How should a foreigner check a Mauritius business purchase?

This is not legal advice. This guide is general legal information for Mauritius and does not replace a consultation with a lawyer who has the full context of your case.

A foreign buyer should test what is being sold, who owns it and which obligations will remain after completion. In Mauritius, that means checking the company file, the seller’s authority, contracts, staff, licences, land rights, secured debt and tax history. The written sale agreement should then allocate each risk that the investigation uncovers.

Decide whether the deal buys shares or selected business assets

A share purchase changes the owner of the company. The company normally keeps its contracts, employees, property and liabilities, subject to change-of-control clauses and regulatory rules. Its earlier conduct remains relevant. That makes historic records central to share purchase due diligence in Mauritius.

An asset purchase instead identifies what passes to the buyer. Stock, equipment, intellectual property, customer contracts and a lease may each need a different transfer step. Liabilities do not disappear merely because the agreement calls the deal an asset sale. Employee rights, secured claims and obligations attached to particular property must be examined on their own terms. The choice also affects the buyer’s review of any cross-border joint venture structure planned after completion.

Corporate records that establish ownership and authority to sell

The Corporate and Business Registration Department keeps the company register under the Companies Act 2001 and the Business Registration Act 2002. Obtain the certificate of incorporation, constitution, current directors and shareholder information, filed returns and available financial statements. Compare them with the seller’s share certificates, register of members, beneficial ownership information and board minutes. A registry extract is a starting point, not proof of every private arrangement.

Authority matters twice. The person negotiating must be authorised, and the company or shareholder must approve the final sale in the required manner. Review any shareholders’ agreement for pre-emption rights, consent rights or transfer restrictions. In practice, the difficult point is often a gap between the public filing and the company’s own registers. That gap should be resolved before money moves.

Contracts, employees, licences and disputes that may follow the business

Read the contracts that produce revenue or keep the business operating. A customer, supplier, franchise, finance or software agreement may allow termination after a control change or prohibit assignment. Ask for all variations and side letters. A summary prepared by the seller cannot show a clause it omits.

For employees, reconcile the payroll with employment agreements, accrued entitlements, disciplinary files and pending claims. The Workers’ Rights Act 2019 may affect the employment consequences, but the answer depends on the structure and facts. Licences need their own schedule naming the issuing authority, holder, activity, location and any control-change condition. Search threatened and current disputes, not only judgments already given.

Checking land, leases, security interests and major equipment

Occupation is not ownership. If the business uses premises, obtain the title or full lease, amendments, renewal terms, rent record and landlord consents. A buyer relying on the seller’s land should read the Mauritius property purchase guide before treating a site visit as title diligence.

The Non-Citizens (Property Restriction) Act can matter where a foreign buyer acquires property or shares in a company holding immovable property. The official application route depends on the transaction. Confirm it before signing an unconditional deal. Major equipment should be matched to invoices, serial numbers and physical inspection. Search for charges and other security, and require an agreed release mechanism where the sale depends on clear title.

Accounts and tax records need legal questions as well as financial review

Accounts show figures. They do not, without the underlying documents, show who bears a disputed tax assessment, whether a customer can demand a refund or why a related company received an unusual payment. Reconcile management accounts with filed statements, bank records, invoices and material contracts. Ask the accountant to identify assumptions rather than merely recalculate totals.

The Mauritius Revenue Authority provides company filing services, but a buyer still needs access to returns, assessments, objections and payment evidence supplied through the transaction. Tax warranties are not a substitute for review. Nor does a clean recent year settle earlier periods. The legal question is who carries an identified or hidden liability after completion, and how the agreement secures that promise.

EDB and sector approvals that may affect a foreign buyer

The Economic Development Board facilitates investment and administers specified investor processes. It does not replace the authority responsible for a sector licence. A hotel, clinic, business licensed under the Financial Services Act 2007, school or regulated trade may therefore involve a separate decision-maker. Ask each authority whether a share transfer, new controller, changed premises or asset transfer requires consent, notification or a fresh application.

Do not rely on the seller’s statement that a licence “comes with the business”. Obtain the instrument and the latest correspondence from its issuer. Check the holder’s exact name and any conditions. Foreign ownership, residence or work permission may create a separate issue for the buyer’s managers. The expat legal matters hub explains why commercial ownership and personal permission to work should not be confused.

Warranties, indemnities and price retention for risks found in diligence

A warranty states an agreed fact and gives a contractual remedy if it proves false. An indemnity can allocate a defined loss, such as an identified tax dispute or employee claim. The drafting must address knowledge qualifications, disclosure, time limits, financial caps and the method for making a claim. Labels alone achieve little.

Some findings justify a condition before completion. Others may support a price adjustment, escrow or retention, if the parties and payment arrangements allow it. The protection must match the risk. For example, an unsigned lease renewal may call for landlord consent rather than a broad promise about all contracts. Advice on professional roles during signing is available in the guide to barristers, attorneys and notaries in Mauritius.

From findings report to signing and completion

The findings report should separate defects, missing evidence and commercial choices. It should say which matter blocks signing, which can be cured before completion and which the buyer accepts through the price. The point most often missed is the handover between diligence and drafting. A risk identified in a report remains with the buyer unless the agreement deals with it.

Completion documents may include resolutions, share transfers, asset assignments, consents, releases, resignations, licence evidence and updated registers. Record who must deliver each item and what happens if it is absent. For a buyer whose ownership and estate planning cross borders, the separate guide to expat wills and succession in Mauritius explains why the new interest should also be placed within the wider personal plan.

This is not legal advice. This guide is general legal information for Mauritius and does not replace a consultation with a lawyer who has the full context of your case.