Mauritius is also a paradisiacal destination for potential investors
It is now a well-known fact. The island of Mauritius, strategically located in the Indian Ocean, has a proven track record in terms of political stability. With a relatively strong economy - averaging a GDP growth of 5% over the past twenty years - it has recently introduced a number of reforms aimed at opening up the economy to attract foreign direct investment (FDI) as well as foreign, and national talents from the mauritian diaspora.
Over the years, the Republic of Mauritius has emerged as a competitive destination for various investors, offering a dynamic private sector - very receptive to joint venture collaborations - plus a qualified, skilled and competent workforce.
Today, according to Mr. Raju Jaddoo, Managing director of the Board of Investment (BOI), the country is "pursuing a multi-pronged development strategy based on a liberal and open investment policy in order to achieve sustainable growth in a fast globalising world economy".
During a recent visit to the island, Jacques-D?sir? Courtiade met with Mr. Jaddoo for the following discussion on the potential advantages of Mauritius as a paradise for investors.
Jacques-D?sir? Courtiade : What about the BOI, its "raison d’?tre "? When was it created and how is it doing?
Radu Jaddoo : The Board of Investment (BOI), established under the Investment Promotion Act 2000, is the national agency of the Government of Mauritius responsible for promoting and facilitating investment in Mauritius. As Mauritius opens to the world, transforming itself into a competitive global business platform, the Board of Investment has put at the service of the international business community a personalized range of services to attract international investment and talents in the country.
The dedicated team of professionals at BOI with strong industry expertise is here to provide professional guidance for successful business launches in Mauritius. The BOI has developed a strong partnership with the private sector by improving investment climate and encouraging innovation. Services provided by BOI are free-of-charge and include inter alia: counseling on investment opportunities in Mauritius, providing tailor made information for the setting up of a business in Mauritius, organization of customized meetings and visits, identification of joint venture partners, assistance with site locations and production facilities, as well as assistance for occupation permits, licenses and clearances
The Mauritius Board of Investment is viewed both locally and internationally as a strategic partner for any investor wishing to benefit from the thriving business environment of Mauritius.With headquarters in Mauritius, the Board of Investment has international offices in London, Paris and Mumbai to provide hands on assistance to investors interested to explore investment opportunities in Mauritius.BOI also works very closely with all the Missions of the Republic of Mauritius worldwide (High Commissions, Embassies, General Consuls and Honorary Consuls).
J-D.C : Mauritius is said to be a " paradise for potential investors ", why and what are the different business opportunities ?
R. J : Mauritius is recognized as a vibrant, robust and politically stable economy welcoming investors, self-employed entrepreneurs, professionals, with talents and skills to do business in all economic sectors. The 2006-07 Budget has opened a new chapter in the Mauritian history, outlining new strategies for economic development. Strategies based on mission critical reforms to graduate the economy from dependence on preferences to achieving global competitiveness. The Government has brought about sweeping changes in personal income tax, corporate income tax, registration duty, customs duties, excise taxation, motor vehicle taxation and tax administration. These changes is giving Mauritius an edge to make the transition from preferences to a globally competitive economy. The strategic policy thrust has thus created a conducive and internationally competitive investment environment with specific emphasis on the following: enhancing the investment and business climate, reducing the costs of doing business, improving the delivery system, ensuring the supply of adequate skilled human resources, improving the efficiency of our infrastructures, improving the Mauritius offering, and aggressive investment promotion
Strategically situated at the crossroads of major trade routes between Asia and Africa, Australia and Europe, and enjoying strong historical links with European Union and the USA, Mauritius offers ready access to a global market, through its memberships to key bilateral and multinational trade agreements, not to mention sourcing opportunities from the African subcontinent
The regional and international trade agreements confer preferential market access to local products into the markets of member and adherent countries in the European Union, USA and Africa, provided that the rules of origin criteria are satisfied. In most cases such preferences lead into quota free and duty free access.
It will be good to recall that these Trade Agreements include, 1) The Cotonou Agreement which links the European Union with ACP states, 2) the African Growth and Opportunity Act (AGOA) which offers unilateral trade preferences in the USA to country in Sub-Saharan Africa., 3) the Common Market for Eastern and Southern Africa (COMESA) which offers access to 11 African countries on a Free Trade Agreement basis and 8 on Preferential Trade Agreement basis, and 4) the Southern African Development Community (SADC) offers market access on a preferential trade basis to 14 countries in Southern Africa.
Mauritius pursues an open and liberal economic policy, welcoming investment in all the sectors of the economy, with a particular focus on the following sectors: hospitality & real estate development, information and communication technology, seafood and marine industry, land-based oceanic industry, biomedical and health services industry, knowledge industry, media and entertainment industry, financial services industry, textile & fashion industry, logistics and distribution, value added manufacturing and light processing, and biotechnology.
