MAURITIUS: THE KEY TO INVESTMENTS IN ASIA & AFRICA Afsar
Ebrahim Partner: BDO (Mauritius) Offshore Sector : The Mauritian
Experience
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MAURITIUS: ON-SHORE PLATFORM WHERE ASIA MEETS AFRICA Facing the
Challenges of Doing Business in Africa Page 2
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Facing the Challenges of Doing Business in Africa Page 3
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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
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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
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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
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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
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OUR BANKING INSTITUTIONS Facing the Challenges of Doing
Business in Africa Page 8
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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
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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
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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
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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
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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
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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*
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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THANK YOU Facing the Challenges of Doing Business in Africa
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