Mauritius’s strategy 2024 to lead in financial services
Strategically positioned between Africa and Asia, Mauritius has long been recognized as a financial hub in the Indian Ocean. The Mauritius Budget 2024-2025 underscores this status, presenting a clear vision to bolster the financial services sector through strategic alliances and innovation. Blue Azurite explores the key initiatives and strategic plans intended to enhance the financial services industry, attract foreign investments, and foster economic growth. Strategic alliances to strengthen global ties By fostering relationships with major global financial centers and institutions, Mauritius aims to enhance its competitiveness and attractiveness as a financial hub. Indeed, the 2024–2025 budget emphasizes deepening ties with major financial centers. For instance, Mauritius plans to sign new MoUs with financial regulators in major hubs like London, Dubai, and Singapore to facilitate knowledge exchange and regulatory cooperation. Increased participation in global financial forums such as the International Monetary Fund (IMF) and the World Bank should also enhance the island’s visibility and influence in the international financial community. The government also bids on developing joint financial products and services in collaboration with international financial institutions to attract a wider range of investors and businesses to Mauritius. Enhancing bilateral agreements To facilitate smoother cross-border financial transactions and investments, the government is considering: Embracing Fintech and Digital transformation Innovation is at the heart of the Mauritius Budget 2024-2025, with a significant focus on fintech and digital transformation. The government recognizes that staying ahead in the financial services industry requires embracing new technologies and fostering an innovative ecosystem. Significant resources have been allocated to foster the growth of the fintech sector. The aims of such investments include: The government is also keen on supporting the digital transformation of the financial sector through: Enhancing regulatory frameworks to ensure stability and compliance The Mauritius Budget 2024-2025 outlines several measures to strengthen the regulatory environment and ensure compliance with international standards. These include: Incentives and opportunities for foreign investors in Mauritius The latest incentives aimed at attracting foreign investments and encouraging international businesses to set up operations in the country include: Mauritius’ focus on Green Finance The Mauritian government recognizes that environmental sustainability is essential for long-term economic stability. This is why it has introduced several initiatives to promote green finance and environmentally responsible investments. These include: The bottom line By focusing on collaboration with international financial centers, promoting fintech development, enhancing regulatory frameworks, and attracting foreign investments, Mauritius is well-positioned to strengthen its status as a leading financial hub. The budget 2024-2024 presents a comprehensive and forward-thinking plan to boost the financial services sector through strategic alliances and innovation. If you’re looking to invest in Mauritius’ innovative sector, contact Blue Azurite now for tailor-made assistance.
A leading financial services hub in Africa
Over the past decades, Mauritius has transformed into a leading financial services hub in Africa. Besides its strategic location, as the gateway to Asia and Africa, the island boasts several advantages for foreign investors looking for new ventures in the financial sector. This article gives you an insight into the Mauritian financial sector and multiple reasons why you should consider it to grow your business. Mauritius plays a significant role regionally and internationally as a financial hub, offering a wide range of financial products and services, catering to the needs of foreign investors seeking access to African markets. Indeed, Mauritius has allowed many businesses to capitalize on global opportunities by acting as a bridge to growing markets in Africa with its investor-friendly policies and strong regulatory framework. What are the opportunities for investing in Mauritius’ financial sector? When talking about financial services in Mauritius, it’s worth noting that they include banking, investment and asset management, fintech solutions, insurance and reinsurance, as well as offshore financial services. Regional and global banking operations Many international banks have set up their regional headquarters for Africa in Mauritius. Thanks to the growing demand for financial services in Africa and beyond, these banks are able to provide a wide range of banking services to local and international clients. This also means that they can manage their branches, subsidiaries and representative offices in other African countries more efficiently. Since Mauritius also facilitates cross-border banking services, connecting Africa and Asia with the rest of the world, foreign investors can engage and international trade and investment activities more efficiently through trade finance, foreign exchange services and correspondent banking relationships. Besides, Mauritius guarantees a conducive environment for