Transcript MAIN PRESENTATION HEADING

MAURITIUS: THE KEY TO INVESTMENTS IN
ASIA & AFRICA
Afsar Ebrahim
Partner: BDO (Mauritius)
MAURITIUS: ON-SHORE PLATFORM WHERE ASIA
MEETS AFRICA
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WHY MAURITIUS?
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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
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MAURITIUS INTERNATIONAL FINANCIAL CENTRE
Expertise in Global Business
Key Service Providers
Pool of Qualified Professionals
Ethics and Corporate Governance
Confidentiality
Competitive
Edge
Regulatory Framework
Communication Network
Business Friendly Environment
Competitive Operation Cost
Wide Range of Financial Products / Services
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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
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MAURITIUS INTERNATIONAL FINANCIAL SERVICES
CENTRE
INDIA: It started here. Bit it’s much more than that now
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Approximately 77% of outbound
Mauritius goes into Asian countries
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No. 1 FDI contributor in India
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In 2011, nearly 44% FDI inflows routed through Mauritius
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Increased Trade flows/business from India to Africa
through Mauritius
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investment
from
OUR BANKING INSTITUTIONS
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TRADING PLATFORM
The Stock Exchange of Mauritius (SEM) is recognised by Her Majesty’s 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.
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LEGAL SYSTEM
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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
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LEGAL FRAMEWORK
• Business & Corporate Laws
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Companies Act 2001
Trusts Act 2001
Protected Cell Act 2000
• Banking, Insurance and
Securities Laws
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Stock Exchange Act 1988
Banking Act 2004
Securities Act 2005
• Fiscal Laws
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Income Tax 1995
VAT Act 1998
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• Procedural and Administrative
Laws
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Financial Services Development
Act 2001
Financial Reporting Act 2005
Insurance Act 2005
• Criminal and Money Laundering
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Financial Intelligence and Anti
money Laundering Act 2002
Prevention of Corruption Act 2002
Prevention of Terrorism Act 2002
ANTI-MONEY LAUNDERING PROTECTION
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Not on any OECD Black List
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FSAP report by the IMF and World Bank positive on
Mauritius
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Up to date laws and regulation on Anti-Money Laundering
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REGULATORS
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Bank of Mauritius regulates
all banking activities
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Financial Services
Commission (FSC) regulates
all non-banking financial
activities such as Insurance,
the Stock Exchange and
Global Business
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TREATY NETWORK: 35 DTAAS IN FORCE
(*7 Treaties awaiting ratification)
Europe
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Caribbean
region
Belgium
Cyprus
Croatia
France
Germany
Italy
Luxembourg
Sweden
UK
Russia*
•Barbados
Africa
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Botswana
Lesotho
Madagascar
Mozambique
Namibia
Rwanda
Senegal
Seychelles
•South Africa
•Swaziland
•Tunisia
•Uganda
•Zimbabwe
•Malawi*
•Nigeria*
•Zambia*
Asia
• China
Middle East
• Kuwait
• Oman
• United Arab
Emirates
• Qatar*
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India
Malaysia
Nepal
Pakistan
Singapore
Sri Lanka
Thaïland
Bangladesh
Vietnam*
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
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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)
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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)
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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
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
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GLOBAL BUSINESS – USE OF GBC’S 1
No limitation on activities
Range of activities include:
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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
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Servicing international clients:
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Financial Advisers
• Asset Managers
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Investment Brokers
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Investment Dealers
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Insurance Brokers
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Pension Scheme Managers
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Pension Scheme Administrators
GBL 1 COMPANIES
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GBC 1 companies tax resident in Mauritius
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Have access to DTA network
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Financial statements in accordance with IFRS or
internationally accounting standards
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Financial statements need to filed within six months of
the financial year
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No par value shares are permitted
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There are no restrictions on the amount of share capital
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TAXATION OF GBL 1 COMPANIES
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Resident based taxation
Tax at the nominal rate of 15%
No capital gains tax in Mauritius
No thin capitalisation rules
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TAX CREDIT SYSTEM
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Deemed Foreign Tax
credit of 80%, resulting
in an effective rate of
3%
Foreign tax credit for
taxes paid on foreign
source income
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TAX RESIDENCE – CONTROL AND MANAGEMENT
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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
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All meetings of the Board of Directors shall be held, chaired
and minuted in Mauritius
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The Company shall at all times keep all its accounting records
at its registered office in Mauritius
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The Company shall ensure that all its banking transactions are
channelled through a bank account
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ENHANCING SUBSTANCE IN MAURITIUS
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One physical board meeting per year
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Majority of directors based in Mauritius
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Foreign Directors
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Telephonic board meetings and written resolution
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Casting vote of Chairman
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Substance office with dedicated telephone and fax lines
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TAX RESIDENCE CERTIFICATE
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Issued on an annual basis with payment of Global
Business License
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Effective date
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Country specific
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Non-compliance with local laws and regulation
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MASTER-FEEDER STRUCTURE
US Exempt + non US investors
US Taxable Investor
No dividend WHT
Delaware
Feeder
Cayman
Feeder
Cayman
Master
No dividend WHT
Dividends: 3% or lower
Mauritius
GBL 1
Indian SPV
PE / RE
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No dividend WHT
0% tax
Capital gains on sale of
shares: tax exempt
Treaty:Mauritius/India
THE GLOBAL BUSINESS COMPANY CATEGORY 2
(‘GBC 2’)
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GBC 2 companies are regulated by the Companies
Act 2001
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It enjoys a very flexible regime and is regulated by
the Financial Services Commission (FSC)
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Used mainly for Investment holding and
International trading
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IMPORTANT FEATURES OF GBC2S (I)
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GBC 2 companies are exempt from income tax
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No withholding tax on outward remittances
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No requirements for audited accounts and annual
returns
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No par value shares are permitted
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There are no restrictions on the amount of share
capital
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IMPORTANT FEATURES OF GBC2S (II)
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The company must have
a local registered agent
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The company may have
only one shareholder
and one director
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Corporate directors are
permissible
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No exchange control
requirements
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IMPORTANT FEATURES OF GBC2S (III)
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Limited life companies are permissible
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Continuation of a foreign company is allowed
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The GBC 2 does not have access to Double Taxation
Treaties
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Nominee shareholders are permissible
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Information on GBC2s not available to the public
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DESTINATION BANKING – BUYING PROPERTY IN
MAURITIUS
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Non-nationals allowed to acquire residential property in Mauritius
under special schemes - Integrated Resort Scheme (IRS) and the Real
Estate Scheme (RES)
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IRS offered at USD 1M minimum with acquirer automatically granted
residence permit
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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
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DESTINATION BANKING – BUYING PROPERTY IN
MAURITIUS
Proposed Company Structure for Villas
Capital
contribution in
insurance policy
Owner
Seychelles Trust
or Company
Loan
Mauritian Company
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Loan
THANK YOU
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