CategoriesEditor's Picks Investment

“Mauritius, a world-class international financial centre” – Cathie Hannelas from Rogers Capital

A recognised expert in the tax advisory industry, Cathie Hannelas shares her views on Mauritius as a world-class international financial centre.

How has Mauritius managed to become an emerging international financial centre?

The surge in foreign investment to our island is due to a number of factors including a robust regulatory framework, harmonised tax environment, a bilingual and skilled workforce, political stability, economic diversity, an ideal time zone and compliance with international standards. If you combine all of these with a strategic geographical position and you have the right ingredients for the emergence of a world-class international financial centre (IFC). Today, the financial services sector accounts for 11.5% of our GDP and provides direct employment to more than 7,500 people and many more indirect employments through the transport or hospitality industries for example.

The credibility of the Mauritius IFC has been recognised in the recently published United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2019, whereby Mauritius is mentioned as playing an important role in intra-regional investment flow in addition to deriving quality investments into African and Asian countries.

As a founding member of the African Union, SADC and COMESA, Mauritius has been and remains a strong economic partner amongst African countries, participating in the economic development process and advocating for the economic empowerment of Africa. 

What incentives are offered to foreign companies looking to settle in Mauritius?

Mauritius has a conducive business environment and robust infrastructure. Right from the outset, foreigners get access through an international airport with a modern terminal and an airport city catering for high-value cargo. In addition, Mauritius has an efficient port with deep water quays as well as a reliable and expanding logistics platform. These are what I would call some of the ‘soft’ features which favours Mauritius.

On a more formal note, the followings make Mauritius attractive. There is no restriction on ownership of companies and Mauritius allows for 100% foreign shareholding. In settling here, foreign investors enjoy a hybrid legal system and an investment-friendly regulatory regime. Mauritius is currently 20th in the World Bank’s Ease of Doing Business ranking. Being located in Mauritius offers a wide range of benefits, including preferential market access to Africa, Europe and USA; a harmonised tax regime; sophisticated product offerings such as Protected Cell Companies, Limited Partnerships, Trusts and Foundations, Regional Headquarters or Family Offices. These incentives can only contribute to provide foreign companies with optimised benefits they seek.

From a tax perspective, the advantages include, no capital gains tax; dividends paid by a Mauritian company are tax exempt; no withholding tax on dividends paid; and no inheritance tax.

Mauritius continuously strives to improve its attractiveness by being forward looking. For instance, in the recent National Budget 2019, the Prime Minister has announced that Mauritius will pursue its ambition to become a Fintech hub in the region through the implementation of the several measures, including new licences for Fintech Service providers and a regulatory regime for Robotics and AI enabled financial advisory services.

The financial reputation of Mauritius is often at stake on the international scene. According to you, is this justified?

The branding of Mauritius as a tax haven is grossly unfounded. The main characteristics of a tax haven jurisdiction are that there is no or low taxation, no treaties, the culture of secrecy and no substance. Mauritius ticks none of those boxes.

The country applies a harmonised 15% tax rate i.e. to residents and non-residents alike. 15% tax is certainly not negligible. If reduced rates of taxes are applied in certain instances, these rates do not discriminate between residents of Mauritius and non-residents i.e. both are treated the same way.

We have a proper treaty network, based on the Organisation for Economic Co-operation and Development (“OECD”) and UN Model, which have been negotiated bilaterally with partner countries founded on mutual understanding. Moreover, Mauritius has shown its commitment to combatting tax evasion by signing, in July 2017, the Multilateral Convention to implement the OECD measures to prevent Base Erosion and Profit Shifting (BEPS “Multilateral Instrument” or “MLI”) and treaty abuses.

In addition, Mauritius has ratified Tax Information Exchange Agreements with several countries, disclosing information upon request. Tax treaties, by definition, also require the exchange of information with partner countries when necessary. Mauritius’ new Code of Corporate Governance, coupled with its presence on the OECD’s white list, represents great strides towards better transparency.

It is important to highlight that the country has been rated as Compliant by the OECD and the EU with regards to international standards for the exchange of information on request between tax authorities. With the view to enhance its transparency and collaboration framework, Mauritius is equally committed to the Common Reporting Standard (CRS) and Country-by-Country reporting. Also, none of our tax regime are considered as being harmful by the OECD.

