Slide 1

Slide 2

MAURITIUS: THE KEY TO INVESTMENTS IN ASIA & AFRICA Afsar Ebrahim Partner: BDO (Mauritius) Offshore Sector : The Mauritian Experience

Slide 3

MAURITIUS: ON-SHORE PLATFORM WHERE ASIA MEETS AFRICA Facing the Challenges of Doing Business in Africa Page 2

Slide 4

Facing the Challenges of Doing Business in Africa Page 3

Slide 5

WHY MAURITIUS? Political stability and a good legal framework Ultimate Court of Appeal is the Privy Council in the UK Excellent telecommunication network Well educated multilingual labour force (English and French) with a population of 1.2 million No exchange control Favourable time zone for Europe and Asia Facing the Challenges of Doing Business in Africa Page 4

Slide 6

MAURITIUS INTERNATIONAL FINANCIAL CENTRE Confidentiality Key Service Providers Pool of Qualified Professionals Ethics and Corporate Governance Competitive Operation Cost Business Friendly Environment Wide Range of Financial Products / Services Expertise in Global Business Regulatory Framework Communication Network Facing the Challenges of Doing Business in Africa Page 5

Slide 7

MAURITIUS: HOME OF THE FREE. #1 IN THE REGION Not a Tax Heaven but a Tropical Paradise Taxation is competitive and efficient. The economy is increasingly diversified with significant private-sector activity in sugar, tourism, economic processing zones, and financial services, particularly in offshore enterprises. Wall Street Journal and Heritage Foundation, 2010 Index survey Facing the Challenges of Doing Business in Africa Page 6

Slide 8

MAURITIUS INTERNATIONAL FINANCIAL SERVICES CENTRE INDIA: It started here. Bit its much more than that now Approximately 77% of outbound investment from Mauritius goes into Asian countries No. 1 FDI contributor in India In 2011, nearly 44% FDI inflows routed through Mauritius platform Increased Trade flows/business from India to Africa through Mauritius Facing the Challenges of Doing Business in Africa Page 7

Slide 9

OUR BANKING INSTITUTIONS Facing the Challenges of Doing Business in Africa Page 8

Slide 10

The Stock Exchange of Mauritius (SEM) is recognised by Her Majestys Revenue and Customs of the United Kingdom and the ability to list, trade and settle products in USD, Euro and GBP. Global Board of Trade (GBOT), the first international multi-asset exchange from Mauritius, enhances the economic space for players looking beyond the shores of Mauritius with sophisticated mechanisms for hedging and risk mitigation tools for trading in commodity and currency derivatives. GBOT has been achieving T+1 settlement. TRADING PLATFORM Facing the Challenges of Doing Business in Africa Page 9

Slide 11

LEGAL SYSTEM Written Constitution based on the doctrine of separation of Powers Ultimate Court of Appeal is the Privy Council in the UK Hybrid Legal system based on French and English Laws Ratified the New York Convention on the Enforcement of foreign Arbitral Awards Facing the Challenges of Doing Business in Africa Page 10

Slide 12

LEGAL FRAMEWORK Business & Corporate Laws o Companies Act 2001 o Trusts Act 2001 o Protected Cell Act 2000 Banking, Insurance and Securities Laws o Stock Exchange Act 1988 o Banking Act 2004 o Securities Act 2005 Fiscal Laws o Income Tax 1995 o VAT Act 1998 Procedural and Administrative Laws o Financial Services Development Act 2001 o Financial Reporting Act 2005 o Insurance Act 2005 Criminal and Money Laundering o Financial Intelligence and Anti money Laundering Act 2002 o Prevention of Corruption Act 2002 o Prevention of Terrorism Act 2002 Facing the Challenges of Doing Business in Africa Page 11

Slide 13

ANTI-MONEY LAUNDERING PROTECTION Not on any OECD Black List FSAP report by the IMF and World Bank positive on Mauritius Up to date laws and regulation on Anti-Money Laundering Facing the Challenges of Doing Business in Africa Page 12

Slide 14

REGULATORS Bank of Mauritius regulates all banking activities Financial Services Commission (FSC) regulates all non-banking financial activities such as Insurance, the Stock Exchange and Global Business Facing the Challenges of Doing Business in Africa Page 13