investment banking facilities. International banks operating on the island provide not only corporate finance services but also mergers and acquisitions and capital raising and underwriting services. Investment and asset management By choosing Mauritius, foreign investors can establish funds targeting various asset classes, including private equity, real estate, infrastructure, and hedge funds, to capitalize on the region’s potential for growth and diversification. These funds are established to invest in various asset classes both in Mauritius and internationally. Fund managers can, therefore, benefit from the country’s tax-efficient structures, enabling them to optimize their investment strategies and manage cross-border investments efficiently. Professional fund administration services are readily available in Mauritius, ensuring compliance with regulatory requirements and investor reporting. On another note, High-net-worth individuals (HNWIs) can also establish family offices in Mauritius to oversee their wealth, estate planning, and succession management. Captive insurance and reinsurance Mauritius offers a conducive environment for foreign investors seeking to establish captive insurance companies. The Mauritian Insurance Act provides a clear regulatory framework for the formation and operation of captives. Foreign investors from various industries can create captives to address specific risks that may not be adequately covered or cost-effective through traditional insurance channels. They can also capitalize on reinsurance companies, which play a crucial role in assuming portions of risks ceded by primary insurers, allowing them to manage their exposure and protect their financial stability. Fintech startups and innovation The fintech industry in Mauritius is witnessing significant growth. In fact, the Mauritian government has been actively promoting innovation in financial technology within the growing tech-savvy and skilled population. By investing in fintech startups or establishing technology-driven financial services companies in Mauritius, foreign investors can tap into the increasing demand for digital payment solutions, peer-to-peer lending, remittances, and other tech-enabled financial services in the African region. Offshore financial services Over the past years, Mauritius has established itself as a reputable offshore financial center. The island has been attracting international clients and investors looking to optimize their global financial operations. Indeed, by providing trust services and offering specialized offshore banking solutions, Mauritius has the potential to attract international clients seeking tax-efficient and compliant offshore structures. It’s worth noting that offshore companies, also known as Global Business Companies (GBCs), benefit from a low corporate tax rate and various tax exemptions, making them attractive for holding assets, conducting international business, and facilitating cross-border transactions. Green finance and sustainable investments In recent years, Mauritius has introduced a series of guidelines and initiatives to support green finance and sustainability. The country’s financial regulatory bodies, such as the Financial Services Commission (FSC), encourage financial institutions to adopt sustainable practices and incorporate ESG considerations in their operations. Mauritius’ commitment to green finance and sustainable investments is evidenced by its support for renewable energy projects, sustainable infrastructure, and eco-friendly initiatives. As foreign investors increasingly seek opportunities aligned with environmental and social values, Mauritius’ role as a regional financial hub offers them access to impactful and sustainable investment options in Africa. Why should foreign investors consider Mauritius as a financial services hub? As mentioned above, Mauritius’ strategic location in the Indian Ocean makes it ideal for regional connectivity. Over the past decade, the government has introduced several investor-friendly policies, including tax incentives, thus fostering a conducive environment for financial services providers. Foreign investors in Mauritius are entitled to a range of tax benefits, such as zero capital gains tax, zero withholding tax on dividends paid to non-residents, as well as a low corporate tax rate. The island also has an extensive network of double taxation avoidance treaties with over 40 countries, providing tax efficiency and facilitating cross-border investments. The Financial Services Commission (FSC) and the Bank of Mauritius ensure compliance with international standards, promote transparency, and maintain the financial system’s integrity. The country is committed to upholding regulatory compliance and international standards in the financial sector. As such, it actively participates in global efforts to combat money laundering, terrorist financing, and tax evasion. For foreign investors looking to grow their businesses, Mauritius also offers a skilled talent pool with high-quality expertise in financial services. If all these reasons have convinced you to expand your business in Mauritius, contact Blue Azurite now to get started. Our team of experts will provide you with the most up-to-date information and assist you on every step to make your business thrive.
