Strategically located in the Indian Ocean at the crossroad of international investments, Mauritius has throughout the last decade forged a strong reputation as a premier international financial centre. The Mauritian authorities have been extremely prudent in adopting world class law and regulations with a touch of innovation and this has resulted in a financial services industry that has quickly matured and embraced the highest standards of international practice. Additionally, the centre benefits from low taxation, an extensive tax treaty network, market access, innovative financial products and a pool of skilled professionals. It is not surprising therefore why Financial Services is the sector which has enjoyed the highest growth rate over the last years and currently is the main pillar of the Mauritian economy contributing around 11% to the gross domestic product (GDP).
The Global Business Platform
The Mauritius International Financial centre offers quality services through its modern and innovative legal framework. As a global business platform, Mauritius offers investors with a diverse product base for planning and optimization of benefits. GBC Companies benefit from a low to nil taxation. GBC's can be organised as protected cell companies (PCC), private trust companies (PTC), trusts and sociétés (partnerships) amongst others. An entity holding GBC category 1 licence can benefit from the 33 Double Tax Avoidance Treaties (DTA) that Mauritius has ratified with other countries. There are presently around 33,000 entities engaged in Global Business in Mauritius and 460 funds licenced by the Financial Services Commission with a net asset value of US$ 35.86 Billion (as at December 2006).
Provision Of Financial Services
There is enormous potential of growth for investors wishing to establish a presence in Mauritius to provide banking, securities, insurance or fiduciary services. The business architecture of Mauritius has been thoroughly redesigned to offer investors a hassle free business environment to start and operate an economic activity. The corporate tax rate for business operating in the domestic sector is now at the attractive rate of 15%. Since 1st of October 2006 foreigners can obtain within three working days an occupation permit to work and reside in Mauritius.
The success of Mauritius as a centre for the provision of financial services depends upon the maintenance of its reputation of probity. Mauritius prides itself in having a robust regulatory framework within a business friendly environment. Mauritius fully supports international initiatives (FATF, Basel, IOSCO, IAIS) aimed at preventing the jurisdiction from being used for money laundering and terrorist financing. It is worth noting that Mauritius has never been blacklisted. The two regulators for the Financial Services Sector, namely the Bank of Mauritius and the Financial Services Commission are dedicated to the supervision of the bank and non-bank financial services sector.
Other Salient Features
Mauritius is a worldwide reference for political stability. Its constitution is modeled on the British parliamentary system with the highest court of appeal being the Privy Council of the United Kingdom. Mauritius offers a diligent, educated, multilingual and experienced professional labour force. The literacy rate is currently at 86%. Mauritius benefits from a low cost of operations and offers a series of attractive fiscal incentives such as no tax on dividends, no withholding tax on interest, royalties and dividends, no estate duty, inheritance, wealth or gift taxes, no stamp duties, registration duties and levies.
It is accepted that in this era of global competition, Mauritius needs to constantly innovate and sophisticate to keep at pace and maintain its competitive edge. As thus the government has recently come up with a set of new legislations and regulations to expand the scope and depth of services that may be offered:
- A new Financial Services Act has been enacted which aims at streamlining and consolidating the whole licensing framework for various non-bank financial institutions and financial service providers. The new Framework sets in a new conceptual approach to global business and provides that global business entities may conduct any financial or non-financial service activity, provided that the ultimate purpose of the business is to provide service outside of Mauritius.
- A new Securities framework is being implemented which is intended to broaden and deepen the securities industry in Mauritius. It hinges on a modern approach and provides a comprehensive regulatory framework covering a wide spectrum of the securities industry in Mauritius. The Securities Act contains many innovative provisions designed at enhancing the regulatory standards of our securities' market in line with international best practice and standards, in particular with the objectives and principles of the International Organisation of Securities Commissions (IOSCO).
- Concurrently, a new Insurance Act aiming at improving the soundness of the insurance market in Mauritius by enhancing the regulatory and supervisory framework for the insurance industry and providing greater protection to policyholders and other beneficiaries has been instituted. The Act provides for the application of the International Association of Insurance Supervisors' (IAIS) standards and principles and focuses on specific regulatory issues relating to capital adequacy, solvency, corporate governance, early warning systems and the protection of policyholders.
- Government has recently announced that further legislation would be forthcoming to introduce more innovative products within the Financial Services Landscape. Accordingly, the appropriate banking legislation will be amended to allow for the development of Alternative Financial Services such as Islamic Financial Services which is a fast growing new activity with big export potential. Legislation will also be introduced to allow the setting up of private foundations and Real Estate Investment Trusts (REITs). The legal profession is also being liberalized to allow foreign law firms to set-up in Mauritius.
Initiatives on the regulatory front, coupled with the measures and policies implemented by the government and continued innovation have contributed in making Mauritius a financial platform that cannot be overlooked by investors. The country provides exciting opportunities to do business in a friendly and safe environment and should certainly be considered by entrepreneurs looking at doing business in the Mauritius International Financial Centre. Facilitation assistance can be sought from the Board of Investment, Mauritius by visiting our website on www.investmauritius.com.
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.