Investing in Africa and India through Mauritius in 2021
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. Further, Mauritius is also a member of the SADC trading block and its developed distribution channels. 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;
- Being one of the largest exporters of apparel and light knit products to South Africa, every year the Economic Development Board of Mauritius invites all apparel exporting companies of the country to participate in South Africa’s premier apparel sourcing event- ATF Expo. The event brings together global suppliers, manufacturers and buyers to meet the exporters and manufacturers under one roof. This has enabled apparel companies in Mauritius to diversify their exports and grow their businesses substantially.
Advantages of Mauritius company when investing in India
- The Mauritius route to invest in India does not enjoy exemptions on capital gains tax anymore, but it continues to offer lucrative tax benefits to holding companies, especially those dealing in securities like mutual funds, derivatives, debentures;
- 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) protection against asset expropriation; iii) favorable dispute settlements;
- There are no such treaties between India and other important holding company centers, such as i) Seychelles; 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 36% of FDI in 2018.
Healy Consultants Group PLC does not recommend our Clients establish a business in Mauritius, due to the poor business environment provided by the Mauritius Government and Financial Services Commission to multi-national organisations. Healy Consultants Group PLC instead recommends our Clients establish their businesses in these reputable zero tax jurisdictions.