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Mauritius offers Africa investment route for Indian firms

NEW DELHI: Having been a preferred route for foreign investors coming to India for a long time, Mauritius now wants Indian companies to use its platform for their outward investments to Africa.

Presenting it as a 'gateway to Africa' for investments in various sectors, a high-level delegation from Mauritius, comprising policymakers and industry players, has come here to meet industry bodies and other stakeholders to apprise them about the benefits of the 
Indian Ocean island nation.

"We have recently seen an enormous increase in the number of 
global businesscompanies being incorporated in Mauritius and targeting Africa," Mauritius' integrated financial sector regulator FSC (Financial Services Commission) Chairman Marc Hein told PTI here.

Hein, who is part of this delegation, said "this increase demonstrates clearly the reality that Mauritius is now truly an important gateway to investments into Anglophone and Francophone Africa."

The term 'Anglophone Africa' is used for African countries with large English-speaking population and these include Gambia, Sierra Leone, Liberia, Ghana, and Nigeria.

The Francophone 
Africa is a contiguous area in West Africa and Central Africa, as also Madagascar and Djibouti, where French-speaking population is high.

Mauritius itself is a multi-lingual country with a large part of its working population speaking English, French and Hindi among other languages.

Hein said outward FDIs by Indian companies into Africa, by using Mauritius, would be a natural progression for the age-old ties between the two countries, which have shared very close economic ties for many years.

The Mauritius government's investment promotion agency, Board of Investments (BOI) Director Shamima Mallam Hassam also said that there were immense opportunities for Indian companies in Africa.

"As Africa continues to attract attention of global investors, traders and private 
equities, we see an increasingly important role for Mauritius to play as the ideal and preferred gateway and access centre to the continent," she said.

"To boost the attractiveness of Mauritius as a manufacturing and trading platform for Africa, the government has introduced a new measure whereby manufacturing companies which are producing in Mauritius for exports to Africa can enjoy Freeport Company status, thus benefit of the duty free and quota free market access to Africa," Hassam added.

According to Mauritius officials and industry leaders, the country can become a stepping stone for Indian corporates into Africa, as it offers global investors an enabling business and international climate to both manage risks and optimise returns.

According to Board of Investment (BOI), about 24 per cent of new global business investment funds incorporated in Mauritius targeted the African markets for the period 2009-2012. This ratio has further gone up to 53 per cent so far in 2013. 

A large number of Indian companies are already present in Mauritius, an African nation in Indian Ocean, which has been very close to India for a long time. The persons of Indian origin are estimated to account for close to 70 per cent of the country's total 1.3 million population. 

A host of global firms, including those from the US and Europe, have traditionally been using Mauritius to route their investments in India to benefit from an Indo-Mauritius Double Taxation Avoidance Agreement (DTAA) in force since 1983. 

The two countries are currently in talks to revise the treaty to ensure that it is not misused for any money laundering or round-tripping activities. According to BOI, India is the second most important trading partner of Mauritius and accounts for about one-fourth of total imports done by Mauritius. 

Besides, Mauritius offers a host of benefits to the companies looking to invest in Africa, given its Investment Promotion and Protection Agreements (IPPAs) and DTAAs with various African jurisdictions. 

Mauritius also allows Indian and other companies to use its ports free of taxes if such entities export manufactured goods equivalent to 95 per cent of their annual turnover and their 80 per cent of total exports is to Africa.