Mauritius’ role in transforming Africa through private capital
Over the past decade, Mauritius has proved its significant role in transforming Africa through the mobilization of private capital. Thanks to its investor-friendly environment, financial expertise, and strategic positioning, the island plays a pivotal role in attracting foreign investments and channeling funds into transformative projects across the African continent. Here’s how Mauritius can contribute to facilitating private capital transformation in Africa. Infrastructure Development through investment As a major financial hub in the region, Mauritius has the potential to attract private capital from investors around the world. With its strong financial institutions, regulatory framework, and expertise in project finance, Mauritius can play a crucial role in facilitating investment in infrastructure projects across Africa, such as the construction of roads, railways, ports, airports, energy facilities, and telecommunications networks, among others. Such investments are likely to improve connectivity within and between African countries and the rest of the world while enhancing trade, stimulating economic growth and unlocking the potential for sustainable development in Africa. Investment facilitation and promotion Mauritius’ conducive environment for foreign direct investment (FDI) can leverage investments in Africa. The country boasts a stable political climate, a well-established legal framework, as well as investor-friendly policies that make it an attractive destination for investors from around the world. Mauritius actively showcases investment opportunities in Africa, encouraging capital flows and supporting transformative projects through various channels. Investment vehicles and structures The country’s legal framework allows for the establishment of investment funds, such as private equity funds, venture capital funds, and infrastructure funds. These investment vehicles provide a structured and regulated platform for pooling capital and investing in transformative projects across Africa. Investors are likely to benefit from the flexibility, transparency, and tax efficiency offered by these investment structures. Public-Private Partnerships (PPPs) Mauritius has the ability to play a pivotal role in facilitating public-private partnerships between African governments and private investors. By collaborating with these governments, Mauritius can help create an enabling environment for private capital to flow into a wide range of sectors, including healthcare, education, energy, telecommunications, logistics, transportation and tourism. PPPs can leverage the efficiency of the private sector while addressing the social and developmental needs of African countries. A center for venture capital and entrepreneurship Mauritius has the potential to be a center for venture capital, attracting local and international investors looking to fund innovative startups across Africa by providing access to capital, mentorship, and a supportive business ecosystem. This can be another step towards the development of new industries, products, and services, generating employment opportunities and driving economic diversification across the African continent. Expertise in Financial services Mauritius can boast its robust and well-regulated financial sector with commendable expertise in financial services, through which it can provide investment banking services to African countries. This includes support to investors in navigating regulatory complexities, risk management, structuring investment, etc. The country can indeed support the growth and expansion of African businesses by assisting in mergers and acquisitions, facilitating capital raising through initial public offerings (IPOs) and private placements, and offering financial advisory services. This would strengthen their competitiveness and attract further private capital into Africa. Fintech Innovation Over the past years, Mauritius has embraced fintech innovation, positioning itself as a pioneer in Africa in leveraging technology for financial services. The Mauritian regulatory sandbox framework allows for experimentation and development of innovative fintech solutions that facilitate access to private capital. Fintech platforms in Mauritius enable crowdfunding, peer-to-peer lending, digital payment solutions and other innovative financing mechanisms. These provide alternative financing channels for African businesses and projects. Double Taxation Avoidance Agreements (DTAAs) Let’s not forget that Mauritius has signed several Double Taxation Avoidance Agreements (DTAAs) with African countries. These agreements are intended to eliminate or minimize double taxation and promote investment flows to the continent. Thanks to a range of tax benefits and incentives, foreign investors are encouraged to use Mauritius as a jurisdiction for structuring their investments in Africa. Transfer of knowledge and skills Mauritius can promote knowledge and skills transfer within Africa thanks to its various higher education institutions and expertise in training. The country also promotes capacity-building initiatives to enhance private capital investment in Africa. It’s worth noting that Mauritius regularly hosts international conferences, forums, and workshops, bringing together investors, policymakers, and industry experts from around the world. These platforms facilitate dialogue, exchange of best practices, and the sharing of experiences, fostering collaboration and strengthening understanding of investment opportunities in Africa. In fact, Mauritius actively supports training programs and educational initiatives aimed at building local expertise and human capital development in Africa. In short, Mauritius can play a significant role in transforming Africa through private capital. If you are a foreign investor seeking a new venture in Africa, feel free to get in touch with us. Our team of experts will be delighted to assist you in exploring the world of opportunities and making your African investment project a success.
