In February 2023, to some muted fanfare, Mauritius became the 114th member country of the Madrid Protocol. So, what does it mean, and should we rethink Mauritius to hold IP?
Well, the Madrid Protocol is the primary international system for registering trademarks in several countries using a single application that businesses can file with the World Intellectual Property Organisation (“WIPO”). The WIPO is, of course, the global forum for intellectual property (IP) services, policy, information and cooperation and their mission is to lead the development of a balanced and effective international IP system that enables innovation and creativity for the benefit of all. Therefore, Mauritius joining the Madrid Protocol is a significant development.
So basically, the Protocol provides a simple and cost-effective solution for registering and managing trademarks worldwide. This Protocol is bringing the world closer together with respect to trade opportunities and in the expansion of IP-related co-operation between countries. So, good news for Mauritius to have become a member of the Madrid Protocol.
What does this mean for Mauritius?
The main benefits of being a member are:
- Businesses registered in Mauritius will be able to obtain protection of their trademarks in the other 129 member states. So, imagine the far-reaching scale of this system and the opportunities it offers.
- This should encourage big brand owners in Mauritius to expand their business and take their brands to other member countries without the hassle of going through country-specific trademark registration process.
- Looking out for the little guys too – small businesses in Mauritius can also seek protection of their trademarks in the member countries and benefit from the simple registration process the Madrid Protocol has to offer.
Basically, being part of the Madrid Protocol provides a One-Stop Shop for your IP registration and management. Bottom line, it offers cost savings opportunities and reduces the administrative burden. Sounds nifty. So, what about the broader legislative and tax framework in Mauritius, is that also attractive? Let’s unpack…
The IP tax and legal framework in Mauritius
So, what is the legislative framework covering the protection of copyrights, trademarks and patents in Mauritius anyway? Well, IP law is basically governed by:
- The Copyright Act 2014;
- The Patent, Industrial Designs and Trademarks Act 2002; and
- The Protection Against Unfair Practices, Industrial Property Rights Act 2002.
And in terms of tax incentives for IP business in Mauritius, there’s pretty good news, in particular tax holidays and enhanced R&D allowances.
Firstly, there’s a great tax holiday if you create IP assets in Mauritius! You can get eight-year tax exemption is available in two ways:
- Income of a company set up on or after 01 July 2017 and involved in innovation-driven activities for IP assets developed in Mauritius; or
- Income derived by a company from IP assets developed in Mauritius on or after 10 June 2019.
Of course, as with any tax holiday there are some Ts & Cs; the main one being that the exemption is available only to a company which carries out the research and development leading to the creation of the patent, copyrighted software, or other intellectual property in Mauritius, so no out-sourcing is allowed.
Secondly, a Mauritian company can claim twice the amount of expenditure incurred on the following as a deduction (i.e. a 200% tax deduction):
- Acquisition of patents and franchises; and
- Costs to comply with international quality standards and norms.
If the company claims the above deduction, it cannot also claim annual allowance in respect of those patents and franchises, but it’s still a pretty sweet outcome.
Should I consider Mauritius for my IP?
Definitely worth considering and it’ll be interesting to see how the Madrid Protocol will take effect in practice. For more information on the nuts and bolts of the Madrid Protocol and the tax incentives available contact us today
About the author:
Today’s article was written by Jayesh Ramloll. Jayesh is in our Mauritius office and specialises in Mauritian domestic and international tax and can be contacted via email at firstname.lastname@example.org