Slide 15

Caribbean region Barbados Caribbean region Barbados Middle East Kuwait Oman United Arab Emirates Qatar* Middle East Kuwait Oman United Arab Emirates Qatar* Africa Botswana Lesotho Madagascar Mozambique Namibia Rwanda Senegal Seychelles South Africa Swaziland Tunisia Uganda Zimbabwe Malawi* Nigeria* Zambia* Africa Botswana Lesotho Madagascar Mozambique Namibia Rwanda Senegal Seychelles South Africa Swaziland Tunisia Uganda Zimbabwe Malawi* Nigeria* Zambia* Asia China India Malaysia Nepal Pakistan Singapore Sri Lanka Thaland Bangladesh Vietnam* Asia China India Malaysia Nepal Pakistan Singapore Sri Lanka Thaland Bangladesh Vietnam* Europe Belgium Cyprus Croatia France Germany Italy Luxembourg Sweden UK Russia* Europe Belgium Cyprus Croatia France Germany Italy Luxembourg Sweden UK Russia*

Slide 16

INVESTMENT PROMOTION AND PROTECTION AGREEMENTS (IPPAS) IPPAs are bilateral agreements between governments to promote Mauritian investment overseas It act as a mainstay in investment whilst curbing the level of risk between countries Mauritius has concluded 36 IPPAs worldwide; 22 are currently in force among which eminent African countries (South Africa) IPPAs help Mauritius enhance its doing business environment and position Mauritian Investment on the international arena Facing the Challenges of Doing Business in Africa Page 15

Slide 17

GLOBAL BUSINESS LEGAL ENTITIES Private and Public Companies (Companies limited by shares, guarantee or both) Limited Life Companies (LLCs) Partnerships Trusts Protected Cell Companies (PCCs) Facing the Challenges of Doing Business in Africa Page 16

Slide 18

GLOBAL BUSINESS LEGAL ENTITIES Limited Life Companies (LLCs) Similar to US Partnerships Venture capital, investment funds, real estate projects Limited to 50 years (may be extended to 150 years) Protected Cell Companies (PCC) Statutory segregation of assets and liabilities No minimum capital requirement Added flexibility for structuring international investments No limit on number of cells May be used for: Asset holding Structured Finance Business CIS Closed-ended Funds Insurance Business Facing the Challenges of Doing Business in Africa Page 17

Slide 19

USES OF A MAURITIAN OFFSHORE COMPANY Provides control and coordination of a group of international subsidiaries Provides an advantageous entry and exit point Holds patents and facilitation of exploitation through (sub) license Grants loans to group companies as a (intermediate) finance company Provides a vehicle for securitization and captive insurance purposes Provides a vehicle for cross border insurance Acts as a holding and trading company Provides an advantageous entry and exit point for investments in Asia and Africa Facing the Challenges of Doing Business in Africa Page 18

Slide 20

GLOBAL BUSINESS USE OF GBCS 1 No limitation on activities Range of activities include: Investment Holding Fund Management / Collective Investment Scheme Consultancy Services, Employment Services Logistics and Marketing Aircraft Leasing and Financing Shipping and Ship Management Licensing and Franchising Pension Funds Insurance Legal / Tax Services No limitation on activities Range of activities include: Investment Holding Fund Management / Collective Investment Scheme Consultancy Services, Employment Services Logistics and Marketing Aircraft Leasing and Financing Shipping and Ship Management Licensing and Franchising Pension Funds Insurance Legal / Tax Services Servicing international clients: Financial Advisers Asset Managers Investment Brokers Investment Dealers Insurance Brokers Pension Scheme Managers Pension Scheme Administrators Servicing international clients: Financial Advisers Asset Managers Investment Brokers Investment Dealers Insurance Brokers Pension Scheme Managers Pension Scheme Administrators Facing the Challenges of Doing Business in Africa Page 19

Slide 21

GBL 1 COMPANIES GBC 1 companies tax resident in Mauritius Have access to DTA network Financial statements in accordance with IFRS or internationally accounting standards Financial statements need to filed within six months of the financial year No par value shares are permitted There are no restrictions on the amount of share capital Facing the Challenges of Doing Business in Africa Page 20