The FSC is now a member of ANNA
This upcoming year will bring several changes to the financial sector in Mauritius. It goes without saying that these will be welcome by several parties, including investors since the government has been working to improve Mauritius as a fintech hub; an attractive destination for firms to conduct business in. One of its moves will reinforce the image of Mauritius. On the 28th of December, the Financial Services Commission (FSC) of Mauritius announced that it has become a member of the Association of National Numbering Agencies (ANNA). It had submitted its application, which was approved by the institution on the 2nd of December 2021. What is the Financial Services Commission? First, let’s have a look at what is the FSC to better understand its role. The Financial Services Commission was establishED in 2021 with the intention to strengthen the reliability and safety of the financial sector in Mauritius. Its aims are to: promote the development, fairness, efficiency and transparency of financial institutions and capital markets in Mauritius, suppress crime and malpractices so as to provide protection to members of the public investing in non-banking financial products; and ensure the soundness and stability of the financial system in Mauritius. To put it simply, it is the integrated regulator for non-bank financial services in Mauritius. What are these? They involve all services and products provided by financial firms such as asset management etc. and that contribute to economic growth and development in the country. The sectors regulated by the FSC are insurance, capital markets, funds, global business and pensions. To sum it up, it licenses, regulates, monitors and supervises the conduct of business activities in the sectors other than banking. One of its main functions is to implement appropriate measures to ensure the protection of those using financial services in Mauritius and to increase awareness with regards to the different benefits and risks related to investments. The vision of the FSC is to become “an internationally recognized Financial Supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre” and it plans to achieve this by meeting globally accepted norms and standards. What is ANNA? The Association of National Numbering Agencies are the various institutions across the world that assign a unique identification code to each new security as it is issued. Its aim is to make the financial world a more efficient, safer and more stable environment for both financial institutions and investors. Present in more than 120 countries, it involves partnerships with central banks, central securities depositories, data vendors, regulators and stock exchanges. ANNA’s mission statement is to proactively promote, implement and maintain standards for financial firms. They aim to make related information available in a uniform and accurate structure for the benefit of the global financial markets as a whole and this is done by providing high quality actionable global ID and reference data and services to stakeholders. This will allow companies to uniquely identify, classify and describe entities and financial instruments. It operates in such a way that it is able to deliver consistent financial standards for its members across the globe. What does this recognition mean for the FSC and for Mauritius? Following the approval of the FSC’s application in December 2021, the firm has become the only National Numbering Agency (NNA) in the country. Now, it pledges to keep upholding the obligations towards ANNA. This means that, henceforth, it will assign International Securities Identification Numbers (ISINs) that deal with securities trading in Mauritius. The ISIN is used in any task related to the administration and trading of securities and other financial instruments. This means that they are mandatory for any financial instrument registered in the country, not just those listed on the Stock Exchange of Mauritius. It should be noted than each ISIN issued requires an issuance fee of $600USD. Nonetheless, the FSC pointed out that only licensed clearing and settlement facilities in Mauritius are authorised to charge such a fee on behalf of the FSC. Moreover, this issuance fee may be subject to revision in the future. The importance of ISINs for financial firms Let’s have a look at ISINs and its importance for financial firms? An International Securities Identification Number is made up of a 12-digit alphanumeric code. Each one of them is uniquely generated for a specific security so that it can be easily identified and tracked across the globe. ISIN is used in the processing of transactions and for recordkeeping and regulatory reporting. Its goal is to reduce delay, mismatches and confusion in global financial markets. Regarded as the defacto standard for trading securities, its use is mandatory for all firms who deal with securities, both locally and internationally. What are the advantages of ISINs? These numbers will improve the regulatory environment in which a financial firm operates. For instance, it increases transparency. The use of these identifiers makes it easier for regulators to supervise the market. Additionally, these numbers imply increased automation, which improves the overall efficiency of the market. As such, these numbers allow firms in Mauritius to operate in a more effective way. Besides more precise administrative control, it ensures increased transparency which enhances security for investors.
