Transcript 14 - Structuring Your Investments into Africa

Structuring your investments into Africa
Ben Lim, CEO, Intercontinental Trust Ltd
Mauritius
Investment into Africa
Investment into Africa – Tax Haven
Using a traditional Tax Haven
• African countries known to have high withholding
tax rates
• No Protection from Double Taxation Agreements
• No Protection against Nationalisation or
Confiscation of Assets
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Investment into Africa via Mauritius
Why use Mauritius for Africa?
• Mauritius is part of Africa
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African Union
Common Market for Eastern and Southern Africa (“COMESA”)
Southern African Development Community (“SADC”)
Indian Ocean Rim – Association for Regional Coorperation (“IOR-ARC”)
Africa Growth and Opportunities Act (“AGOA”)
• Excellent Double Taxation Treaties Network
• Bilateral Investment Treaties
• Convenient Time Zones / Good Air Connectivity
• Dual Legal System – English & French
African Investment Funds
• Mauritius is the favoured jurisdiction for incorporating African
Investment Funds
• African Development Bank (“ADB”) recommends Mauritius as an
ideal location for the African Funds
• Member of the International Organisation of Securities
Commissions (“IOSCO”)
• Over 600 Funds incorporated in Mauritius
• Modern legislation covering CIS and Fund Managers/Advisers
Mauritius – Recent Awards
Index
Organisation
Africa
World
Ease of Doing Business
World Bank
1st
17th
Economic Freedom
Heritage Foundation
1st
12th
Easiest Country for Trade
World Economic Forum
1st
33rd
Top Regional Reformer
World Bank
1st
Most Improved Investment
Climate
African Business Awards
1st
Best Governed Country in
Africa
Harvard University
1st
Ibrahim Index
Mo Ibrahim Foundation
Kennedy School of Governance
1st
Europe
In Negotiation
• Belgium
• Cyprus
• Croatia
• France
• Germany
• Italy
• Luxembourg
• Sweden
• UK
• Russia*
• Canada**
• Czech Republic**
• Greece**
• Portugal**
• Iran**
• Burkina Faso**
• Algeria**
• Yemen**
• Ghana**
• Saudi Arabia**
Asia
Middle East
• Kuwait
• Oman
• United Arab Emirates
• Qatar
• Bangladesh
• China
• India
• Malaysia
• Nepal
• Pakistan
• Singapore
• Sri Lanka
• Thaïland
• Vietnam*
Africa
Caribbean region
• Botswana
• Lesotho
• Madagascar
• Mozambique
• Namibia
• Rwanda
• Senegal
• Seychelles
• South Africa
• Swaziland
• Tunisia
• Uganda
• Zimbabwe
• Egypt*
• Kenya*
• Malawi*
• Nigeria*
• Zambia*
• Barbados
Treaty Network: 36 DTAAs in force
* 7 Treaties awaiting signature or ratification
** 10 Treaties being negotiated
DTAs with African Countries
Countries
Dividends
Interest
Royalties
PE
5/10%
12%
12.5%
6m
10%
10%
10%
6m
Madagascar
5/10%
10%
5%
6m
Mozambique
8/10/15%
8%
5%
6m
Namibia
5/10%
10%
5%
6m
Rwanda
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12m
Senegal
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9m
Seychelles
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12m
South Africa
5/15%
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9m
Swaziland
7.5%
5%
7.5%
6m
Tunisia
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2.5%
2.5%
12m
Uganda
10%
10%
10%
4/6m
10/20%
10%
15%
6m
Botswana
Lesotho
Zimbabwe
Africa
• Madagascar
• Mozambique
• South Africa
• Benin*
• Botswana*
• Burundi*
• Cameroon*
• Chad*
• Comores*
• Ghana*
• Guinea Republic*
• Mauritania*
• Rwanda*
• Senegal*
• Swaziland*
• Zimbabwe*
Europe
• Belgium
• Czech Republic
• France
• Germany
• Ireland
• Luxembourg
• Portugal
• Romania
• Switzerland
• UK
Asia
• China
• India
• Korea
• Nepal
• Pakistan
• Singapore
Investment Promotion and Protection Agreements
20 Fully Operational, 13 *Awaiting Ratification
Carribean
Region
• Barbados
Investment Promotion & Protection Agreement (“IPPA”)
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Covers every kind of asset
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Non-Discrimination
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Treatment of Investments. Compensation of losses owing to war / other armed conflict
Expropriation
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Right to Compensation
Disputes between Investor and Contracting Party
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Provision for International Arbitration after 6 months
Disputes between Contracting Parties
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Includes concessions to search for, cultivate, extract or exploit natural resources
Provision for an Arbitral Tribunal
Retroactive
Corporate Vehicles
Global Business Companies (“GBC”)
• Category 1 – Tax Treaty Company (“GBC1”)
• Category 2 – Tax Exempt Company (“GBC2”)
Activities
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Holding Companies
Investment Funds
Asset Management Companies
Private Trusts
Trading Companies
Set up a Mauritius Company
Incorporation
• Two weeks
• Regulated by Financial Services Commission
Re-domiciliation (Migration)
• Most offshore jurisdiction allow companies to migrate out
• Effective way to continue the company to Mauritius
• Immediately after re-domiciliation, the company can take advantage of the
• DTAAs
• Investment Protection Agreements
Redomiciliation of Companies
Countries Allowing Re-domiciliation
Andorra
BVI
Ireland
Maldives
Seychelles
Anguilla
Brunei
Isle of Man
Malta
St Kitts & Nevis
Antigua
Cayman
Israel
Marshall
St Lucia
Aruba
Cook
Jersey
Mauritius
St Vincent
Austria
Costa Rica
Latvia
Montserrat
Switzerland
Bahamas
Cyprus
Lebanon
Nauru
Turks Caicos
Bahrain
Dominica
Liberia
Neth. Antilles
UAE Dubai
Barbados
Gibraltar
Liechtenstein
Panama
Uruguay
Belgium
Grenada
Luxembourg
Philippines
US Virgin
Belize
Guernsey
Macao
Madeira
USA Delaware
Bermuda
Hungary
Labuan
Samoa
Vanuatu
Tax Residence
A Company is tax resident in Mauritius if it is either:
• Incorporated in Mauritius; or
• Managed and controlled from Mauritius
Conditions to obtain a Tax Residence Certificate (“TRC”):
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Two local directors
Local company secretary
Local auditor
Board meetings chaired from Mauritius
Statutory records kept in Mauritius
Accounting records kept in Mauritius
Principal bank account in Mauritius
TRC country specific and renewed yearly
Tax in Mauritius
•No Capital Gains Tax
•No Profits on Sale of Shares
•Maximum Corporate Tax of 3% (Most companies pay zero tax)
•No Withholding Tax on payments from Mauritius
•Advance Tax Rulings
•Whitelisted by OECD
•No Exchange Controls
Intercontinental Trust Ltd
• Intercontinental Trust has been in existence for over ten years
• Licensed and Regulated by the Financial Services Commission
• Principals have been active in this industry for over 15 years
• Over 100 staff
• Active participation in the legal and regulatory reform process of
the financial services sector in Mauritius
• Among the leading Trust Companies in Mauritius
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Services
• Incorporation & Administration of Companies
• Fund Formation and Administration
• International Tax Planning
• Trustee Services
• Accountancy Services
• Business Process Outsourcing
2020
SAS 70
•Intercontinental Trust Ltd and its subsidiaries recently obtained
their SAS 70 Type II certificate
•Audit Report Unqualified by PricewaterhouseCoopers
•One of the first trust companies to have SAS 70 Type II
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Thank You