Republic of Mauritius- Financial services sector is here to stay for a long time and has glorious days ahead, says Minister Sesungkur

The Minister of Financial Services and Good Governance, Mr Dharmendar Sesungkur, made this statement on 16 April 2019 at the National Assembly, in reply to a Parliamentary Question related to the Global Business Sector.

The Minister highlighted that relentless Governmental efforts have enabled Mauritius to successfully build its brand and consequently perform well on several global indices. He indicated that Mauritius was ranked 1^st in Africa and 20^th globally in the Ease of Doing Business Index; 1^st in Sub-Saharan countries and 49^th globally in the Global Competitiveness Index; 1^st in Africa and 39^th globally for Best Country for Business by Forbes; 1^st in Africa for Mo Ibrahim Index of African Governance; 1^st in Africa and 8^th for the Economic Freedom of the World; and 1^st in African Transformation Index.

On that score, Minister Sesungkur underlined that Mauritius has a relatively large Global Business Sector with aggregated assets valued at USD 686Bn which is approximately 50 times the size of its GDP.  Contribution of the Global Business sector to the GDP of Mauritius, he added, is estimated at 5.7% in 2018/2019 and has produced a year-on-year growth of 4.0%.

Mauritius, Mr Sesungkur pointed out, has always had a primary role in channeling capital and foreign direct investment to major economies during the past 25 years, and has built up a strong reputation as an International Financial Centre (IFC).  Many investors, he emphasised, have chosen the Mauritius IFC to conduct their business, while adding that the Afrexim Bank has decided to set up their headquarters for the Fund for Export Development in Africa (FEDA), in Mauritius.

Moreover, with regard to the taxing by India of 100% of capital gains realised by a Mauritius entity, the Minister indicated that whenever a Mauritius Fund disposes its shares in India, as per Article 13 of the amended DTAA between India and Mauritius and clearly stipulated in its Subsection 3A, it gains from the disposal of shares acquired prior to 1^st April 2017 and will be exempted of capital gains tax, irrespective of the date of disposal.   Our figures show that the value of direct investments in India through Global Business companies has remained more or less stable at USD 117.6 Bn as at June 2018, he added.

The Minister underlined that Government is well aware of the strategic importance of the Indian market for the future growth of our IFC and is gearing up efforts to be in the leading position.  Over the years, he observed, Mauritius has contributed significantly in respect to investment flows to India, remaining the second largest provider of investment into India, after Singapore.  Since April 2000 up to December 2018, the Mauritius IFC has contributed around 32% of the total Foreign Direct Investment (FDI) Equity inflows into India.

According to the Minister, it is essential for Mauritius to have a good visibility along with a strong credibility, trust and confidence in order to yield productivity. He emphasised that to resolutely pursue our ambition of becoming a world class IFC of repute, Government has brought vast reforms to build trust and confidence in the Mauritius IFC. In this context, to further enhance the image and reputation of the Mauritius IFC, Government has agreed to make a few additional refinements to the Partial Exemption System following observations made by the Code of Conduct Group (COCG) of the European Union to enable Mauritius restore its reputation as a compliant jurisdiction for the EU.

Furthermore, Minister Sesungkur reiterated Government’s aim to put adequate financial and other resources to drive future growth and development of our financial services sector.  He enumerated some key projects to this end, namely: the elaboration of a vision plan and in this context a Blueprint Report to envision the financial sector for the next 10 years that was launched in 2018; the enlistment of the services of Public Relations Firm Burson Cohne and Wolfe to improve the image and reputation of Mauritius IFC; and, the setting up of a Fintech Committee to build a competitive edge in the field of fintech and blockchain.

The Minister also recalled that after the establishment of the regional IMF (AFRITAC) Training Centre in Mauritius, in March 2019, the OECD has set up its Regional Centre of Excellence in Mauritius, which is a testimony of the trust that will surely enhance our international credibility as a Financial Centre.