J-D.C : The island was known for its sugar technology and agronomy as well as for its textile and clothing industry. To-day, following the erosion of trade preferences linked to the reforms of the European Union’s sugar regime and the dismantling of the Multi-Fibre Agreement (MFA), these two industries have lost their competitive advantages. Now the government has opted for a new strategy based on diversification. How do you see the future of the mauritian economy and what will be the main pillars of development?
R.J : The budget 2006/2007 has set the scene for major reforms across the economy to revitalise existing sectors and facilitate the emergence of new pillars with the aim of creating a minimum of 50,000 jobs over the next five years, doubling per capita income to around USD 10,000 in a decade and to reducing vulnerability to external shocks. The economic base is thus being broadened to set firm foundations for more economic pillars such as the seafood and aquaculture hub, property development, the land based oceanic industry, the know-ledge and the medical hubs, the pharmaceutical cluster together with the expansion of tourism to hospitality and
J-D.C : What is the importance given by the BOI to the Information and Communication Technology (ICT) sector? To what degree would you say that the Ebene Cybercity is already a success?
R. J : The BOI fully supports and implements the vision of the Government of Mauritius in unlocking the potential of the ICT sector for Mauritius. To date over 150 companies are currently operational in the ICT sector, among which are some flagship companies-Infosys, Microsoft, Accenture, Teleforma. Endowned with varied scenery ranging from idyllic sun and sea spots to luxuriant greens, a cosmopolitan and ethnically diverse population and an increasing number of professional cast and new crew Mauritius also envisions to become a regional Media and Digital Entertainment hub. In 2006 the ICT sector registered a 38% growth and is expected to improve its performance in the coming years. The industry offers both maturity and depth. Opportunities exist for, i) value-added Business Process Outsourcing (BPO) activities in financial and accounting, hospitality and tourism, health and medical, Human Resources, legal, ii) call and data-processing centres, iii) Disaster Recovery and Business Continuity Planning, and iv) software development.
The Ebene Cybercity
The Eb?ne CyberCity is the outcome of Government’s policy to spearhead the development of Intelligent Buildings and Business Parks in Mauritius and is the role model for future ICT-connected communities in this part of the world. Situated in the picturesque neighborhood of Eb?ne, at just 15 minutes drive from the capital city and less than an hour’s drive from the International Airport, the CyberCity provides a very high quality environment to position Mauritius as a regional centre of excellence for ICT
The Cyber Tower I is fully booked and the 70 % of the floor space of Cyber tower II has already been reserved. Many private sector operators are also locating their offices in the Cybercity. At present the cyber city employs over 3000 people.
J-D-C: Mauritius is an island and by definition, is surrended by an immense surface of sea water. Beyond its possibility to become an " ideal logistics and distribution platform ",- due to its location in the Indian Ocean - how do you see the future of the seafood and marine industry? If possible could you also elaborate on certain figures concerning on-going/future investments?
R.J : The Mauritius seafood sector is more buoyant than ever and has the ideal conditions to attract further investments. The sea food sector has already attracted international seafood players from countries like Spain, Malaysia, Japan, USA, Sri Lanka and France and received investments of over MRU* one billion in 2006 as compared to MRU525 million in 2005. The strategy of the seafood hub is focused on the development of value added fisheries and seafood related sectors. In line with this strategy, investment opportunities in the following areas are encouraged: fishing, tuna transshipment, seafood processing activities, aquaculture plus ancillary services (including ship chandling, bunkering, vessel husbandry, ship agency, ship building and repair and net assembly and repair. Some key figures depicting the sector are as illustrated in table 1 below:
J-D.C : In our last issue we dealt with the new concept of the Integrated Resort Scheme (IRS). To-day, we would like you to tell us more about an another concept, known as " bringing out value from deep Indian Ocean Water " ?
R.J : Mauritius is ideally positioned to exploit the deep sea water currents that circle the globe, moving massive undercurrents of 2,500-year-old sea water of the highest purity, free of pollutants, rich in important minerals and nutrients and with medicinal, pharmaceutical and therapeutic properties.
A Unique Business Venture in a Pristine Location
The concept of exploiting the deep-sea currents of the Indian Ocean originated from the Mauritius Research Council. This concept is today viewed as a potential emerging sector of the economy capable of generating investment and jobs in desalinated water bottling, aquaculture, air conditioning, cosmetics, thalassotherapy and healthcare products. In line with the objective of the government to accelerate the implementation of this project, the Mauritius Land-Based Oceanic Park Ltd, a private state-owned company, responsible for extracting the five-century old pure deep sea ocean water and developing the park that will shelter this industry, has been set up.
Recent scientific analysis of the physical, chemical and biological characteristics of the deep (1,000m) water off the coast of Mauritius, has established that the water is very pure, rich in mineral and of high nutrient content as well as being cold (6° C). Carbon dating techniques show that the water is about 5 centuries old, which explains its purity and freedom from surface pollution. These unique properties allow a multitude of business opportunities to bring about value from the water of the deep Indian Ocean.
