Mauritius: Regulatory Sandbox License

Last Updated: 11 January 2017
Article by Javed Niamut and Padmini Bheekharry

Considered as the logical hub for investments in Asia and Africa, Mauritius is now positioning itself as the innovation hub in the Indian Ocean by introducing the Regulatory Sandbox Licence (RSL).The RSL is a product of the Government's vision to promote creativity and innovation through the application of technology and was launched on 20 October 2016 following amendments to the Investment Promotion Act 2000. With the introduction of the RSL, Mauritius put itself on equal footing with countries like the UK, Singapore and Australia, who have applied the concept of RSL.

The purpose of the RSL is to allow companies to invest in innovative projects for which there is no or an inadequate legal framework which is hindering its realization. The RSL will speed up strategic investments in innovative projects in the absence of a formal licensing framework. The implementation of the RSL is multi-fold in intent:

  • It will provide a platform to attract and test innovative projects.
  • It will provide a "safe space" in which businesses can test innovative products, services, business models and delivery mechanisms while ensuring that consumers are protected from potential risks.
  • It will encourage greater competition for consumers' benefit while at the same time acting as a catalyst leading to the emergence of innovative services and products.

Potential uses

The prompt implementation of the RSL can rightly tap into the potential of innovation-driven activities like BlockChain, Digital Currency, Internet of Things, Industry 4.0, high-end health services, Domotics, Fintech and Online Health care which represent a potential multi-billion-dollar global market. Other potential users of the RSL are companies involved in manufacturing, ICT-BPO, Biotech, healthcare and the agricultural sector which have already moved up the value-chain by implementing innovative projects through the leveraging of the latest technologies.

RSL Application

An application for RSL must be made to the Board of Investment (BOI) which is responsible for managing the new scheme. Applications and relevant supporting documents should be submitted electronically to the BOI through its RSL online portal. The BOI will review the application in consultation with stakeholders and assess the risks involved. Projects that are viable and that represent minimum potential for harm will be approved and an RSL will be issued  with a list of safeguards, conditions and recommendations.

Selection Criteria

The selection criteria for RSL would normally vary depending on the project's nature and would neither be exhaustive, mandatory nor exclusive. However, in general cases, to be eligible for an RSL, an applicant must demonstrate the following:

(a) the product, service or solution is genuinely innovative, i.e. it is novel and not similar to those already available in the Mauritian, regional or international market;

(b) the project will contribute to the development of local skills and know-how;

(c) the provision of the new product, service or solution is otherwise:

(i) not allowed due to any prohibition or restriction under existing laws or regulations administered by the country; or

(ii) either wholly or partly incompatible with applicable regulatory requirements currently imposed by the country.

(d) the product, service or solution has clear potential to:

(i) contribute to the development of Mauritian economy;

(ii) bring about enhancement to the Mauritian industrial, commercial and know-how efficiency or risk management and controls; or

(iii)  significantly benefit the Mauritian consumers.

(e) the applicant has conducted an adequate and appropriate assessment to demonstrate the usefulness and functionality of the product, service or solution and understands the associated risks;

(f) the applicant has the necessary resources to participate in Sandbox, mitigate and control potential risks and losses arising from the offering of such product, service or solution;

(g) the applicant's business plan to deploy the product, service or solution on a commercial scale in Mauritius after exit from the Sandbox or to deploy the product, service or solution on a commercial scale for the international market with relevant advantages for Mauritius (sharing of Royalties, setting up of the company's Headquarters in Mauritius);

(h) the adequacy of safeguards, terms and conditions to mitigate major foreseeable risks assessed and mitigated; and

(i) any other criteria that would be deemed necessary to be met by the Board.

Safeguards, Terms & Conditions

The RSL will be accompanied by a number of conditions related to the activity, such as safeguards, terms and conditions that need to be followed, compliance with existing regulations referring to general business operation, monitoring mechanisms, amongst others.

RSL Applicants should beforehand identify the potential risks to consumers and the country's economy that may arise from the testing of the product, service or solution in the Sandbox and propose appropriate safeguards to address the identified risks. Where there are existing legal provisions for such types of activity, the applicant is encouraged to provide the necessary information.

The Board of Investment will on its end assess the proposed safeguards and may implement additional safeguards, terms and conditions as it may deem necessary. In addition to the safeguards, the project should be carried out in accordance with all existing legislative arrangements.

Monitoring and Reporting

The BOI will continuously monitor any business activity in respect of which a RSL that has been issued and ensure that the licensee complies with the conditions of the license. To this end, the BOI may design a monitoring mechanism, in collaboration with other public sector agencies, as it may deem appropriate. In addition,  a holder of RSL must submit regular reports to the BOI.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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