I’ve been thinking about how small countries should approach AI regulation. Mauritius stands at a fork: one path copies heavy frameworks from larger powers like the EU, the other builds something lean, deliberate, and designed for speed. The second path is harder to see at first because it requires saying no to things that sound responsible. But saying no early is often the most responsible thing you can do.

Most regulations aren’t born from pure altruism; they’re often the handiwork of incumbents protecting their turf. Economists call it regulatory capture. Think of it as the established players writing the rules of the game to ensure no one else can play. An extreme case? Look at OpenAI. They lobbied hard for the EU’s framework, which conveniently raises barriers so high that new competitors might never clear them. Countries that import these laws are essentially swallowing a poison pill, dooming their own ecosystems before they even sprout.

One of the most unspoken belief could be that Mauritius might never produce serious deep-tech companies of its own. If that’s the view from the top—that the island is fated to stay a consumer, importer, and adopter of technology rather than a creator—then borrowing heavy rules from the EU or UK makes a kind of lazy sense. It’s low-effort governance: import the package, check the alignment box, and move on.

Now imagine a ship loaded with $2.5 Billion to $10 Billion in cash, sailing towards Mauritius, that is the minimum gains Mauritius can have from the trillions of value created by AI. The moment Mauritius enacts a regulation with is “inspired” by EU and UK laws,  this ship will turn around and sail away.

Small countries absolutely can build deep-tech powerhouses. Look at Israel in 2025. Despite a population smaller than many major cities and years of geopolitical turbulence, its deep-tech sector—including AI, cybersecurity, and related fields—has produced 39 companies with revenues over $100 million, many with valuations far higher. That’s not accident or luck; it’s the result of deliberate, principled choices. Israel didn’t chase the comprehensive, precautionary model of the EU AI Act. They chose flexibility first, always.

Think of good regulation like a seatbelt, not a straightjacket. A seatbelt lets you drive fast and far while protecting against real crashes. A straightjacket stops you from driving at all. Israel’s approach captures exactly that balance. No sweeping, one-size-fits-all mandates. Instead:

  • Voluntary guidelines on AI ethics that encourage responsibility without locking everyone into rigid compliance.
  • Risk-based recommendations that focus on actual, evidence-based dangers rather than hypothetical worst-case fears.
  • Sector-specific oversight: stricter guardrails in high-stakes areas like health, defense, or finance, much looser where experimentation needs space to breathe.

The Israeli mindset is straightforward and hard-nosed: overregulate too early, and you kill your competitive advantage before it has a chance to form. They’re not against rules; they’re against stupidity disguised as caution. Why tie your own hands when the field is still wide open and the winners will be the ones who move intelligently, not the ones who move first or loudest?

The temptation to import the EU AI Act or similar is understandable. It feels safe, aligned, modern. Yet most comprehensive laws drafted today are shaped by incumbents who want barriers high enough that new competitors can’t climb them. Regulatory capture isn’t a conspiracy; it’s physics. When you copy those laws wholesale, you’re not just borrowing rules—you’re borrowing someone else’s capture, and handing your own future builders the same handcuffs.

Small places like Mauritius can do better. Israel shows the proof: no broad AI Act, no blanket prohibitions, just voluntary ethical guidelines, risk-based recommendations, and sector-specific oversight. The core idea is simple: overregulate early and you kill the advantage before it forms. Mauritius, with its 2025-2026 push toward an “Intelligent Island,” has the momentum to choose differently. Not by ignoring risks, but by sequencing laws intelligently—focusing first on what unlocks value, then layering protection as patterns emerge.

Here are the laws worth enacting now, the ones with high ROI and low regret:

  1. AI Neutrality & Interoperability Act Make this foundational. Mauritius declares neutrality: it recognizes multiple international standards (EU, US, ISO, OECD) without forcing any single one. No geopolitical side-picking. Explicit commitment to compatibility over ideological purity. This one sentence “You don’t have to choose sides to build here” is the strongest signal you can send. Think Switzerland with banking: lawful money from anywhere is welcome. In AI, that neutrality becomes a magnet.
  2. AI Sandbox & Safe Harbor Act Innovation needs room to fail safely. Create controlled sandboxes with temporary legal safe harbor—no punitive enforcement during experiments. Set clear boundaries (scale, time, sector) and require reporting only on observed harms, never hypotheticals. Metaphor: you don’t ban airplanes because some crash; you build test ranges, flight data recorders, and learn fast.
  3. AI Assurance, Audit & Certification Act Turn trust into an export. Offer voluntary assurance grades, clear audit scopes (data practices, model risks, monitoring, incident response), and recurring certifications. This creates recurring revenue, high-skill jobs, and positions Mauritius as a compliance shortcut for global enterprises. Nobody pays for vague “ethical vibes”—they pay for certificates that unblock billion-dollar deals.
  4. Algorithmic Accountability (Scale-Based) Act Obligations kick in only at real scale: defined thresholds for users, revenue, or systemic risk. Require logs, monitoring, escalation—after the company has traction. Prototypes and early systems stay free. Analogy: bicycles don’t need truck-level safety inspections. The EU mistake was regulating toddlers like giant trucks.
  5. Compute, Data & AI Infrastructure Facilitation Act AI is physics as much as code. Clear import rules for hardware, straightforward data residency (required only when truly necessary), fast-track approvals for compliant compute, legal certainty for cross-border flows under safeguards. Friction at the physical layer collapses everything else. Remove it early.

What to delay until real deployments exist:

  • Broad AI liability laws. Real failure patterns aren’t visible yet; early rules will be wrong and will scare builders. Use contracts, insurance, and sandbox disclosures instead. Codify later when evidence arrives.
  • Mandatory explainability for everything. Not all models can be explained without crippling performance. Require it where it materially affects rights; leave the rest flexible.

What to explicitly never enact:

  • Blanket “high-risk” prohibitions. Vague categories freeze innovation preemptively. Ban harmful behaviors, not technologies.
  • Feature-based bans (facial recognition, generative models, autonomous decisions outright). Features are neutral; use cases define harm.
  • Pre-approval for all systems. Bureaucratic choke points favor incumbents and lawyers, not startups.

Order matters more than content. Get the sequence wrong and you end up with liability first, then bans, committees, white papers, and eventual irrelevance. Correct order:

  1. Neutrality
  2. Sandbox
  3. Assurance
  4. Scale-based accountability
  5. Liability refinement (much later)

Regulate AI like aviation: test early in safe environments, certify rigorously where it counts, enforce seriously at scale, and never ban the sky.

Copying EU / UK laws would be  like tailgating a sports car that’s barreling toward a cliff. The EU’s AI Act, for all its good intentions, risks becoming a blueprint for self-sabotage. Copy it, and you’re volunteering for the same crash.

Mauritius has the chance to be the place where builders go because the rules make sense—not because they’re copied one of the biggest blunders of EU, but because they’re thoughtful. In tech, especially AI, the countries that win aren’t the ones that regulate first or loudest. They’re the ones that regulate smartest. This is the moment to do it right. Let that ship with billions sail into the harbours of Mauritius, do not turn it away.