Xavier-Luc Duval, Mauritius's deputy prime minister and finance minister, was in London in mid-June at a conference to promote the island as a stable and secure centre for business.
Companies registered there are treated as Mauritian and benefit from a network of double taxation avoidance agreements (DTAAs), including 13 with African countries such as Kenya. Nigeria's DTAA is due to be signed in early August and agreements with Egypt, Malawi and Ghana are in the pipeline, according to the Board of Investment. There are also 11 investment promotion and protection agreements, also known as bilateral investment treaties, with African countries, which also apply to Mauritius-registered firms or funds investing in Africa.
Mauritian tax rates are low and offshore companies pay 3% or 0% tax. Mauritius is on a tax haven 'white list' operated by the OECD, although this list has been criticised by transparency campaigners, including the Tax Justice Network.
Indian politicians claim that the country's DTAA with Mauritius allows opaque financial flows to enter the country, and the two sides are renegotiating the DTAA to make oversight more robust. The legal system combines French and British traditions, making lawyers able to work with most legal systems in Africa, and the London Court of Arbitration is establishing an international centre in Mauritius.
At least half of the private equity funds investing in Africa are based there, including Aureos, Actis and Bob Geldof's 8 Miles. The Stock Exchange of Mauritius has started to list offshore companies investing into worldwide projects, including in Africa, backed by a raft of new laws and regulations.
"We are encouraging more substance and linkages to the local economy," Ken Poonoosamy, the managing director of the Board of Investment, told The Africa Report.
Investment tentacles
Mauritian companies are already pioneering the way into the rest of Africa. After centuries of success, many find growth prospects limited at home – 4% economic growth is forecast in Mauritius this year, low by African standards but still out of reach for most developed countries.
In Zimbabwe, Kenya, Namibia and South Africa, Mauritian firms invest in sugar, financial services, and information and communications technology. Newer projects include hotel development in Congo-Brazzaville.
Jacques d'Unienville, chief executive of Omnicane, said the company is developing a $200m complex in Kenya to produce sugar, energy and alcohol. The group is planning a $15m hydropower project in Rwanda and looking for projects in Zimbabwe and Zambia, "the best countries in the world to grow sugar," according to D'Unienville.
Backed by Mauritius's 250 years of sugar production and 50 years of producing power from bagasse, Omnicase wants to export its expertise. It is raising money for its expansion on the Mauritian stock market in a Rs3bn ($99m) bond programme, with the first Rs1bn due to be raised in July, subject to regulatory approval.