A Mauritius investor can invest in an Indian startup through equity shares, compulsorily convertible preference shares or debentures, or, for DPIIT-recognised startups, convertible notes of at least ₹25 lakh in a single tranche. Pricing must meet FEMA fair value rules, and the startup reports the investment on FIRMS. Angel tax no longer applies from the 2024-25 tax year. Capital gains on exit are taxable in India for shares acquired from 1 April 2017.
- Document route
- Mauritian notary or authority, then apostille
- Time difference
- IST is 1.5 hours ahead (no daylight saving)
- Typical instrument
- CCPS with investor rights
- Reporting
- FC-GPR in 30 days; Form CN for notes
Investing in Indian Startups from Mauritius: how it works
We conduct legal due diligence: corporate records, cap table, ESOPs, IP ownership, contracts, regulatory compliance and FEMA history. We then draft or review the term sheet, shareholders' agreement, subscription agreement and amended articles. FEMA restricts assured returns and certain exit rights, so put options and liquidation preferences must be drafted within the rules. Closing documents are signed in Mauritius, notarised and apostilled where needed.
After the investment arrives, the startup allots instruments within 60 days and files FC-GPR. We monitor investor rights, follow-on rounds and anti-dilution. On exit, transfers are reported on FC-TRS, and the buyer or company withholds tax as required. Watch for the investor's own substance in Mauritius, which affects treaty benefits on dividends and interest.
What clients in Mauritius should know
- Mauritius funds can register with SEBI as foreign venture capital investors for some flexibility in specified sectors.
- The 2016 treaty protocol means capital gains on post-April 2017 investments are taxable in India; model returns on that basis.
- Indirect foreign investment rules apply if the startup invests in other Indian companies, which affects sectoral caps. Startups that later acquire subsidiaries should check this before each deal, because a Mauritius-backed company counts as foreign-owned or foreign-controlled for downstream purposes.
Step by step from Mauritius
Video consultation
A call at a time that suits Mauritius, after we have read your documents.
Documents signed in Mauritius
Mauritian notary or authority, then apostille
Work in India
Our team files, appears and follows up in India, and shares scans of everything filed.
Result and handover
Certified copies and originals are couriered to you in Mauritius where needed.
The full guide
This page covers what changes when you are in Mauritius. For the law, the documents and the step-by-step procedure, read our main page on Investing in Indian Startups, or see all services for clients in Mauritius and the Doing Business in India practice area.
Questions from clients in Mauritius
Can a Mauritius fund use convertible notes?
Yes, for DPIIT-recognised startups, with a minimum of ₹25 lakh in a single tranche.
Is the investment taxed on entry?
No. Angel tax on share premium was abolished from the 2024-25 tax year.
Can we take board seats?
Yes. Investor nominees can be directors, subject to Indian company law. Nominee directors who live in Mauritius obtain a director identification number and digital signature remotely, and can attend board meetings by video.