Mauritius is no longer part of the ‘Grey List’ by FATF!
If you are a firm looking to conduct business in a foreign country, you must be sure about the reliability of the jurisdiction in which you are operating. This is because this would guarantee that your operations are being conducted smoothly in a trusted environment. It is also important that you work in a country that is constantly trying to improve itself as a site where businesses operate. One such example is Mauritius. For instance, it is strengthening its AML regulations and introducing new security measures protecting businesses. Just recently, on the 21st of October the Financial Action Task Force (FATF) held its Planetary meeting, during which it announced that Mauritius is no longer part of its ‘grey list’. This is a list of jurisdictions that have strategic deficiencies in their approach to anti-money laundering and combatting terrorism financing (AML/CFT). Therefore, they have to introduce more ways to monitor firms with suspicious transactions. What measures did Mauritius take to get out of the list? In February 2020, Mauritius was first placed on the ‘grey list’, a decision by the EU that became applicable on the 1st of October 2020. The country, being dedicated to constantly improving itself and to becoming a fintech of excellence in the Indian Ocean, did not take things lightly. Following this listing, it made a high-level political commitment to the FATF to address the strategic deficiencies identified. To do so, a committee was created. It was headed by the Prime Minister and its aim was to accelerate implementation of its FATF Action Plan so that the country is no longer part of the list by the next year. Several measures were introduced. As the FATF advanced, certain key reforms played a huge role. These are: Conducting outreach to promote understanding of Money Laundering and Terrorism financing risks and obligations, Developing risk-based supervision plans effectively for the Financial Services Commission, Ensuring access to accurate basic and beneficial ownership information by competent authorities in a timely manner, and Providing training for law enforcement authorities to ensure that they have the capability to conduct money laundering investigations. Moreover, Mauritius is constantly collaborating with Eastern & Southern Africa Anti-Money Laundering Group to strengthen its AML/CFT regime. More recently, it has circulated a draft Virtual Assets Business Bill for consultation to obtain feedback and comments from stakeholders. How did FATF make its decision? These measures have been enforced all throughout the year. This year, from the 13th till the 15th of September ATF’s Africa/Middle East Joint Group (AME JG) conducted an onsite assessment of Mauritius’s AML-CFT Framework. This was to verify that implementation of the AML/CFT reforms had begun and was being sustained in the island. It also ensured that the necessary political commitment remained in place to sustain implementation in the future. To take a decision, a delegation from the FAFT held different meetings with relevant ministries and authorities. They also visited several institutions to oversee first-hand the way operations are being carried out. It was found out that the country had substantially completed its action plan. Moreover, it was commended to for its considerable progress in addressing the strategic deficiencies identified, especially since the coronavirus pandemic has disrupted several economies. Following the assessment and in light of the efforts being made by the country, the FAFT decided to remove Mauritius from its grey list. Its president, Dr. Marcus Pleyer advanced, “Mauritius has strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020. Mauritius is therefore no longer subject to the FATF’s increased monitoring process”. The European Commission will review the information by the FAFT and will remove Mauritius from the blacklist at the earliest opportunity. This removal shows that Mauritius is a trusted jurisdiction of substance. Mauritius, ‘compliant’ or ‘largely compliant’ with FAFT recommendations The FAFT recommendations are global standards against money laundering and terrorist financing that allow countries to successfully take actions against any form of fraud or illegal operations carried out within their financial sector. To put things in perspective, they set out a comprehensive and consistent framework of measures that countries have to adhere to combat money laundering and terrorist financing. They set an international standard. While introducing measures to address the deficiencies, Mauritius applied for an upgrading against FATF Recommendations 8, 24 and 33. There were reviewed at the 21st Council of Ministers Meeting and 42nd Task Force of Senior Officials’ Meeting of the Eastern & Southern Africa Anti-Money Laundering Group and it led to the country obtaining another rating. It became: ‘largely compliant’ for Recommendation 8- which is related to Non-Profit Organisations, ‘Largely Compliant’ for Recommendation 24 (Transparency and Beneficial Ownership of Legal Persons) Compliant’ for Recommendation 33 (Statistics). These changes imply that Mauritius is now ‘Compliant’ or ‘Largely Compliant’ with 39 out of the 40 FATF Recommendations. It is only lacking when it comes to Recommendation 15 (New Technologies), for which it is rated as ‘Partially Compliant”. A leading investment destination, the island is perfect for structuring cross border investment into Africa and Asia.
