1. Business Through Mauritius
Practical Aspects of Setting-up and Operating a Business from the Mauritius Financial Centre

2. Introduction & Presentation Overview
Problems Facing the South African Businesses
How Business Achieve Growth in New (Frontier) Markets
How Mauritius as a Financial Centre Adds Value?
Stacking-up Mauritius as a Base for Businesses
Practical Example –Family Business using Mauritius for Commercial Property Purchase
Practical Example – Business Group Investing in Africa via Mauritius
Key Risk Management - Legal, Tax and Exchange Controls
Conclusion

3. Problems Facing the South African Businesses
Cross-border business - structural Impediments
Business competitiveness
Regulatory or exchange control “red-tape”
Legal constraints

4. How Businesses Achieve Growth in New (Frontier) Markets?
Family Businesses
Corporate
Investment on global markets
Exposure to foreign currency and assets
Estate and succession planning
Asset protection
Product/service expansion or geographic market expansion beyond national borders
Centralising functions and risks on regional basis
New tax opportunities and risks
Aligning current tax strategy and planning with corporate expansion strategy and planning
Legal planning –entity, contracts, host country laws

5. How Mauritius as a Financial Centre Adds Value?
Favourable time-zone
Stable political, investment and banking environment
Attractive fiscal policies
Double Taxation Avoidance Treaties
No exchange controls
Administrative ease of doing business
no tax on dividends, interest or royalty income and no withholding taxes
low or no income tax, no stamp duties and no capital gains tax
free choice of functional currency
open stock exchange
reliable infrastructure
availability of qualified labour force
open policies for expatriate professionals
enabling laws allowing for access to key region economic blocs, tax treaties and investment promotion treaties to reduce withholding taxes, customs duties and taxes on capital
well established company and corporate law

6. Stacking-up Mauritius as a Base for Businesses
Top Ranking in Africa on Global Benchmark Indices
Closest recognised International Financial Centre to Africa
Well-regulated business jurisdiction - international standards and best practice.
Close cultural and commercial ties with Africa, Europe, India and China, from which its diverse population hails.
Signatory to major African conventions and a member of major African regional organisations - preferential access to African markets.
A treaty‐based jurisdiction

7. Stacking-up Mauritius as a Base for Businesses (cont.)
Investment Promotion and Protection Agreements (IPPAs) with a number of African countries (six of which are in force - Burundi, Madagascar, Mozambique, Senegal, South Africa and Tanzania) which provide, amongst other things, for free repatriation of investment capital and returns, guarantee against expropriation, most favoured nation rule with respect to treatment of investment, and compensation for losses in case of armed conflict.
Economic, political and banking stability.
Good international telecommunication service.
An abundance of professional service providers at a relatively low cost.
An educated and multilingual workforce, with English and French being the main business languages.

8. Stacking-up Mauritius as a Base for Businesses (cont.)
Hybrid legal system consisting of British common law practice and the French Napoleonic Code. The Privy Council of the United Kingdom is the final court of appeal.
Modern and flexible company and commercial legislation which is essentially based on British common law.
The Financial Services Commission of Mauritius oversees the regulation of the non-banking financial services industry.
Mauritius is not part of continental Africa. This limits spill-over effects of any potential neighbouring conflicts which are prevalent in certain regions in Africa.
Offers a wide variety of vehicles that may be adapted to maximise African investment opportunities, including limited partnerships (of particular interest in the private equity context), protected cell companies, trusts and foundations.

9. Wide Tax Treaty Network
Africa
In force
Botswana
Kenya
Lesotho
Madagascar
Mozambique
Namibia
Rwanda
Senegal
Seychelles
South Africa
Swaziland
Tunisia
Uganda
Zimbabwe
Zambia
Ratifying
Congo
Egypt
Gabon
Nigeria
 Signing
Ghana
 Negotiating
Algeria
Burkina Faso
Lesotho
Malawi
Tanzania
Morocco

10. Tax Treaties of Other IFC’s Comparison
Number of tax treaties with Africa
South Africa (not IFC) 21
Mauritius 15
Netherlands 10
UAE 6
Botswana (not IFC) 5
Switzerland
Seychelles 4
Malta
Singapore 2
British Virgin Islands
Isle of Mann, Jersey & Guernsey

11. Presence of Global Banking

12. Proximity to Market

13. Practical Example – Family Property Business (South Africa)
A South African family establishes a Mauritian Foundation and a Category 1 Global Business License Company (GBC1) holding company.
The family capitalises the foundation with loans at interest.
The Foundation injects debt and equity in a GBC1
The GBC1 acquires commercial property and earns rental income.
Depending on location of investments in a treaty jurisdiction, withholding tax on dividends and interest can be ultimately reduced to between 0%-15%.
Structure cannot be used to re-invest into South Africa
0% - 3% tax at Mauritius GBC1 level with no withholding taxes on dividends to the foundation.
Foundation is tax exempt
Repayment of loans by Foundation not taxable.

14. Practical Example – Corporate Group (South Africa)
A South African business (parent) establishes a Mauritius regional holding company.
Mauritius regional holding company acquires multiple subsidiaries in the Southern Africa and engages directly in investment, financing and/or licensing activities.
Open Mauritian offices and hire local and ex-patriate personnel
Depending on location of subsidiary in a treaty jurisdiction, withholding tax on dividends, interest and royalties can be ultimately reduced to between 0%-15%.
0% - 3% tax at Mauritius company level with no withholding taxes on dividends to the ultimate parent.
No capital gains on exit at subsidiary company level.
Exempt dividends repatriated to South African parent

15. Key Risk Management – Legal, Tax and Exchange Control
Tax avoidance
Transfer pricing
Controlled foreign company
Attribution of profits
Exchange Controls

16. Conclusions

17. Thank You & Contact BTG Management Services (Mauritius) Limited
1st Floor, Building. B, Nautica Commercial Centre
Royal Road, Black River, Mauritius
Tel:
Fax:
Boris Pelegrin