Mauritius: An international centre of excellence for investment

*This content is brought to you by Dale Capital

By Norman Noland*

Dale Capital Group Limited celebrated its 20^th anniversary as a diversified private equity investment holding company in 2020.

Numerous achievements and accolades punctuate our journey. Beyond our longevity and sustainability, becoming the first foreign company to list on the Stock Exchange of Mauritius Ltd (SEM), and the first SEM-listed company to inwardly list on ZARx, South Africa’s first alternative stock exchange, stand out as key highlights in the company’s history.

After reflecting on the company’s growth over the past two decades, I unequivocally believe that the ease of doing business in Mauritius has been the major contributing factor to our success.

A burgeoning, diversified economy

Mauritius has evolved from its humble beginnings as a mono-crop agricultural economy to become an attractive global investment destination and a hub for financial services excellence.

Additional strategic diversification into tourism, manufacturing and real estate development and construction has supported the idyllic Indian Ocean island’s transformation into an economic powerhouse in relation to its size. The strength of the Mauritian economy helps to sustain the country’s investment-grade rating.

The geography, political stability and the strength of the growing local professional services provider community add additional reasons to choose Mauritius as an investment destination.

Key pan-African region

The island also plays an important role in driving prosperity and investment in the emerging markets of Africa, and connects the continent with key global markets, including Asia.

Mauritius is a founding member of the African Union and the Common Market for Eastern and Southern Africa (COMESA), and is an early member of the Southern African Development Community (SADC).

Through its membership to these aforementioned trading blocs in Africa, Mauritius provides the international investment community with preferential market access to more than 600 million people.

The Mauritian government remains committed to contributing towards the economic development of the African continent through trade. In this regard, Mauritius is party to an extensive network of Investment Promotion and Protection Agreements (IPPA) to facilitate cross-border investment flows and enable global businesses to operate efficiently.

Through its network of Double Taxation Avoidance Agreements (DTAA) and IPPAs, the island nation continues to set up more robust intra-country investment treaties, exchange control mechanisms, regional political insurance cover schemes and other instruments to nurture business and to protect assets for global business in general.

Furthermore, the Mauritius International Financial Centre (IFC) is consolidating its reputation as a jurisdiction of substance for emerging markets and is increasingly considered as an ideal platform for inbound investment into Africa.

Robust, flexible regulatory regime

The country’s robust economy and its attractiveness as an investment destination stem predominantly from the work of the Economic Development Board (EDB) of Mauritius.

The organisation spearheads policy formulation, economic planning, investment, and trade promotion and facilitation in Mauritius.

Operating as an apex body under the aegis of the Ministry of Finance, Economic Planning and Development, the EDB has created a robust, flexible regulatory regime that makes Mauritius an attractive jurisdiction in which to invest.

Good governance & ease of doing business

The EDB also promotes ease of doing business to support sustainable and inclusive economic growth. Mauritius consistently ranks first among African nations in the World Bank Ease of Doing Business Report in relation to this metric.

The jurisdiction maintains its leading status in Africa with respect to Good Governance in the Mo Ibrahim Index, the Global Competitiveness Index, and the Forbes Survey of Best Countries for Business, among others.

Financial services hub

The Mauritius IFC offers a panoply of financial products and services to the international investment and corporate community.

This globally-competitive offering leverages the country’s rich skills base – the country boasts the highest number of accountants per capita, for example – established industry competencies and its growing technological capabilities and infrastructure.

Serving as a hub for financial service excellence, Mauritius offers a range of key services, including private banking, investment structuring, insurance and reinsurance, domiciliation and administration of private wealth, investment banking, and global headquarter administration.

There are currently 1,052 funds with a Global Business Licence in Mauritius, an increasing number of which are impact funds with a focus on Africa. The number of funds that choose to use Mauritius as a base continues to grow.

The strong and rapidly expanding presence of international law firms, corporate services providers, global investment and wholesale banks, and the state-of-the-art stock exchange support the financial sector’s continued growth.

Attractive taxation regime

The country’s intelligently designed and carefully considered taxation regime remains an attractive drawcard for investors and businesses.

A favourable individual income tax rate of 15%, foreign tax relief, no withholding or capital gains taxes, and no estate duty or inheritance tax on the inheritance of shares in a global business entity are powerful benefits that attract more ultra high-net worth individuals (UHNWI) to the country, particularly from South Africa, as the environment supports wealth creation and preservation.

Established double taxation avoidance treaties with key African countries also help to promote cross-border investment flows and enable global trade.

An investment hub

Ultimately, Mauritius ticks all the boxes from an investor’s perspective. As a Director of an investment group, an advisor, and a promoter who calls Mauritius my second home, I not only see Mauritius as a cost-effective jurisdiction but also as a comprehensive IFC.

As we expand further into the Sub-Saharan Africa region, Mauritius will remain Dale Capital Group’s regional investment hub. It is a true international investment destination par excellence.