It is a fact that any financial instrument cannot exist in isolation, neither can any proposed policy with regards to the sector. The recent budgetary measures with regards to the financial sector, actively promoted by the FSPA, represents a new ecosystem for the sector. A much needed one with more substance.
The previous model encompassed mostly, banks, used primarily as parking space for funds, management companies, lawyers and auditing firms. That model gave Mauritius the bad image of a tax haven, wrongly most would say, nevertheless there has been few cases which spoilt the basket of eggs.
What makes the new eco system better than the previous one? The new licenses or umbrella licenses, such as Overseas Family Corps, and Investment Banking license is far reaching and intertwined within the whole sector. The capital raising possibility of the investment banks, allows for increased activity on the secondary market, represented by the stock exchange. Even intermediation will have a more prominent role in investment and capital structuring. For example, syndicating loans to limit exposure to capital intensive projects.
The Mauritius derivatives and Commodities Exchange will give a boost to the trading of high value commodities. Stock gold may be sold as asset back securities. Which will bring another investment class on the market.
The family offices may be the source that Mauritius lacks for financing mega projects in Africa. It also provides an efficient way for the family offices to diversify their portfolio and mitigates risks, by using as investment arm, and investment bank.
And of course what would a jurisdiction be without a sound legal system. In that particular aspect, the MIfc is also attracting international law firms. All this together with the Mauritius international arbitration center tagged with the London one, definitely gives the required comfort.
All these pulled together does one thing which is of critical importance for the MIFC, the issue or credibility. These activities increase substantially the activities carried out in Mauritius. enhancing the substance of the Mauritian jurisdiction.
The FSPA certainly will see to it that with a more substance based jurisdiction, the MFIC is no longer tagged as a tax haven.
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