Since introducing far-reaching tax and regulatory reforms at the start of 2019, Mauritius is fast becoming an offshore financial hub of substance. The European Union (EU) has removed the island country from its tax haven ‘grey list’, and it has enjoyed a meteoric rise in ranking in the World Bank’s annual ‘ease of doing business’ report.
Sanlam Trustees International has since 2011 become established as one of the leading trust and corporate services companies in Mauritius. We offer independent trust and company management services to private, corporate and institutional clients around the world.
Why Mauritius? Despite past criticism of the country’s tax regime and so-called financial secrecy, the Mauritian government is committed to maintaining and growing its reputation as a financial centre of substance, and has introduced sweeping reforms to enhance its competitiveness and transparency. Furthermore, Mauritius is a stable democracy, with a well-developed, respected legal and regulatory framework.
OFF THE GREY LIST
In 2017 and 2018, both the EU and the Organisation for Economic Co-operation and Development (OECD) expressed concern about the regimes of a number of tax havens, including Mauritius. In particular, they labelled this country’s deemed foreign tax credit of Category 1 Global Business Companies and the tax regime for ‘less transparent’ Category 2 Global Business Companies as ‘potentially harmful’ tax practices. Mauritius was placed on the EU’s ‘grey list’ of tax havens in December 2017 (the grey list is for countries that have been put on notice but haven’t yet been blacklisted as they’ve committed to major regime reforms).
Since then, Mauritius has been working hard to find a way to ensure the global business sector falls in line with EU and OECD requirements, and to boost its image as a transparent and compliant jurisdiction while still retaining a competitive advantage. The country’s new global business regime was announced in 2018 and came into effect at the start of 2019.
The result is that on 10 October 2019, Mauritius was removed from the EU’s tax haven grey list – along with Switzerland, Albania, Costa Rica and Serbia – which means the EU is comfortable that Mauritius has delivered on its commitments. For the island country, this is a huge reputational boost. There’s now no reason why any financial institution or enterprise should refuse to do business with a Mauritian company.
EASE OF DOING BUSINESS
Mauritius has been climbing the rankings in the World Bank’s annual ‘ease of doing business’ report, now ranking 13th out of 190 economies. The rise has been meteoric – while 2016 saw Mauritius in 49th place, by 2017 it was ranked 25th, and by 2018 it had climbed to 20th. To place this significant achievement in context: Australia is ranked just behind Mauritius in 14th place, with Germany taking the 22nd spot. The next African country on the list is Rwanda at 38, with South Africa languishing at 84 for various reasons, not least of which is this country’s power supply issues.
To obtain a rating, the World Bank looks at 10 indicators that measure the ease of doing things across the life cycle of a business, including opening a business, obtaining funding, finding premises, and operating in a secure business environment.
In our view, the major changes initiated by the Mauritian government reflect its ongoing commitment to improvement and modernisation of the economy as a whole, while keeping the country compliant with OECD and EU regulatory requirements. We believe Mauritius is fast becoming the jurisdiction of choice for offshore tax structures and estate planning, and as a wealth management centre that is truly the ‘gateway to Africa’.
Sanlam Private Wealth (Pty) Ltd, registration number 2000/023234/07, is a licensed Financial Services Provider (FSP 37473), a registered Credit Provider (NCRCP1867) and a member of the Johannesburg Stock Exchange (‘SPW’).
All reasonable steps have been taken to ensure that the information on this website is accurate. The information does not constitute financial advice as contemplated in terms of FAIS. Professional financial advice should always be sought before making an investment decision.
Participation in Sanlam Private Wealth Portfolios is a medium to long-term investment. The value of portfolios is subject to fluctuation and past performance is not a guide to future performance. Calculations are based on a lump sum investment with gross income reinvested on the ex-dividend date. The net of fee calculation assumes a 1.15% annual management charge and total trading costs of 1% (both inclusive of VAT) on the actual portfolio turnover. Actual investment performance will differ based on the fees applicable, the actual investment date and the date of reinvestment of income. A schedule of fees and maximum commissions is available upon request.
COLLECTIVE INVESTMENT SCHEMES
The Sanlam Group is a full member of the Association for Savings and Investment SA. Collective investment schemes are generally medium to long-term investments. Past performance is not a guide to future performance, and the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available on request from the manager, Sanlam Collective Investments (RF) Pty Ltd, a registered and approved manager in collective investment schemes in securities (‘Manager’).
Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in a portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of a portfolio and an investor will differ depending on the initial fees applicable, the actual investment date, date of reinvestment of income and dividend withholding tax. Forward pricing is used.
The performance of portfolios depend on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-dividend date. Portfolios may invest in other unit trusts which levy their own fees and may result is a higher fee structure for Sanlam Private Wealth’s portfolios.
All portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No. 45 of 2002. Funds may from time to time invest in foreign countries and may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information. The manager may close any portfolio to new investors in order to ensure efficient management according to applicable mandates.
The management of portfolios may be outsourced to financial services providers authorised in terms of FAIS.
TREATING CUSTOMERS FAIRLY (TCF)
As a business, Sanlam Private Wealth is committed to the principles of TCF, practicing a specific business philosophy that is based on client-centricity and treating customers fairly. Clients can be confident that TCF is central to what Sanlam Private Wealth does and can be reassured that Sanlam Private Wealth has a holistic wealth management product offering that is tailored to clients’ needs, and service that is of a professional standard.