Slide 22

TAXATION OF GBL 1 COMPANIES Resident based taxation Tax at the nominal rate of 15% No capital gains tax in Mauritius No thin capitalisation rules Facing the Challenges of Doing Business in Africa Page 21

Slide 23

TAX CREDIT SYSTEM Deemed Foreign Tax credit of 80%, resulting in an effective rate of 3% Foreign tax credit for taxes paid on foreign source income Facing the Challenges of Doing Business in Africa Page 22

Slide 24

TAX RESIDENCE CONTROL AND MANAGEMENT The Company shall at all times have at least two Directors resident in Mauritius. The resident directors shall be of appropriate calibre who can exercise independence of mind and judgement All meetings of the Board of Directors shall be held, chaired and minuted in Mauritius The Company shall at all times keep all its accounting records at its registered office in Mauritius The Company shall ensure that all its banking transactions are channelled through a bank account Facing the Challenges of Doing Business in Africa Page 23

Slide 25

ENHANCING SUBSTANCE IN MAURITIUS One physical board meeting per year Majority of directors based in Mauritius Foreign Directors Telephonic board meetings and written resolution Casting vote of Chairman Substance office with dedicated telephone and fax lines Facing the Challenges of Doing Business in Africa Page 24

Slide 26

TAX RESIDENCE CERTIFICATE Issued on an annual basis with payment of Global Business License Effective date Country specific Non-compliance with local laws and regulation Facing the Challenges of Doing Business in Africa Page 25

Slide 27

MASTER-FEEDER STRUCTURE CaymanMaster DelawareFeederDelawareFeeder CaymanFeederCaymanFeeder US Exempt + non US investors Mauritius GBL 1 Indian SPV PE / RE Indian SPV PE / RE Capital gains on sale of shares: tax exempt No dividend WHT 0% tax No dividend WHT Treaty:Mauritius/India Dividends: 3% or lower US Taxable Investor Facing the Challenges of Doing Business in Africa Page 26

Slide 28

THE GLOBAL BUSINESS COMPANY CATEGORY 2 (GBC 2) GBC 2 companies are regulated by the Companies Act 2001 It enjoys a very flexible regime and is regulated by the Financial Services Commission (FSC) Used mainly for Investment holding and International trading Facing the Challenges of Doing Business in Africa Page 27

Slide 29

IMPORTANT FEATURES OF GBC2S (I) GBC 2 companies are exempt from income tax No withholding tax on outward remittances No requirements for audited accounts and annual returns No par value shares are permitted There are no restrictions on the amount of share capital Facing the Challenges of Doing Business in Africa Page 28

Slide 30

IMPORTANT FEATURES OF GBC2S (II) The company must have a local registered agent The company may have only one shareholder and one director Corporate directors are permissible No exchange control requirements Facing the Challenges of Doing Business in Africa Page 29

Slide 31

IMPORTANT FEATURES OF GBC2S (III) Limited life companies are permissible Continuation of a foreign company is allowed The GBC 2 does not have access to Double Taxation Treaties Nominee shareholders are permissible Information on GBC2s not available to the public Facing the Challenges of Doing Business in Africa Page 30

Slide 32

DESTINATION BANKING BUYING PROPERTY IN MAURITIUS Non-nationals allowed to acquire residential property in Mauritius under special schemes - Integrated Resort Scheme (IRS) and the Real Estate Scheme (RES) IRS offered at USD 1M minimum with acquirer automatically granted residence permit RES has no minimum price but it does not confer automatic permanent residency but can apply for residency through an Occupation Permit or Residence permit if investment is above USD500k Facing the Challenges of Doing Business in Africa Page 31

Slide 33

DESTINATION BANKING BUYING PROPERTY IN MAURITIUS Proposed Company Structure for Villas Seychelles Trust or Company Mauritian Company Capital contribution in insurance policy Owner Loan Facing the Challenges of Doing Business in Africa Page 32

Slide 34

THANK YOU Facing the Challenges of Doing Business in Africa Page 33