Many projects can be derived from this concept of exploiting the deep-sea currents in our region. First, we have in mind to encourage the production of desalinated mineral water. By far, this is the most lucrative business venture. Through reverse osmosis, selected salts are removed from the deep water, leaving behind mineral water of the purest quality that is in high demand in Japan. Then, the high degree of purity, the nutrient content and the adjustable temperature of the deep-sea water make it ideal for high-value aquaculture, while on the other hand, pearl of the highest quality can be cultured in a controlled deep-sea water environment.
Further more, the healing and therapeutic attributes of deep-sea water have been known for centuries. Being a prime tourist destination, Mauritius is ideally located to exploit this unique quality of our deep-sea water and develop thalassotherapy services. The production of Pharmaceuticals and Cosmetics can also be envisaged. The presence of special chemical elements in the deep-sea water is indeed an important source of natural ingredients for the development of pharmaceutical products. Also, the characteristics of the deep-sea water provide an ideal environment for the growth of particular species of seaweeds which constitute important raw materials for biomedical and cosmetic products.
Finally, high-end products for ornamental aquariums, such as seahorses and sea snails, which are normally difficult to cultivate outside oceanic conditions, have been shown to constitute thriving businesses when carried out in a deep-ocean water condition, while it is also agreed that the coldness of the deep-sea water is ideally suited to replace the electrical chillers in conventional air-conditioning systems. This could lead to as much as 40% savings in the electricity bills of most hotels and coastal buildings in Mauritius.
J-D.C : Mauritius as an international financial services centre ? Is that idea becoming a solid reality or do you face difficulties to convince potential clients and professionals?
R.J : Mauritius ambitions to become the regional business and financial hub and consolidates its high reputation on the international front through a regulatory and legislative framework based on best practices for global business activities. The country is a clean jurisdiction offering quality financial services and competitive advantages for its Global Business Companies, for example, no tax on capital gain and dividend, no exchange control, free repatriation of profits and competitive as well as professional trust services. (See some statistics depicting the growth of the financial services sector are as illustrated in tables II and III )
With the enlargement of the double taxation treaty network which Mauritius has, and the deepening of the outsourcing process, we are confident that the Mauritian Financial services sector is bound to grow into a more solid pillar of our economic strategy. It is interesting to know that the sector already constitutes over 10 % of GDP and is poised to grow further.
J-D.C. What about the formalities to set up a company on the island?
R.J : The formalities to set up a company are as follows. Firstly, a company name should be reserved by filing a notice of reservation of name to the Registrar of Companies prior to incorporation., secondly, the company should be incorporated .Upon issuance of a certificate of incorporation by the Registrar of companies a unique business registration number will be given to the company which will be common for all communication with the local authorities. However companies may register with the Board of Investment (BOI) for assistance and support to the implementation of their projects or business. Indeed, forms and detailed information are available on the web site of the Registrar of companies:http:// www.gov.mu/portal/site/compdivsite
J-D.C : What facilities do you offer for the investor to get a work and residence permit?
R.J : An Occupation Permit is a single document combining a work and residence permit. The occupation permit allows an eligible non-citizen to reside and work in Mauritius for a maximum of three years. In fact, three modes of entry are available for working and living in Mauritius: either an investor, a professional, or a self-employed.
However, each one of the three categories may apply for an Occupation Permit if the following conditions are met.For the Investor, the proposed business activity should generate an annual turnover exceeding MUR 3 million. The professional, under a contract of employment, should have a basic monthly salary of MUR 30,000, while in the case of a self-employed person, the annual income from the proposed business activity should exceed MRU 600,000.
The BOI also assists in the issuance of residence permit to ’Retired Non-citizens’. This permit allows an eligible retired non-citizen to reside in Mauritius. He should register with the Board of Investment and undertake to transfer to his/her local bank account in Mauritius at least USD 40 000 annually, or its equivalent in convertible foreign currency.
J-D.C . Does a work and residence permit lead to a Mauritian passport/nationality?
R.J.: The occupation permit does not lead to a Mauritian passport/nationality. However non-citizens holding an Occupation Permit under the categories of Investor and self-employed, may apply for Permanent Residence status at the expiry of their Occupation Permit under the following conditions: the business activity of the Investor should have generated an annual turnover exceeding MUR 15 million during the first 3 years. Concerning the self-employed, his business activity should have generated a gross annual income exceeding MUR 3 million during the first 3 years. If approved the Permanent Residence permit shall be valid for a period of 10 years as from the date of expiry of the Occupation Permit and makes the holders of a permanent residence permit eligible to acquire property for residential purposes.
Interview done by Jacques-D?sir? Courtiade