OVERVIEW OF MAURITIUS

 

Mauritius, is a beautiful island in the Indian Ocean, located off the eastern coast of Africa known for its stunning beaches and rich cultural heritage. Physiographically, it is part of the Mascarene Islands, and the capital is Port Louis. Mauritius’s GDP is estimated to be $37 billion. The finance sector contributes around 15% to the GDP Mauritius is among the most business-friendly countries in Africa. Mauritius’s economic freedom score is 71.5, making the economy the 19th freest in the 2024 Index of Economic Freedom, published by the Heritage Foundation. It is an island with different languages such as English, French, Creole, Hindi, Mandarin and others.

 

WHY IS MAURITIUS CONSIDERED AS AN INTERNATIONAL FINANCIAL CENTRE (IFC)?

 

Reasons for its economic success resides in its location between mainland Africa and Asia. It capitalizes on this through a wide network of double-taxation and free trade agreements, which include membership of regional economic blocs. The island is a member part of international organizations, namely the African Union, the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). Mauritius is part of both the Commonwealth and Francophonie. Mauritius is also a highly stable democracy. ‘The star and key of the Indian ocean’ boasts fiscal stability alongside a top-tier financial system under the vigilant oversight of its central Bank. The robust financial services sector is embracing fintech innovations, supported by initiatives such as the development of a digital banking framework and the establishment of a licensing regime for virtual assets. The economy is pivoting towards innovation-driven sectors, including high-tech agri-business, IT, business processing outsourcing, fintech and logistics.

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BENEFITS OF MAURITIUS AS AN IFC

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• Robust and modern legislations.

• Committed to international regulatory bodies such as OECD, World Bank, FATF etc. It is on the EU/OECD whitelist.

• Highly committed to investment protection and investor’s confidentiality.

• Presence of a blend of international and local banks.

• No exchange control.

• Highly literate and bilingual population and most of the professionals are highly skilled and qualified.

• Progressive individual tax rate from 2% to 20%

• Flat corporate tax rate of 15 % and partial exemptions up to 95 % in some situations making tax as low as 0.75%.

• No withholding tax on interest, royalties and dividends and no capital gains tax.

• No estate duty, inheritance or wealth taxes.

• Trusts are tax-exempt in Mauritius if elected as non-resident.

• Mauritius is also home to a dynamic freeport industry and export sector. The Mauritius freeport can be used as a hub for bulk breaking, minor processing, assembly and repacking of goods for re-export to Africa, benefitting from the Freight Rebate Scheme.

• Mauritius has signed Investment Promotion and Protection Agreements (IPPAs) with several countries.

• 46 Double Taxation Avoidance Treaties (DTA) with different countries signed to date.

• Mauritius has interesting DTA network with around 16 African Countries.

• Residency and occupational permits available for up to 10 years.

• Acquisition of properties by non-citizen allowed.

 

MAURITIUS IFC AND CONFORMITY WITH LAWS

 

The country has built a solid reputation as a compliant International Financial Centre (IFC) through its stringent regulatory framework, active participation in international cooperation efforts, and transparent financial transactions. Mauritius boasts a robust regulatory structure overseen by the Financial Services Commission (FSC), ensuring adherence to global standards and substance requirements, particularly in the realm of alternative investments and securities trading investments.

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Internationally, Mauritius is engaged in various organizations like the Financial Action Task Force (FATF) and the OECD, abiding by their guidelines and recommendations, including those related to tax treaties and information exchange agreements with other nations.

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In addressing Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), Mauritius places significant emphasis on compliance, mandating roles like the Money Laundering Reporting Officer (MLRO) and Compliance Officer (CO). Its AML/CFT regime requires thorough Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures for high-risk clients. Additionally, Mauritius has established a Financial Intelligence Unit (FIU) to collect, analyse, and disseminate reports on suspicious transactions and other financial intelligence.

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DIFFERENT TRADE PARTNERSHIPS THAT MAURITIUS HAS GLOBALLY

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Mauritius has signed and entered into different trade partnership agreements such as:

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1. African Growth and Opportunity Act (AGOA)

2. Common Market for Southern and Eastern Africa (COMESA)

3. Interim Economic Partnership Agreement (EPA) with the European Union (EU)

4. Southern African Development Community (SADC)

5. UK- Eastern Southern Economic Partnership Agreement

6. The Comprehensive Economic Cooperation and Partnership Agreement (CECPA)

7. Free Trade Agreements (FTA)

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