Mauritius as a Jurisdiction for Financial Services
Mauritius is a politically stable independent country of 1.2m people, a former colony of the UK (gaining Independence in 1968), operates a Westminster Democracy, and has the Privy Council in London as its Court of Final Appeal. It is a highly respected, and well-regulated jurisdiction which offers top class Financial Services to international investors.
It has a very well-educated workforce who are bi-lingual in English and French, with English being the Official Language of the country, and it has an excellent Time Zone for comprehensive ease of communications (GMT +4 in winter, GMT +3 in summer).
Mauritius as a Fund Jurisdiction
Mauritius already provided over 40% of foreign direct investment into India principally because of the Double Tax Treaty between the two countries.
Mauritius does not charge capital gains tax, so it makes it a very attractive location from which to base investments into India, and other jurisdictions, using funds, whether public or private.
Mauritius has over 43 tax treaties, and they can be conveniently divided into three main sets as follows:
Malawi (in negotiation)
Tanzania (in negotiation)
Tax Advantages of Mauritius
The usual vehicle of choice for funds in Mauritius is a Mauritius corporation incorporated under the Companies Act 2001*, which has a Global Business Licence. Such a corporation is used for open and closed-end funds, private and public investments, private equity and real estate investments.
Because of the Mauritius Tax Treaties, dividends can be extracted from the source country with no (or at a preferential rate of) withholding taxes.
Dividend and interest payments by a GBL company out of Mauritius are exempted from Mauritius tax – there are no withholding taxes.
In Mauritius, gains or profits from the sales of units, securities and debt obligation are exempt from all taxes. Furthermore, 80% of certain income, including income (but not limited) derived by fund managers, administrators, and advisors, is eligible for tax exemption.
Investment Support via Investment Protection Agreements
In addition to the attractive tax regime, Mauritius has also entered into Investment Protection & Promotion Agreements with most of the African (and other) countries listed above which provide safeguards against expropriation or interference by Countries receiving the investment.
In the local region, Mauritius is also a Member of the Common Market for Eastern and Southern Africa (COMESA), the Southern Africa Development Council (SADC), and the African Union.
Other Fund Structures
Limited Partnerships (LPs), and Protected Cell Companies (PCCs) can also be used as Collective Investment Schemes, or any entity approved by the Mauritius FSC.Corporate & Chancery also specialize in PCCs and operate the sole non-CIS PCC in Mauritius.
The Cost of Doing Business in Mauritius
The overhead cost of doing business in Mauritius is almost one fifth or less of that in the Channel Islands, or London, Luxembourg, or Dublin making the case for basing a fund in the territory compelling.
*The Mauritius Companies Act is a judicious blend of UK, New Zealand, and Canadian company legislation.