Mauritius does not exceed 65 km in length and 45 km in width and is 2,000 km from Africa. Yet there are strong indicators that make this island a stimulating example for Africa. In a period of great global economic uncertainty and the collapse of commodity prices, investors must work harder to find strong returns. Does Mauritius have the potential to host them?
Investing in Mauritius
The reputation of the island is an important factor. For decades, Mauritius has had good relations with African and international organizations, including the Southern African Development Community, the World Trade Organization and the Commonwealth Nations. The country has always been regarded as particularly stable, having opted for a parliamentary democracy and an independent judiciary. The Heritage Foundation stipulates in its index of economic freedom that Mauritius has a non-discriminatory and transparent legal system.
Mauritius has multiple bilateral trade agreements across Africa, which means that global investors, traders and private equity companies have preferential access to a number of key African markets and hundreds of millions of customers. It has concluded treaties with 43 countries and is politically and economically stable. This stability stems from full political accountability, free and fair elections and a smartly regulated financial services sector. The Financial Services Commission (FSC) in Mauritius is respected, credible and in compliance with international standards of governance. It is also a member of the International Criminal Court. Stability and accountability are only part of the story. Mauritius ranks first on the Mo Ibrahim index of African governance.
Economy of Mauritius
Mauritius also enjoys sustained economic growth over a long period of time. GDP per capita rose from $ 200 in 1968 to more than $ 7,700 today, and its GDP grew by an annual average of 5.1 per cent between 1977 and 2009. It has been consistently ranked by the World Bank as a country where the business environment is the most attractive in the region. Thus, the island is ranked 32nd out of 189 in the World Bank's Doing Business 2016. Mauritius is also ranked 1st among African countries on the Global Competitiveness Index and the 2015 Index of Economic Freedom.
The infrastructure meets international standards. Business parks of Mauritius Ltd (BPML) has developed high quality industrial and business parks at very competitive prices in strategic locations. BPML was set up in 2001 to place the new information technologies (ICT) at the heart of the Mauritian economy. Over the past 15 years, she has created physical infrastructure projects, including Ebene Cybercity, Rose Belle Business Park, Business Park Solitude and now Business Park in Plaisance. All this, coupled with several financial incentives, attracted many international and local banks, to make Mauritius their regional hub.
The brake of these real estate developments sold under the IRS legal framework is that they are complexes dedicated to a certain elite because the price charged is on average around a million euros of investment.
Investors in Mauritius
Let us add that there is no exchange control and that foreign companies can freely repatriate their profits. Mauritius has also eliminated double taxation with several African countries, signing tax treaties that help businesses based in Mauritius to trade easily throughout the region. It also offers tax optimization solutions by exempting capital investment and interest from banks in Mauritius. All of this means that private equity firms (PEs) are able to offer investors tax-efficient returns in one of the most transparent and well-managed democracies in the region, which is why global PEs such as Quantum Global have invested $ 3 billion in Mauritius.
Investors should also recognize that Mauritius is a country that has never hesitated to implement reforms that promote social development, an important ingredient in the development of a skilled workforce and a knowledge-based economy. The country's dependence on exports of sugarcane has declined significantly, from 90% in 1968 to 3.5% today. This is a brilliant example of success in the outcome of dependence on a primary sector. Historically, textiles and clothing manufacturing, financial and business services and tourism have been the backbone of the economy for many years.
The small and medium-sized enterprises sector is growing, providing new jobs and supporting social mobility. World Bank figures show growth in Mauritius which makes it the ideal spot for any investors in the world.