JurisTax recommends countries secure their African investments by basing in Mauritius.
NK: Mauritius offers strong benefits to Australian miners that domicile themselves within the country in two forms: non-fiscal and fiscal incentives.
Four nations lead the global mining industry: Canada, the United States, Russia and China. These groups share a common profile; each commonly uses special investment vehicles to protect their investment. While Australia is inarguably a global mining center, historically the country has delayed its success in that most often Australian miners invest directly in a country, exposing themselves to an unnecessary amount of risk.
Mauritius offers a shelter to these investors. Many Chinese and Russian miners have chosen to setup within the country to structure their investments in Africa. Other mining groups present within the region, like Canadians and Americans, use alternate jurisdictions for this same purpose.
Chinese and Russian investors have chosen to domicile their investments within Mauritius for the social, legal, political and economic stability of the country. In spite of strong regional growth rates, African countries do not yet boast these attributes. By investing in Africa through Mauritius, investors can shelter themselves from the risk of unrest.
The benefit of a structure offers advantages under the Investment Promotion and Protection Agreements (IPPAs) that Mauritius has signed with various countries. IPPAs are bilateral agreements designed to promote and protect the interests of investors from one country in the territory of the country where the investment is being made. Each agreement provides various guarantees such as fair and equitable protection of investments and of the return of investors, expropriation guarantee where the investments shall not be nationalized, expropriated or subjected to measures under due process of law on a non-discriminatory basis and against prompt, adequate and effective compensation.
Furthermore, Mauritius is the only international financial center that is a member of all major African political structures: Common Market for Eastern and Southern Africa (COMESA), African Union, Indian Ocean Rim, Africa, Caribbean and Pacific Group of States (ACP), Indian Ocean Commission (IOC) and South Africa Development Community (SADC). In the case of expropriation, this would mean that the government is also subject to larger, supranational economic and political structures. This grants investor recourse.
A third benefit attached to structuring one’s investment in Africa through Mauritius is found on the level of linguistics. West Africa is one of the premier African mining jurisdictions. West Africa is also French-speaking, as is Mauritius.
A final benefit is found in Mauritius’s ability to raise money. The Stock Exchange of Mauritius offers investors the option of dual listing, granting them access to a wide-range of institutional investors who often invest in Africa through the exchange.
What fiscal incentives does Mauritius offer to investors?
NK: Mauritius has signed 37 double taxation avoidance agreements (DTAs), 19 of which are with African countries. This is supplemented by six treaties that have been negotiated but are now awaiting signature and ratification, whilst more are under negotiation. DTAs allow for investors to plan their taxes through offering investors tax recuperation subject to the terms of the local tax system and that of Mauritius. Mauritius’ tax system is highly competitive. While corporations face a flat tax rate of 15%, international investors can, through a Global Business Company Category 1, be granted an 80% tax credit, which effectively brings the country’s tax rate to 0-3%. Furthermore, Mauritius does not have capital gains tax and withholding tax on dividends.
Though other regions may offer a tax-free environment, such as the British Virgin Islands, Mauritius’ low-tax environment is actually an advantage. We do not offer tax avoidance; we offer tax planning. We offer investors the opportunity to contribute to a country’s development, but to do so in a way that is economic.
Aside from the structural attributes of the country, what does Mauritius offer investors in way of service providers?
NK: The regulatory framework surrounding the financial sector in Mauritius is one of the finest. It offers to investors a strong and stable legal and financial framework supplemented with an extensive selection of local law firms and well known and stable banks like HSBC and The Mauritius Commercial Bank.
Investors often chose to invest directly so as to avoid alienating local stakeholders. Can Mauritius replace this?
NK: Mauritius is very active on the African mainland and coupled with the benefits of agreements already in force together with its membership with various African organisations, it will play a crucial role in the further development as the gateway to investment in Africa.
Who is JurisTax and what services does the firm offer to its clients?
NK: JurisTax is a management company licensed by the Financial Services Commission in Mauritius providing a range of services ranging from advisory and corporate structuring services up to the licensing of entities such as Funds, Foundation, Global Business Companies, Trusts and Domestic companies.
JurisTax does not see itself as being just a corporate service provider; we become part of them and find solutions for him by providing all supporting services such as:-
- Administrative and secretarial services
- Provision of compliance services
- Provision of resident directors and Money Laundering Reporting Officer
- Provision of accounting and tax services
- Provision of representative office facility with the fully furnished offices including telephone, fax, email, internet facilities, receptionist, messenger and courier services. The additional amenities made available to the clients are board and meeting rooms and catering service to host corporate lunches.
Our mission is to let the client concentrate on his core business and we take care of the rest thus fully participating to make the client’s business a success.
This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Official Mining in Africa Country Investment Guide, will be launched next February 2014, as the only official publication providing country-specific information at Africa’s top mining event, the 2014 Investing in Africa Mining Indaba™ held in Cape Town, South Africa.