Mauritius: Offshore Opportunities in 2012
By Graham Sheward
Posted: 7th November 2012 09:02
What factors are attracting companies and wealthy individuals to the Mauritius?
Mauritius is internationally recognised for its continuity of government and rule of law. The island has enjoyed enduring political stability ever since gaining independence in 1968 with a democratically-elected government every five years.
On the human front, Mauritius has the highest adult literacy rate for the whole of Africa, mainly as a result of free education at primary and secondary school level. This highly disciplined and educated workforce is also equally fluent in English and French, while many also speak a third international language. The workforce is young, 29.2% being aged less than 30 and business-spirited, innovative and open to the world. Mauritius has a talented pool of multidisciplinary professionals trained locally and in the best universities around the world.
With the right policies at the right time in its economic history, Mauritius is nowadays categorised as an upper-middle income country with a per capita income of USD 7,500. Over the last four decades, the island has recorded a healthy and sustained average GDP growth rate of 5%.
The business environment and the investment climate in Mauritius are constantly being enhanced with a view to strengthen the image of Mauritius as an attractive investment destination. The sound economic policy and good governance have made Mauritius the most business friendly destination in Africa. According to the latest World Bank Doing Business Survey, Mauritius is the No.1 in Africa and 23rd globally in terms of ease of doing business. Canadian Fraser Institute also ranked Mauritius 1st in Africa and 9th worldwide on its chart of economic freedom.
One salient feature of the business-friendly strategy is the fact that a foreign investor can settle hassle-free in Mauritius and be operational in just three days. Over and above being a country devoid of any exchange control and where export-oriented operators enjoy duty-free privilege for inputs and equipment, Mauritius also has one of the world's most generous tax regimes, with personal and corporate tax harmonised at a low 15% and tax-free dividends.
The legislation governing global business has been elaborated to optimally allow management of funds outside of the European Union. The country also boasts an impressive number of double taxation agreements (“DTAs”) with a wide range of countries together with investment promotion and protection agreements (“IPPAs”) with key regional and international economies. Mauritius currently has double taxation agreements with 39 countries including India with whom Mauritius has a long-standing special relationship, and more than a dozen African countries. A number of other double taxation agreements are in progress.
Mauritius is also a privileged member of key African and regional organisations, including the African union (AU), the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC).
What about living in Mauritius?
Mauritius is a safe and very affordable place to live either as a national or an expatriate single professional, family or retiree. Over the island, several competitively priced luxury apartments, fully furnished villas and beach front residences are available for rent. A few international property agents have appointed representative agencies locally. Foreign nationals, investors and non-investors alike, may also buy freehold property in Mauritius under the provisions of two specially studied schemes, the "Integrated Resort Scheme" and the "Real Estate Scheme". Non-nationals holding a Permanent Residence status enjoy the rights to acquire property as native Mauritians.
Several public and private hospitals and clinics and specialised health centres offering world-class service can be found around the island. Mauritius is one of few countries around the world to offer free-of-charge health services in government hospitals, dispensaries and specialised clinics around the country. Health insurance policies are also available from several local and international service providers.
On the front of education, several schools of international standard, both public and private, deliver the Cambridge University A-levels, the French Baccalaureate and the International Baccalaureate. Several tertiary education providers can also be found, offering internally recognised degrees, post-graduate and professional qualifications at extremely competitive fees. Crime prevalence is very low making Mauritius one of the safest law-abiding countries of the world.
In reference to your area of expertise, how do local laws in your jurisdiction differ with those of other offshore financial centres?
Mauritius has a recognised hybrid commercial law that combines English common law and the French code Napoléon. The legal framework caters, amongst others, for the following:
• IRS scheme allowing foreigners to acquire property in Mauritius
• Statutory protection of confidentiality via banking secrecy provisions – disclosure only by direction from the Supreme Court and tax authorities
• IPPAs provide a list of guarantees to investors
• Mandatory reporting of yearly management accounts to the Financial Services Commission of Mauritius.
What gives you an advantage over local and global competitors in your areas of expertise?
One of the landmark events of the Mauritian offshore sector is that Barclays was the first financial institution to launch global business operations in 1990. Over two decades later, Barclays Bank PLC - Mauritius remains a leading player on the global business front thanks to the expertise and business capabilities it boasts locally and internationally.
Leveraging the global presence of Barclays through operations in 50 countries across 27 markets and building upon an extensive network in Africa, Barclays Mauritius International Banking is able to provide a complete range of sophisticated services and products that span cash management, deposits, treasury, trade and lending to meet the needs of the most exacting and sophisticated customers and clients.