Z/Yen: The Global Financial Centres Index 28 (GFCI 28)
The twenty-eighth edition of the Global Financial Centres Index (GFCI 28) was published on 25 September 2020. GFCI 28 provides evaluations of future competitiveness and rankings for 111 major financial centres around the world. The GFCI serves as a valuable reference for policy and investment decision-makers. GFCI 28 shows a relatively high level of volatility, with 23 centres rising ten or more places in the rankings and 20 falling ten or more places. Refer to link below: https://www.zyen.com/media/documents/GFCI_28_Full_Report_2020.09.25_v1.1.pdf
EU takes legal action against ‘golden passport’ schemes in Cyprus, Malta
The European Union’s executive said on Tuesday it was launching legal action against Cyprus and Malta over their investor citizenship programmes, also known as “golden passport” schemes. The schemes allow wealthy foreigners to buy citizenship in exchange for an investment of around 1 million euros ($1.2 million) in Malta and 2 million euros in Cyprus. The European Commission said the decision was taken because the two member states granted nationality – and thereby EU citizenship – without requiring “a genuine link with the country”, as passport holders were not obliged to reside there. The Commission also sent a letter to Bulgaria raising concerns about its passport-for-sale scheme, it said in a statement. “There cannot be a weak link in EU efforts to curb corruption and money laundering ” Values and Transparency Commissioner Vera Jourova said. Malta’s Finance Minister Edward Scicluna said on Tuesday the country was replacing its current scheme with a new programme that would introduce tighter vetting of applicants, who will have to be residents of the islands for a year before their applications can be considered. The commission has refrained from launching legal actions against EU states that sell residence permits, also known as “golden visa schemes”, without requiring investors to stay in the country for a meaningful period, despite a European Parliament resolution urging such a move. In a 2019 report the commission acknowledged golden visa and golden passport schemes posed similar money-laundering and organised crime risks. Portugal, Greece and Bulgaria currently offer golden visa schemes under these lax conditions, a practice of which Latvia was pioneer in Europe. Cyprus said last week it was suspending its citizenship-for- investment programme, ditching a scheme the government had acknowledged was open to abuse after an investigation by Al Jazeera, a media outlet. The commission said it would need concrete actions to stop the practice. The EU cannot ban such schemes, but it can force countries to require “effective residence”, meaning physical presence for a regular and extended period in the territory of the state concerned. Both states circumvented those rules, the commission said. The Cypriot and Maltese governments have two months to take action. Without meaningful changes, the commission could refer them to the bloc’s Court of Justice and ultimately it can ask the court to impose penalties.
Powers of directors of a company which is placed in administration
Last week, the wealth manager AMP has finally accepted its fate. It has stopped its operations and has put up the ‘For Sale’ sign. As you might have guessed, this was not a sudden decision. The firm had been struggling for quite a while before deciding that things will not get better. In fact, its downfall will be remembered for a long time to come in the financial world since it…
Highlights of the Mauritius Anti-Money Laundering
To align the Mauritius International Financial Centre to international norms and standards pertaining to AML/CFT and meet the Financial Action Task Force (FATF) requirements, the Anti-Money Laundering and Combatting the Financing of Terrorism (Miscellaneous Provisions) Act 2020 (the “Act”) was approved by…
AMP finance scandals – lessons to be learnt from this controversy
Last week, the wealth manager AMP has finally accepted its fate. It has stopped its operations and has put up the ‘For Sale’ sign. As you might have guessed, this was not a sudden decision. The firm had been struggling for quite a while before deciding that things will not get better. In fact, its downfall will be remembered for a long time to come in the financial world since it…
