Why choose Mauritius for alternative investment funds?
It might surprise many that Mauritius is not just the perfect holiday destination; instead, it is very well known for being a leading international finance centre. The island is the getaway for US$600 billion of annual investment into Africa and 40% of those leverage its comprehensive list of tax treaties. This demonstrates that the island is proving to be a domicile of substance and value-add. Why opt for Mauritius?
Its regulatory framework for investment funds
Mauritius is equipped with a very mature regulatory investment fund framework. Investment funds are divided into two main categories. These are collective investment schemes (CIS) and closed-end funds (CEF). Foreign investors wishing to benefit from the five-year corporate tax-holiday and to set up, maintain or list any fund or business in the country require the services of an authorised and regulated management company. The latter will fulfil registration and management processes. It will also ensure that the proper functioning of CIS/CEF licensing and maintenance processes and compliance with regulatory requirements.
- September 23, 2020
- Posted by: DeenE
- Categories: Investment funds, Listing, Mauritius, Securities Act
Innovative stock exchange
The Stock Exchange of Mauritius (SEM) is also part of the funds’ ecosystem. The SEM is a leading exchange on the African continent and it has been titled Africa’s Most Innovative Stock Exchange four times during the last 10 years. It has implemented an internationalisation strategy that involves a wide range of local and international products. These are equity products, debt products, funds and collective investment schemes, structured products, exchange-traded funds (ETFs), exchange-traded notes (ETNs) and depositary receipts. Because of its unique multi-currency, capital-raising, listing, trading and settlement platform, it allows an issuer to declare its company’s financial products in US dollars, Euros, British pounds and South African rand and to process transactions in these currencies.
A ‘mid-shore domicile
Another factor contributing to the attractiveness of Mauritius as an investment destination is the fact the jurisdiction provides a politically and economically stable environment. This is underwritten by the Privy Counsel of England and Wales. As such, European investors are increasingly trusting Mauritius’s ‘white list’ status and view the island as more than just an offshore domicile. Many advance that the term ‘mid-shore’ would be more appropriate. A mid-shore company is one which is able to benefit from a more favourable, interchangeable tax rate while also having bank accounts in other parts of the world. It involves more advantages than offshore.
Mauritius is clearly the perfect destination because it is regarded as ‘white flag’ and because the government is taking several steps to ensure that the trust of international investors and managers is won and maintained. Moreover, there is room for further improvement in the country. During the past ten years, there have been considerable developments all over the country and the wealth held in Mauritius has increased by 195% in US dollars. Apart from that, there are other practical reasons attracting investors. These are its bilingual and qualified workforce with the highest literacy rates in Africa, its strategic geographical location and its convenient time-zones which are both Europe and Asia-friendly.
Business-Related Rule Making
In September 2019, A Regulatory Impact Assessment (RIA) framework for evidenced-based business related rule making was established. This project is in collaboration with the Organisation for Economic Co-operation and Development (OECD) and it involves a cost of Euro 500,000 which was funded by the European Union (EU).
Expediting Dispute Resolutions
To facilitate the process of expediting dispute resolutions, the Income Tax Act will be amended. Parties attempting a mediation or a conciliation or an arbitration will be allowed a deduction from taxable income of an amount equivalent to 150% of the case filing fee.