We continue to reinforce our regulatory framework. In that respect, we have addressed the concerns of the EU by introducing the Controlled Foreign Corporation (CFC) rules and stiffening the economic substance in Mauritius. By “substance”, I mean that a company must have a real presence and genuine business activities in the country of incorporation – the absence of which could suggest that its intents are purely tax-driven. Rather than a mere incorporation, the companies must now prove that they are truly carrying out their core income generating activity in Mauritius.

Since 2016, Mauritius has joined the initiative on systematic sharing of beneficial information. Mauritius is a member of the Eastern and Southern Africa Anti-Money Laundering Group to implement the Financial Action Task Force’s (FATF) Recommendations. Our anti-money laundering and combatting the financing of terrorism systems and procedures have been successfully re-evaluated and endorsed by the FATF Global Network.

As companies shift to Mauritius for more reasons other than its tax incentives, the value-creation story in the financial services sector slowly but surely becomes a reality.

This can only augur well for the Mauritius International Financial Centre.

CategoriesDid you know? Editor's Picks

Work in Mauritius: Licence to thrive

Mauritius combines a picturesque tropical setting with modern infrastructure and lifestyle. There are plenty of opportunities for foreigners who want to live and work or invest in the country. Here’s your guide on how to work in Mauritius.

Booming services and steady 3.5%+ GDP growth

Strong growth in the services sectors has led to increasing demand for various kinds of expertise, hence creating opportunities for foreigners with suitable technical skills or investment projects. Those who have obtained a residence permit through the purchase of property valued at a minimum of USD 500,000 under the PDS/SCS regime can also apply for a work permit.

Tourism, financial and IT services, as well as value-added manufacturing and agro-industries, have long surpassed sugar production as the mainstay of the national economy. The country’s annual GDP growth rate has been hovering around the 3.5-4% mark for the past decade. Mauritius is also a vibrant democracy with very low crime rates, world-class healthcare and education systems as well as top rankings in Africa on social development and corruption indices.

International languages and favourable tax regime

English and French are the main international languages spoken by most of the country’s 1.3 million inhabitants as well as in business and government services. It is therefore easy for foreigners speaking these languages to get involved in various sectors.

The best opportunities in Mauritius lie in finance, IT, engineering, tourism, leisure, healthcare, training and real estate to fill management and technical expertise positions – with a flat tax rate of 15%. Most of the foreigners in senior positions are from Europe, Asia and Africa.

Dominic Dupont, ENL Property, investissement residentiel, residential property
CategoriesEditor's Picks Investment Real Estate

“We use our know-how to contribute to sustainable development in Mauritius”

Dominic Dupont explains how ENL Property, a leading property player in Mauritius, draws on the expertise and experience gained in the luxury residential property market to develop the Moka Smart City as an integrated, high-quality project that is consistent with sustainable development efforts.

Dominic Dupont, ENL Property, investissement residentiel, residential property

How is the luxury property market doing in Mauritius?

The residential property segment continues to expand with a significant increase of foreign direct investment (FDI) to Rs 8.895 billion in 2018. The sector continues to concentrate a large part of FDI inflows, thus contributing to boost the country’s economy. There is a growing demand, especially from Europe and South Africa, and the property market in Mauritius has considerably diversified over time.

What is your view on the development of the market since the opening up of property ownership to foreigners?

There has been a boost in foreign investment in the Mauritian market due to the combination of a broad offering, a very good quality of life and an attractive set of measures, such as access to the Mauritian residence permit and tax incentives. The residential property segment has evolved to address the rising expectations of clients, who are now more knowledgeable about the destination and the market. The latter, which initially consisted predominantly of seaside property developments, has expanded into more urban areas, including apartments, with the passing of the Non-Citizen (Property Restriction) Act and the launch of the Smart City Scheme in 2016.

The ENL Group has also broadened its offering, isn’t it?

Our foray into the luxury property segment through Heritage Villas Valriche and La Balise Marina has actually enabled us to enhance our service standards. These two IRS developments have reached a certain level of maturity – La Balise Marina is in its final phase. Over the years, we ourselves have gained a lot of maturity and honed our knowledge of the market and of specific client requirements. In addition, we have strengthened existing relationships with the relevant authorities, which are essential for the smooth running of such large-scale projects. We also remain attentive to the market and to our partners.

