Mauritius hedges itself as route for investments in Africa

Mauritius a tax haven for decades is worried. Its status as a hub for investments into India is in danger and even as talks with the Indian government are on, it is looking to position itself as a gateway into Africa.

Arvin Boolell, foreign affairs minister, Mauritius, says that between a conducive environment for investors and a large number of treaties with African nations and the lower taxes applicable in Mauritius, the country provides a hospitable environment. Mauritius is banking on a slew of investor protection agreements and tax treaties to make its case. These include Investor Promotion and Protection Agreements with 16 African nations, 36 DTAAs, 13 of them with African nations, seven more DTAAs in the pipeline and most importantly, a zero percent official tax rate on capital gains.

A strategic location, and a friendly legal environment are just icing on the cake.

Manoj Daga, CEO, BDO India, says that Mauritius is a part of Africa, and is yet strategically placed between Asia and Africa, which combined with local knowledge and the proximity provides an alluring option to investors.

Some experts are skeptical.

"The problem, here is that India Inc lacks awareness about the benefits that they stand to enjoy. Several big corporate houses were not aware of the bilateral agreements such as DTAAs that Mauritius has," says Daga.

However, India Inc seems to be taking the bait. From Tata Motors to M&M to ONGC to Essar to Infosys to Bharti Airtel to Godrej Group to Shapporji Palloni Group to Fortis to Apollo quite a few corporates have established a base in Mauritius giving them the ability to springboard into Africa. Clearly, added competition for the traditional SPV jurisdictions like the Netherlands, Singapore and Luxembourg, which have provided an entry into Africa.