Mauritius has been dubbed by its Economic Development Board (EDB) as the preferred jurisdiction for Africa by virtue of its unique blueprint consisting of strategic location, stable Government, highly skilled workforce, business-friendly environment and modern infrastructure which make it an ideal forum for business in the African region. Mauritius is ranked 1st in Africa by the World Bank in its Ease of Doing Business rankings of 2020, as well as 13th in the World, as a result of its conducive tax landscape and pro-business legal and regulatory framework.
The legal system of Mauritius is well established and has its composite roots in the French Napoleon Code (civil law) and the British legal framework (common law). It is a blend of the French and British laws coupled with the law of evidence, which is based on the UK adversarial system, thus offering the right combination of rules for a swift and secure dispense of justice.
What can Nigerian investors gain from investing in and through Mauritius?
In 2021, The Republic of Mauritius and the Republic of Nigeria signed Double Taxation Avoidance Agreement (DTAA). The DTAA gives further spur to the positive evolution of economic ties between the two countries by providing greater tax certainty for businessmen while making clear the taxing rights of Mauritius and Nigeria on all forms of income arising from cross-border economic activities. Indeed, with the signature of this DTAA, followed by the removal of the country from Financial Action Task Force (FATF) list and the EU list of high-risk third countries, Mauritius can more than ever guarantee predictability, certainty and security in doing business.
An entity in Nigeria seeking to invest in other countries within the continent would certainly benefit from using the Mauritian International Financial Centre (IFC) as a gateway. Through Mauritius, they would benefit from a Free-Trade Agreement (FTA) with India, an FTA with China, and a continental FTA with Africa. Mauritius is a member of the Southern African Development Community and the Common Market for Eastern and Southern Africa and also boasts 23 investment promotion and protection agreements with African states and have set special economic zones with countries including Senegal and Côte d'Ivoire.
Our previous publication on Mauritius ties within Africa can be consulted here.
Another appealing way for Nigerian investors and high net worth individuals (HNWIs) to benefit from the advantages and high comfort level provided by the robust Mauritius IFC is by setting up an offshore trust amidst growing concern for proper and tax-efficient wealth protection and estate planning. Indeed, an offshore trust can help preserve wealth while offering greater flexibility over the management and distribution of assets. Further, when coupled with a Global Business Company registered in Mauritius and having an offshore trust as shareholder, an investor can carry out pan-African business knowing that all revenue and profits are safe within the trust and can be distributed without the constraints of exchange control, availability of finance and incidence of taxation in his/her country of origin.
More information and insight on the setting up of an offshore trust in Mauritius can be consulted on our website here.
One of the main factors that encourage foreign investment to Mauritius is its harmonized tax system. A flat rate of 15% is applied across income tax, corporate tax and VAT. As a quick comparison, corporate tax ranges from 20% for medium companies to 30% for large companies in Nigeria. Moreover, there is no withholding tax on dividends paid by a Mauritian resident company and there is no capital gains tax and no inheritance tax in Mauritius whilst capital gains tax is levied at a rate of 10% in Nigeria.
Also, Mauritius offers foreign investors a safe and welcoming place for residency. The Economic Development Board (EDB) offers a host of qualifying schemes for investors to invest and live in Mauritius while enjoying the country's peaceful, safe and beautiful environment. Luxury island homes are a viable target and the acquisition of same may, subject to satisfying the EDB's requirements, qualify the investor and their immediate family to a permanent residence permit. The north of the island is particularly attractive and already boasts a sizable community of African expatriates who have taken advantage of the EDB's real estate development schemes.
The most recent and without doubt one of the most attractive qualifying schemes offered by the EDB is the Smart City scheme which revolves around the work, life & play concept and incorporates mixed use developments in cosmopolitan conurbations with smart technology and pioneering innovation at their core. Foreign investors may acquire built-up residential properties comprising villas, houses, townhouses, apartments and duplexes and qualify for residency.
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.