On 26 September we were delighted to welcome members of the France-Mauritius Chamber of Commerce and Industry (CCIFM) to our Mauritius office as we hosted a panel discussion on the theme: "Finance Act 2019: impact on investors and entrepreneurs".
Focussing on the impact of the Finance Act 2019 (FA 2019) on the Mauritius business landscape, the discussion aimed to address areas of concern highlighted by an audience of mostly French investors and entrepreneurs operating in Mauritius.
Central to the discussions was the role Mauritius would continue to play as a facilitator of investments into Africa given the pressure to align with international tax practices. The FA 2019 has introduced a partial exemption regime similar to that existing in many other developed countries. However, as Richard Arlove highlighted, the jurisdiction should now be thinking "beyond tax" as investors look to find a complete ecosystem in Mauritius that gives them the certainty they need to invest in Africa and other emerging markets. It is therefore crucial, he added, "rather than doing business through Mauritius, our financial centre should be geared for business from Mauritius". This view was echoed by Afsar Ebrahim who highlighted the role of Mauritius in providing comfort to Development Finance Institutions (DFIs) to invest in impact funds across Africa, "The confidence we have carved over the years as a financial centre focussed on Africa is epitomised by the presence of DFIs in our jurisdiction," he commented.
The future of collaboration with Africa is most likely to materialise in a greater number of bilateral economic and partnership agreements, with a more comprehensive agenda than what a tax treaty alone would permit. While all the speakers agreed to this, for Azeem Salehmohamed, the African Continental Free Trade Area "will open doors for new opportunities amidst a larger space of collaboration" among countries that already share the same geographical proximity.
Guests were also keen to seek the views of the panellists on the direction the Mauritian economy is taking. According to Mr. Salehmohamed, Foreign Direct Investment (FDI) into Mauritius can be leveraged further with a proper strategy targeting large regional corporations in sectors where Mauritius has a competitive advantage. For Richard, assets under administration of global business companies registered in Mauritius are equivalent to 50 times the country's GDP. "This gives the measure of the potential there is for the integration of the global business sector with the domestic economy. In our national strategy, we must look at offering more than just investment facilitation services to these companies," he added.
The common sentiment that emerged is that the FA 2019 reinforces the positioning of Mauritius as a well-regulated and OECD-compliant financial centre that fulfils an essential role vis-à-vis Africa. To this, the speakers argued, one should add the moral comfort that investors find in a jurisdiction deeply rooted in good governance.
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