Tony Blair once described Africa as :
“There is no doubt: Africa is changing for the better, the perceptions of Africa are
Changing for the better. There is a new sense of hope and confidence, an optimism and
An expectation that is based on evidence not dreams…”
1
-
Growing domestic demand in Africa and Rise of middle class acted as a shock
absorber
Improved macroeconomic management from a generation of managers who trained
during the restructuring programmes of the 90s.
Diversified Economies
2
52 African cities with
more than 1 Billion
people - emerging middle
class & 1.2 billion people
of working age by 2020
Deepening of Financial
Markets: Expanding
banking sector
Diversified economy commodity, financials,
communication &
technology, consumer
goods and retail
IMF: Africa will hosts
seven of the fastest
growing economies in 5
years
Improved macro
economic
indicators and
untapped
resources
Need for
infrastructure
Ease of doing business
has improved - Better
business regulations
Private
consumption to
reach USD 1.8
trillion in 2020
Spending power of
Africa to increase by
25% in the next
decade
3
GDP Growth Rates (%) for Sub
Saharan African Economies
according to The Economist, 2012:
Expected Capital forecast to
reach USD 150 Billion by 2015
Overall Africa is 3rd, ahead of Russia and
Brazil in terms of the number of FDI Projects
4
- Takeover of Zain Telecom’s Africa Operation by Indian Telecom major Airtel for USD
10.7 billion (making Airtel have presence in 15 African Countries).
- Coca-cola looking to add 1300 to 2000 new distribution businesses creating between
5300 to 8400 new jobs and generating about USD 520 million in new revenue for local
economies.
- Godrej acquiring Nigerian personal care product maker Tura last year for about USD
33 million and is planning to acquire 51% stake.
- Walmart’s deal to buy South African retail chain Massmart for USD 4 billion.
- Chinese investments in Africa are expected to cross USD 50 billion and Sino-African
trade is expected to reach USD 300 million within 2015.
5
Hillary Clinton, US State Secretary, 11 August 2009:
“Mauritius may be a small country, but it has the potential to make a big impact, both
by contributing to Africa’s overall prosperity and by showing the way, providing an
example of how other nations can stimulate growth by setting clear and fair rules for
the benefit of those who wish to do business in Mauritius.”
6

Ranked 1st in Africa the World Bank Ease of Doing Business Survey 2012 (23rd
in the World) and ranked first in the Mo Ibrahim Survey on corporate
governance

Member of regional blocs, such as SADC, COMESA and IOR-ARC

White List of OECD



Modern legislative framework with ultimate court of appeal is by judicial
review by the Law Lords of the Privy Council of the UK
No foreign exchange restrictions – allowing free repatriation of funds
Ratified 36 DTAAs (13 DTAAs with African countries) – DTAA with Republic
of Congo and Kenya awaiting ratification and DTAAs with Zambia, Nigeria,
Egypt and Malawi awaiting signature, with Algeria, Burkina Faso, Yemen,
Ghana and Saudi Arabia under discussion

Ratified IPPAs with several of the Africa treaty partners

Member of MIGA, a World Bank Agency

Mauritius is also positioning itself as the arbitration centre in Africa

The Stock Exchange of Mauritius has been designated as a Recognized Stock
Exchange by the UK
7



Income Tax Rate for corporations - of 15%
Credit for foreign taxes suffered available; credit can be claimed in the form of
WHT, underlying taxes or tax sparing
Qualified Corporations – where evidence of foreign taxes suffered are not
available, they are eligible to an 80% deemed tax credit; resulting in a
maximum effective rate of 3%. A qualified corporation is defined as a
corporation holding a GBL 1 License under the Financial Services Act 2007

No WHT on outbound payments by Global Business Companies

No Capital Gains Tax on disposal of shares in Mauritius

No Thin Capitalization rules/legislation

No Transfer Pricing rules/legislation
8
Category 1 Global Business
Domestic Companies
Freeport
Subject to tax at a rate of 15%
Subject to tax at a rate of 15%
Indefinite exemption on the profits
Can claim credit for foreign tax
suffered(FTS). Where no evidence of
FTS, entitled to 80% deemed tax
credit; effective tax rate-3%
Can claim credit for foreign tax
suffered
Eligible to claim benefits under the
expanding Mauritius Treaty Network
Eligible to claim benefit under the
expanding Mauritius Treaty
Underlying tax
Underlying tax
100% Foreign Ownership allowed
Tax sparing
Tax sparing
Reduced Port- Handling Charges
Duty free and VAT free imports on
goods and equipment
Duty free market access for SADC/
COMESA if rules of origin and value
addition criteria met
9
Foreign
Company
RHQ Mauritius
-Foreign tax Credit
-Underlying Tax
-Mixholding Tax
(Mixer Company)
Africa
Africa
Africa
10
Foreign
Company
Mauritius
Pledge Assets
Bank
Advantage:
-Arm length
-Profit
extraction
Loan
Africa
11
Suppliers
Free Port
Company
Mauritius
Advantages:
Can make use of
freeport/ reduced
port handling
charges
Africa
12
African Company
Mauritius
Client
Places Ordertransfers money to
Mauritius to make
payment
Makes payment on
behalf of client
Supplier-Africa
Tax in Mauritius:
Taxation at 15%
Foreign tax credit – 80%
13
Ownership Group
Coverage
Operating Business


Insurance
Premiums
Captive Reinsurance
Tax in Mauritius:
3% if holder of a GBL 1 Licence
14
THANK YOU
15
Belgium
Cyprus
Germany
Italy
Luxembourg
Kuwait
Qatar
Croatia
France
Sweden
UK
Bangladesh
China
Malaysia
Pakistan
Singapore
UAE
Oman
India
Nepal
Sri-Lanka
Thailand
Barbados
Botswana
Mozambique
Namibia
Seychelles
Senegal
Tunisia
Zimbabwe
Lesotho
Madagascar
Rwanda
South Africa
Swaziland
Uganda
16
Target
Countries
Botswana
Lesotho
Madagascar
Mozambique
Namibia
Rwanda
Senegal
Seychelles
South Africa
Swaziland
Tunisia
Uganda
Zimbabwe
Dividends
Withholding tax rates in
target country on
dividends paid
Non-Treaty Treaty with
Rates
Mauritius
15
5/10
25
10
20
5/10
20
8/10/15
10
5/10
20
0
10
0
15
0
0
5/15
12.5/15
7.5
0
0
15
10
20
10/20
Interest
Withholding tax rates in
target country on
interest paid
Non-Treaty Treaty with
Rates
Mauritius
15
12
N/A
10
N/A
10
20
8
0
10
N/A
0
6/8/16/20 0
10/40
0
0
0
10
5
20
2.5
15
10
10
10
Royalties
Withholding tax rates in
target country on
royalties paid
Non-Treaty Treaty with
Rates
Mauritius
15
12.5
N/A
10
N/A
5
20
5
10.5
5
N/A
0
20
0
0/15
0
12
0
15
7.5
15
2.5
15
10
20
15
17