Our capacity to offer the best services and products on the market is further enhanced by Barclays being the major shareholder of Absa, one of South Africa’s largest financial services groups. We also have one of the largest footprints in the African region with a combined presence of more than 1,500 distribution points.
Through Barclays Mauritius International Banking, customers and clients have access to no less than seven leading offshore financial centres, with all their assembled expertise. Each of the Barclays global business centres to which Barclays Mauritius international banking is linked provides tax-efficient banking in a stable and respected jurisdiction.
With full access to dedicated relationship managers and product specialists boasting a unique knowledge of the local and regional market and in an advantageous time-zone location, Barclays Mauritius International Banking is well placed to provide customers and clients with global financial solutions combined with comprehensive local support.
What steps over recent years has Mauritius taken to actively diversify its economy to ensure continuing prosperity and growth in spite of the global downturn?
One of the most dynamic and fastest economies in sub-Saharan Africa, Mauritius has in successfully moved since its independence in 1968 from a mono-crop sugar-dominated economy to a services-oriented one. The target spelt out is now that of an innovation-driven economy. This rapid and successful transition to a mature economy - one of just two in Africa - is testimony to the vision and will to succeed jointly shared by government, the business community and the population for sound economic management coupled with a vision to succeed.
Mauritius has spared no effort in securing non-double taxation agreements. DTAs have been ratified with 39 countries and Investment Promotion and Protection Agreements secured with 36 countries. In effect, the country focuses on ensuring that doing business in and from Mauritius is both easy and smooth and compliant with best practices in terms of transparency, good governance and ethics. It is no coincidence that Mauritius has been recognised as the 1st country in Africa in the World Bank Ease of Doing Business Report.
Mauritius has enacted anti-money laundering and terrorist financing legislation while the business framework itself has been made simpler. A "Work & Live in Mauritius" department has even been set up within the Board of Investment in Mauritius to expedite formalities for individuals and investors setting up in Mauritius.
From which countries does Mauritius expect to attract all-important FDI?
Beyond the current markets, namely USA and European countries, it is expected that an increasingly high flow of Foreign Direct Investment will come from Asia and Africa.
As a matter of fact, through the Barclays ‘One Africa Strategy’, Barclays Mauritius is well positioned, thanks to the global network of which it forms part, to tap the potential of Africa and Asia and to capitalise on Mauritius as the bridge par excellence between these two continents and the rest of the world.
On a lighter note, if you had to work out of a different offshore location where would you choose and why?
I have worked across several geographies and though all my previous positions are reminiscent of very good experiences, I guess I would choose to stay in Mauritius at this point in time. There are a number of reasons that dictate this choice…The quality of life there and the wonderful people of course. But over and above these, my motivations as banking professional are the economic potential of this country and the immense opportunities ahead for doing business to and from Mauritius.
Established on 15 October 1919 in Mauritius, Barclays was the first international bank to commence operations in the island. Barclays Bank PLC - Mauritius operates today as a branch of Barclays Bank PLC whose head office is in London. The history of Barclays Bank PLC– Mauritius has been one of award-winning performance. Its most recent accolades are the Bank ofthe Year award for Mauritius from the banker and the EMEA Financeaward for best foreign bank in Mauritius won for the fifth consecutive year.
Barclays Bank PLC – Mauritius provides a range of banking services to both personal and corporate customers and clients. Personal services include current and savings accounts, foreign currency accounts, loans, credit cards, ATMs and telephone banking. Business services include lending products, trade and export finance and specialist services such as treasury, foreign exchange and capital markets capability. Barclays Mauritius also offers leasing products.
Barclays Bank PLC – Mauritius also offers world-class international banking products and services to customers and clients worldwide. International Banking boasts a unique blend for supporting the setting up or expansion of operations within the region thanks to its unquestioned international and multilingual expertise. The strength of the local International Team is further boosted by the fact that Barclays Bank PLC - Mauritius pioneered the local global business sector in 1989 by being the first bank to have an offshore operations licence. Testimony to the ambition of our International Banking team to be on the forefront of innovation is the first-on-the-market launch of a new offering, namely the opening and handling of Foundation Accounts, a new form of business entity introduced recently in Mauritius.
Graham Sheward is Corporate Director in International Banking for Barclays Bank PLC in Mauritius. He can be contacted by phone on +230 4021000 or alternatively via email at email@example.com