We have acquired extensive expertise and experience in retail, residential and office property, which allows us to keep pace with market developments. This is reflected in our significant involvement in projects such as Les Promenades d’Helvétia, the Moka Smart City’s first residential development, as well as office buildings like The Pod at Vivéa Business Park and The Dot, a brand new undertaking at Telfair.

Smart Cities require an integrated and balanced approach, don’t they?

The underlying Live-Work-Play-Care concept of the Moka Smart City involves a mixed-use development using the latest advances in urban planning and digital technologies. Such developments also require environmentally sound, responsible and integrated space planning and management. We leverage our ability to develop integrated, high-quality projects that are consistent with sustainable development efforts.
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Over the past decade, ecology and innovation have been our key priorities in the development of Moka. The region is transitioning into a more sustainable and liveable city through the progressive rolling out of a concept of ‘citysmarting’. This flexible improvement process stems from a well-thought-out Master Plan. The core elements of the plan are: making optimum use of resources; offering an improved quality of life; creating real economic opportunities; and fostering engagement with key stakeholders.

Visit ready to live in apartments in the West Coast! Accessible to foreign buyers

Involvement in community life therefore remains an important component…

We have a strong commitment that goes beyond the social contribution required from certain property developments. La Balise Marina is also positioning itself as a key stakeholder in the Black River region with a contribution of Rs 15 million to date to promoting the empowerment of a number of people through training, employability and NGO support. All these initiatives are structured around Friends of La Balise, a platform for dialogue with the region’s socio-economic stakeholders. In the same vein, we took an innovative approach to launch the citizen collective, Moka’mwad, with the aim to develop a people-centric city. This will allow the residents to play an active role in the development of the Moka Smart City.

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Haydn Porteous - Professional golfer | Golfeur professionel
CategoriesEditor's Picks Investment Real Estate

Interview with Haydn Porteous, happy home owner at La Balise Marina

The South African professional golfer, Haydn Porteous tells us about what prompted him to invest in property at La Balise Marina.
Haydn Porteous, professional golf player

Could you tell us a little bit about yourself?

I grew up in Johannesburg, South Africa and I play golf for a living. I travel a lot for work and I was looking for a holiday home to just relax and unwind.

Why did you decide to settle down in Mauritius?

What made you choose to buy a home at La Balise Marina?

I came here to play in the AfrAsia Bank Mauritius Open and I really liked it. We often come here for a 1-2 weeks’ trip and the lifestyle is great. Furthermore, I don’t want to bubble wrap my children. I would like them to make their own experiences and not be stuck behind a screen. I want them to enjoy outdoor activities and Mauritius offers more than enough in a safe environment.

In addition, the island is only 4 hours away, making it convenient for my parents, other members of my family and friends to fly to from South Africa. We would like to spend a full month together here during the festive season. The weather is also nice and warm all year round.

Property is appreciating in Mauritius – buying here represents a good investment.

We were looking around and I obviously didn’t want a golf resort because I spend much time on golf courses throughout the year. I really wanted to disconnect while in Mauritius. When I am here, I want to put my feet up, relax and not think about work.

La Balise Marina represented a good choice – it is a niche product, being the only residential marina on the island. There is so much down here, from snorkeling to deep-sea fishing, shore fishing, and obviously the beach. But what really surprised us is that the development is only a 5-minute drive from the Black River Gorges National Park and all its hiking trails. This was definitely a bonus which we didn’t know about.

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Dani (my partner) and I visited the showroom and decided that was exactly what we needed. We decided to buy a fully-furnished, turnkey apartment. I play 30 tournaments a year and didn’t want to go through the hassle of choosing how to furnish it, and realistically it takes time to ship everything here. We were very happy with the quality, the easiness of things. As time goes by, we might personalise a few things like certain lights but for now, everything is fine.

My next step is to buy a boat so that I can enjoy the marina more. But I am still very much enjoying it now: exercising early morning, having lunch at the clubhouse, going to the beach, coming back for a swim in the lap pool, having a braai…

We also like the local cuisine a lot. I grew up in Johannesburg; the nearest coast was 5-6 hours away and we didn’t have fresh seafood – the lobsters here are absolutely delicious.

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Life in Mauritius is really nice; we are considering spending more time here in the future!