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PROMOTION

Destination
An exciting asset class for South Africans
Mauritius is one of the few countries in the world where you can benefit from a simplified and rationalised income and corporate tax regime. In addition, there is no tax on dividends from Mauritian resident companies, no capital gains tax, no inheritance tax and no stamp duty, writes Jessica T. Naga.

are now feeling more confident about investing there as opposed to other emerging markets. Healthy investment climate Mauritius has impressive international rankings in many prominent surveys. Mauritius ranked 27th out of 178 countries in the World Bank “Doing Business Survey” 2008 and 24th in the 2009 one, ranking first in the sub-Saharan African region in both years. The Doing Business Survey ranks economies based on 10 indicators of business regulation that track the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes and closing a business. Mauritius ranked 18th out of 157 countries in the World Index of Economic Freedom 2008, published jointly by the Heritage Foundation and the Wall Street Journal. Mauritius is ranked 60th out of 131 countries in the World Economic Forum Global Competitiveness report 2008. Stock Exchange of Mauritius (SEM) gains access to the Dow Jones Index The SEM increased its visibility on the international stock exchange by integrating the very selective Dow Jones Wilshire Global Index from 1 October 2008. A decision was taken to this effect by the Dow Jones and Wilshire Associates. The implications of such a decision for Mauritius-listed companies are extremely positive and it is expected that their shares will become far more accessible to foreign investors interested in the Dow Jones. Qatar, Oman and the United Arab Emirates are the other three countries to have been granted this distinction along with Mauritius. An asset class for South Africans The government has been very careful about opening the island to acquisitive foreigners. Now, for the first time since its independence, there are schemes

Mauritius
the widely spoken mother tongue. The government has an ambitious vision and strategy, which is for Mauritius to become a duty-free island by 2010 – giving Hong Kong and Singapore a run for their shopping-tourism money. Good governance On 6 October 2008, the Mo Ibrahim Foundation released its latest ranking for governance quality in respect of sub-Saharan African countries. Importantly, this index is not a snapshot of current developments, but an accurate analysis of trends. The Ibrahim index uses authoritative data from the year being appraised and enables performance to be measured against the previous year in five critical areas, namely: safety and security; rule of law; transparency and corruption; participation and human rights; and sustainable economic opportunity and human development. For the second year in a row, the island nations of Mauritius, Seychelles and Cape Verde held the top three places in the overall ranking, with Mauritius being placed first in both years. Mauritius has attracted significant international attention in recent years. This island, tropical, small, friendly and both English and French speaking, with its pristine beaches, warm seas, luxury hotels, plantation houses and quaint markets, has long been enjoyed by South Africans. An increasing number of South Africans

whereby foreigners can purchase freehold title to residential property, which entitles them and their immediate family to permanent residency in Mauritius. There is also a scheme that allows non-citizens to purchase property for business purposes, for their own use or for leasing. Buying property in Mauritius is fast becoming a serious choice for international investors. Mauritius as a dream destination The country has long been a dream destination for holidaymakers and today this dream has become a reality for many foreigners who bought property, settled on the island and/or invested in other assets both in Mauritius and internationally via Mauritius, given the large number of double taxation treaties held by the nation. There is a wide variety of investment opportunities in Mauritius, and the Dale Capital Partners Group (having a presence in both South Africa and Mauritius) would be happy to assist you whatever your requirements may be.

o suggest that any country or economy in the world has been left unscathed as a result of the global financial crisis would be foolish. Having said that, it does seem that certain economies/countries have not been as badly affected at this stage. A high-level study suggests that this exists in the emerging markets and its smaller nations. Mauritius appears to be one of these countries, and whilst caution must be exercised when making any investment choice or decision, there are numerous positives about Mauritius as an investment destination for South Africans. Successful governmental strategies Historically, the main source of income for the island was sugar. Plantations were founded at least a century ago, and for generations the island lived comfortably off the income from this crop. But, following the collapse of the sugar market, the government embarked on an ambitious plan to become the business hub of the Indian Ocean, successfully attracting new

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business in banking, insurance and fund and asset management and actively began pursuing technology-based business. Mauritius is one of the few countries in the world where you can benefit from a simplified and rationalised income and corporate tax of 15% for domestic activities. In addition, there is no tax on dividends from Mauritian resident companies, no capital gains tax, no inheritance tax and no stamp duty. The strategy of the government is working and the Mauritian economy is booming. At the end of 2007, there was a 5.6% growth in gross domestic product (GDP). Private investment as a ratio of GDP is 18%, its highest level in years. Now diversified, its economy has seen active industrial, financial and tourist sectors replacing sugar exports. It has the second highest GDP in Africa, with annual growth of around 5% to 6% a year. Infrastructure has been improved considerably over the past 10 years. Attracting foreign investment has already paid off, with over 9 000 foreign entities having bases or branches there. France is the major trading partner, attesting to the close ties between the two countries. While the French made up more than half the island’s holiday visitors last year, South Africans accounted for 7%, according to government statistics. English is the official language and is spoken in all the commercial and tourist areas, though Creole French is

Jessica T. Naga is a qualified barrister in England & Wales and Mauritius. She is the Commercial Director of the Dale Capital Partners Group.

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