Investing in Africa and India through Mauritius
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Advantages of Mauritius company when investing in Africa
- Mauritius is the highest ranked country in Africa in important investment criteria, such as: i) Ease of Doing business ii) Index of Economic freedom and iii) Global Competitiveness Index;
- The country has entered into double taxation agreements (DTAA) with important African countries, including: i) Nigeria; ii) Kenya; iii) South Africa; and iv) Tunisia. Consequently, dividend withholding taxes with most African countries are low i.e. range between 0-10%;
- Mauritius is a signatory to 15 investment promotion and protection agreements (IPPA) with African countries, guaranteeing: i) free capital repatriation; ii) asset expropriation; iii) favorable dispute settlements;
- Mauritius has signed an exclusive DTAA with Mozambique, allowing exclusive rights to capital gains tax deduction when selling shares of Mozambique companies;
- Chinese investors interested in investing in Africa can utilize a Mauritius holding companies, as dividends paid back to China will be fully tax exempt.
Advantages of Mauritius company when investing in India
- Mauritius and India have a double taxation agreement, allowing 50% capital tax exemption when selling Indian securities until 31st of March 2019. For example, Mauritius hedge funds will pay 7.5% capital gains tax on share transfer until the 31st of March and 15% thereafter;
- Under the double taxation treaty, dividend withholding taxation between India and Mauritius can be as low as 5%;
- Investment in Indian limited partnerships is allowed without any additional government approval;
- Investment protection is an important consideration when doing business in India. Positively, both countries apply Bilateral Investment Protection Treaty, again guaranteeing: i) free capital repatriation; ii) asset expropriation; iii) favorable dispute settlements;
- There are no such treaties between India and other important holding company centers, such as i) Hong Kong; ii) Cayman Islands; or iii) BVI;
- Mauritius and India share significant economic and cultural ties, resulting in Mauritius being the largest investor in India with about 20% of FDI in 2016.
Disclaimer: Healy Consultants Group PLC neither has an office nor staff in Mauritius nor is it licenced as a management company under Section 77(1) of the Financial Services Act of 2007 or in any other way by the Financial Services Commission.