Mauritius: what makes its financial sector a reliable one?
An important part of establishing a business in Mauritius is being aware of its economic policies and regulations with regards to its fiscal regime. The country’s current system is defined by transparency and fairness. This article will explore this in more depth. The non-bank economic sector and the global business industry in Mauritius is regulated by the Financial Services Commission (FSC). Established in 2001, the FSC promotes the ‘development, fairness, efficiency and transparency of financial institutions and capital markets’ in the country. Together with the Financial Services Promotion Agency (FSPA), this institution works towards making Mauritius an International Financial Centre of excellence. Both firms advance that Mauritius has always practised a policy transparency and exchange of information, which ensures than financial firms operating in the country are trustworthy and reliable. In 2015, it signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Besides that, the Mauritius International Financial Centre (IFC) is a guarantee of the country being an ideal environment for corporates to operate their business in Mauritius. They can trust in the fiscal regime because of a hybrid legal and conducive regulatory framework. The Mauritius IFC has forged a reputation as a safe, trusted and competitive organisation. Mauritius is now the preferred jurisdiction for FDI flows to the continent since it can serve both Francophone and Anglophone Africa. It has been at the forefront of driving quality investments into Africa. it is at the first position in the continent and at the 20th one worldwide for ease of doing business by the World Bank. The fiscal regime in Mauritius is defined by a transparent mechanism which provides for a level playing field. Moreover, all businesses and individuals can benefit from a competitive tax bracket which is valued at a single rate of 15 percent. This regime has been successful across various sectors. It has generated substantive economic activities throughout Mauritius. The country also boasts 21 Double Tax Avoidance Agreements. These will give foreign investors the opportunity to be exempt from double taxation of the same income in two countries. They can also benefit from the Investment Promotion and Protection Agreement (IPPA). This is a bilateral agreement that protects and promotes foreign investments through legally binding rights and obligations. It guarantees free repatriation of investment capital and returns, arrangement for settlement of disputes between investors and the contracting states and it guarantees against expropriation. Moreover, as advanced by the FSC and FSPA, Mauritius is an active member of the Eastern and Southern Africa Anti Money Laundering Group. This institution aims to reduce money laundering in Eastern and Southern Africa by implementing recommendations of the Financial Action Task Force. This demonstrates that Mauritius has always been striving to fight against international tax evasion and other illegal practices. The above-mentioned developments demonstrate that Mauritius is a reliable country whose economic activities are regulated by both local and international institutions. This ensures the soundness and stability of its financial system. It can be seen as the ideal hub for investing in growing regional markets.
