of virtual money. Also, the Mauritius Revenue Authority (MRA) has not issued any rulings concerning the implications of tax on bitcoin transactions. In this context, it becomes imperative to assess the underlying nature of bitcoin transactions to deduce whether they form part of taxable gross income. In fact, the Income Tax Act 1995 (ITA) imposes a tax on income derived in Mauritius, whether the person is resident in Mauritius or elsewhere. The tax system of Mauritius is regulated by the same ITA and is monitored by the MRA. A tax rate of either 10% or 15% on chargeable income is levied, depending on the amount of taxable income that a person derives during an income year. Accordingly, Section 10(1) of the ITA 1995 defines gross income as: (a) Any advantage in money or in money’s worth… (b) Any gross income derived from any business… (c) Any other income derived from any other source (Emphasis Added).
Source: Ijlhss
The Virtual Asset & Initial Token Offering Services Act 2021 was passed into law by the National Assembly on 10 December and will come into force when Presidential assent is received. The draft legislation was opened for industry consultation with final inputs submitted by 23 July and approved by the Cabinet at its meeting on 26 November.
The object of the Act is to provide a comprehensive legislative framework to regulate the new and developing business activities of virtual assets and initial token offerings. This framework is required to meet international Financial Action Task Force standards in respect of provisions for managing, mitigating and preventing any anti-money laundering and countering the financing of terrorism (AML/CFT) risks associated with these emerging business practices.
Source: Mondaq
Not available
Not available
The financial regulator of Mauritius has issued a fresh warning to investors, highlighting concerns over two alleged crypto Ponzi schemes operating in the country. The Financial Services Commission, Mauritius’ chief financial regulator, issued the investor alert over schemes being advertised on social media.
In particular, the regulator flagged two digital assets, “Cloud Token Mauritius” and “Cloud Token Indian Ocean and Africa” in the note urging investors to beware of the risks of losing money in these schemes.
Source: Coin Geek
As far as Mauritius is concerned, the Bank of Mauritius has so far been very cautious in its approach to cryptocurrencies, they issued a warning on the 18 December 2013, advising members of the public to exercise utmost care and diligence when dealing with virtual currencies, and further explaining that members of the public need to be aware of the risks associated with unregulated virtual currencies, which do not provide the same protection as ‘hard’ or ‘real’ money.
However, as may be the case worldwide, opinions differ regarding cryptocurrencies and blockchain technologies. Whilst the Bank of Mauritius has so far maintained its stand regarding cryptocurrencies with the former Governor, Ramesh Basant Roi, reiterating in November 20173 that one must be prudent when dealing with virtual currencies, the Board of Investment in Mauritius has adopted a more open approach to this sector by launching its new Regulatory Sandbox License in 2017.
Source: Mondaq
Mauritius has encouraged innovation by creating a Regulatory Sandbox and license, published in 2017. Regulators have worked alongside innovators to understand how new-age technologies could be integrated into industries and encourage financial inclusion.
As a result, cryptocurrencies and blockchain technologies have begun to foster themselves within the global financial hub of Mauritius.
Source: Bitcoinke
The Regulatory Sandbox License4, announced in the 2016-2017 National Budget in Mauritius and proclaimed on the 20 October 2016, offers the possibility for an investor to conduct a business activity for which there exists no legal framework, or adequate provisions under existing legislation in Mauritius. The Regulatory Sandbox License will be issued by the Board of Investment (now part of the Economic Development Board) to eligible companies willing to invest in innovative projects according to an agreed set of terms and conditions for a defined period. To date, a number of licenses have already been issued.
Source: Mondaq
