Financial services spurred by adoption of international standards

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In about 30 years, Mauritius has leapfrogged from a mono-crop economy on the sidelines of Africa into a highly diversified economic base that has become a leader of the continent’s emergence. Today, it is not sugar, but manufacturing, ICT, logistics, financial services and tourism that drive the economy, which expanded 3.6% in 2016, according to national statistics.

Mauritius draws strength as a rising financial jurisdiction from this diverse economic base. As of the latest government figures, financial services represent 12% of GDP, compared to manufacturing, the country’s largest sector, which makes up 14% of economic activity. This balanced mix of industries feeds Mauritius with economic resilience while engendering an environment of increased financial sophistication.

“We are offering to the world a financial center of excellence,” believes Harvesh Seegolam, Chief Executive at the Financial Services Promotion Agency of Mauritius. “That means that we meet, operate and adhere to all the best practices in place for financial centers globally.”

The Mauritian government has been heavily focused on creating the necessary environment for foreign companies to incorporate themselves in the country and employ local talent. Mauritius has accomplished this through an enviable corporate tax rate, set at a standard of 15 per cent for individuals and businesses, and by applying best practices. For example, the financial services sector follows the Investment Promotion and Protection Agreements, which the country signed with 36 other countries, allowing Mauritius-based entities to benefit from comprehensive protection against the expropriation of foreign assets.

Mauritius also has plans in motion to improve support for the financial services sector by augmenting the local talent pool skillset and infrastructure, as well as by updating institutional policy. These improvements will help, yet investors point out the country’s low levels of corruption and observance of the local legal system as the true cornerstones of its global competency.

“Today Mauritius is a well respected, competitive and highly connected jurisdiction whereby the rule of law constantly prevails.” said Kabir Ruhee, CEO of Rogers Capital, a Port Louis-based investment management firm. “In addition to being an investment friendly country with a robust and modern regulatory framework with freedom of movement of capital,” said Ruhee, adding: “Mauritius has recently brought in some fiscal incentives to promote global headquartering administration, treasury management center services, investment banking, and asset and fund management activities.”

Such incentives have made the jurisdiction an easy sell for finance and wealth management professionals, says Ruhee. “Today, Mauritius has the fastest growing wealth market in Africa and ranks amongst the leading African countries in terms of talent attraction,” he notes.

Mauritius also benefits from double taxation agreements with 43 nations, including 16 countries in Africa, exemplifying the strong political relations it has developed with many nations across the continent. “If you look at the number of bilateral agreements that we have in Africa,” says Seegolam, “there’s a significant number of [tax treaties] and investment protection and promotion agreements. In China,” Seegolam adds, “the lookout for financial centers of substance such as Mauritius is certainly on the rise.”