Ken Poonoosamy, MD of the Board of Investment, Mauritius, believes it’s wrong to label the picturesque Indian Ocean island a tax haven just because it offers the low-tax advantage to investors. Contrary to its notoriety as a transit point for laundered money criss-crossing the world, Mauritius, he says, is one of the most transparent, trusted and white-listed jurisdictions. He spoke toNitin Shrivastava on the sidelines of the Private Equity Mauritius 2012 event held last week in Balaclava.
How has Mauritius evolved as an international financial centre over the last two decades?
We have innovative legislations, tight regulatory framework and new products. Major global banks have a presence here. The environment here is conducive for international investors. The 2012 World Bank Ease of Doing Business index has ranked Mauritius first in the African region and twenty-third globally. We have a talented pool of services providers and professionals andstate-of-the-art infrastructure. All this makes Mauritius a perfect destination for investors looking to invest in Africa and emerging markets.
What are you doing to make it an international finance centre?
We have a framework which offers conventional acts like the Securities Act 2005, Financial Services Act 2007, Banking Act, Anti Money Laundering Act 2002. Then, there are some innovative ones like the Limited Partnership Act 2011 and Private Pensions Scheme Act 2012. All these legislations are important and have played an important role in attracting a number of global banks, global business companies and trustees to Mauritius.
It’s important to highlight the double taxation avoidance agreements and investment promotion and protection agreements because these instruments offer financial efficiency and mitigate risks and offer protection to investors against expropriation. We are now positioning Mauritius as a regional arbitration centre to offer mediation and arbitration services.
The theme for this year’s private equity conference is ‘Developing Mauritius as a Gateway to Africa’. But isn’t investing in Africa fraught with socio-political risks?
From the African continent perspective, I would say that things are changing quite fast. The African countries are growing at over 5.5% and there is rising interest in this region. When the interest is there, there’s more determination among the countries to improve their system. The World Bank Ease of Doing Business index is an important benchmark and most of the African countries this year have seen improvement in their rankings. With Mauritius being top-ranked in terms of doing business, we have learned a lot from the past and Mauritius is really focusing on making Africa an attractive investment destination.
Mauritius is generally perceived as a tax haven and its image has taken a hit in recent months in India..
It’s not true at all. Though we are a low-tax jurisdiction, we remain compliant with all the international norms and standards. We are very conscious that our reputation as an international finance centre remains strong. In fact, India remains a very important partner with long-time economic, social, trade and investment relationships, and we would like to consolidate these. There is a certain perception in India which we want to correct. We do have number of our investors that come from India and we want to show our friends from India what we are doing in Mauritius. We see potential opportunity in Africa for them to invest and we want to leverage on that.