Conduits of Capital

to investors such guarantees as equitable protection /
treatment of investments; equitable treatment of returns of
investors; free transfer of monies relating to investments and
returns; expropriation protections against nationalization of
investments; 49 and the “most favoured nation” status with
respect to treatment of investments and compensation
for losses in the cases of war or armed conflict. 50
Moreover, Mauritius’s absence of exchange control
restrictions facilitates non-domestic investments made
by PE funds as well as investment in PE funds made by
international investors.
PE funds in Mauritius can be structured as a tax resident
company with a Global Business License Category 1
(GBC1) and thus realise the benefits of Mauritius’s DTAAs
and IPPAs. 51 As noted by Roddy McKean, then a partner at
South Africa-based law firm Webber Wentzel, most other
countries in Africa lack the tax certainty that Mauritius offers PE
funds. 52 Investors find tax certainty to be crucially important,
as, for example, India-domiciled funds have suffered from
an unstable tax policy / framework for both the fund and
the investors. 53
Mauritius also has overwhelming advantages over the SSA
region with respect to its general business environment.
Of particular importance to domicile choice, Mauritius
appears far more attractive compared to the SSA regional
average with respect to credit access, protection of minority
investors, ease of tax payments, and contract enforcement
(see Exhibit 2).
3. Geography and organisational membership
From a business perspective, then, Mauritius has the
qualities of a developed market with substantial tax
advantages—yet is in a proximate time zone to SSA, India,
and China. In fact, geography becomes another advantage.
Mauritius’s collective membership in regional organisations
(e.g., Southern African Development Community (SADC)
and the Common Market for Eastern and Southern Africa
(COMESA)) confers additional economic benefits. 55 For
example, PE investors making deals in COMESA-member
States could get approval of merger filings from the newly
established Competition Commission (CCC), which acts as
a one-stop-shop for cross-border mergers and acquisition.
By avoiding the need to file with competition regulators in
individual member states, a PE fund can substantially cut
the costs and time involved in transaction approvals. 56
4. Country stability
PE fund managers also seek a secure environment for their
funds. According the World Bank’s Worldwide Governance
Indicators (WGI), Mauritius is far more attractive than
the SSA regional average, as well as South Africa, for
all six governance indicators—voice and accountability;
political stability and the absence of violence; government
effectiveness, regulatory quality, rule of law, and control
of corruption. 57 Of particular importance, we note that for
2013 Mauritius’s percentile rank (0 to 100; 100 being the
best) from a sample of 215 countries is 78 with respect
to “political stability and absence of violence / terrorism,”
relative to 44 for South Africa, and 34 for the SSA regional
Exhibit 2:
World Bank Doing Business 2015 rankings (1-189, 1 = best) for Mauritius and the SSA regional average 54
DOING BUSINESS INDICATOR MAURITIUS RANKING SSA REGIONAL AVERAGE
Getting Credit 36 122
Protecting Minoring Investors 28 121
Paying Taxes (i.e., tax rates and
administrative burden) 13 129
Enforcing Contracts 44 121
Note: Doing Business rankings are benchmarked to June 2014.
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