The objective was to better situate the threats that await us after the emergence of Gujarat International Finance Tec-City (GIFT City) as a major competitor for direct investment in India.
John Chung, Managing Partner of KPMG Mauritius, pointed out that despite the diversification of the global business sector in terms of destinations in recent years, “the Mauritius-India corridor remains key for the jurisdiction as well as for KPMG in Mauritius”. And to emphasize: “Indeed, India still represents about half of our funds business by number, and substantially more by value. India remains the destination par excellence for Global Business operators. “Despite all our attempts to diversify, India still represents more than 50% of our investment funds. Mauritius therefore has everything to lose if offshore companies move towards GIFT City.
The GIFT City presents itself as the new epicenter of global finance and technology, he continued, already ranking 67th in the Global Financial Center Index 2023, while Mauritius is in 81st position. "Clearly there are big threats and hopefully opportunities too, for the Mauritius International Financial Centre," said John Chung. The debates continued with the participation of Manoj Kumar Vijai, Samade Jhummun, Chief Executive Officer (CEO) of Mauritius Finance, Wasoudeo Balloo, Tax Partner at KPMG Mauritius and KG Subramanian, Managing Director and Chief Finance Officer (CFO) at Nexus Venture Partners in Mumbai.
Launched in 2015 by the Indian government, GIFT City offers numerous tax and other incentives, and is beginning to attract international finance giants. Moreover, multinationals such as HSBC, JP Morgan, Standard Chartered and KPMG have already set up their quarters there. How do we prevent offshore companies based in our jurisdiction from turning to GIFT City?
The Managing Director of Nexus Venture Partners, KG Subramanian, who has chosen to operate in Global Business in Mauritius for two decades, expressed his confidence in the Mauritian jurisdiction, citing the operating costs and the level of service offered by the Mauritian professionals. "Strengths that took years to put in place and which today allow Mauritius to have a certain advantage over these emerging financial centres," he said.
KG Subramanian is of the opinion that Mauritius will continue to do well, at least for now. But he pointed out, however, “that it is important that our regulations are fixed for the long term in order to avoid unexpected and unfavorable changes, which international investors hate”.
Samade Jhummun clarified, for his part, that the recent figures available in terms of investment flows to India from Mauritius show a worrying curve, since Mauritius has lost its first place and is in third position: "We We are more than ever called upon to work together with the authorities, including the FSC and the MRA, to find the right leads in order to remedy this situation."
For his part, Wasoudeo Balloo said he still believes Mauritius can still pull itself out "if we act quickly on upcoming changes, such as the global minimum tax, which would make tax benefits less attractive than 'they currently are'. For him, Mauritius will continue "to present advantages over GIFT City on a few products, including bonds".
Painting a picture of the current situation in the sector, the CEO of Mauritius Finance affirmed that the competition is intensifying and that “Mauritius no longer has unique advantages with India”. He adds that the number of structured funds in our jurisdiction has declined in recent years. “The jurisdiction is in direct competition with competitors like Singapore and Dubai. Where we can – and where we must – make a difference is in terms of Cost of Doing Business, Ease of Doing Business and Tax Certainty. This is all the more so as it is now more complicated to attract new customers.
Mauritius must also focus fully on promoting its image as a financial center, continued Samade Jhummun. And “change the perception” that the jurisdiction is a tax haven. “There have been a series of articles on Mauritius recently where the country is always referred to as a “tax haven”. But we have never been a tax haven. So, we believe that the financial center should be promoted all year round instead of correcting the situation only when negative articles appear in the press. "
During question time, Rama Sithanen, Chairman of the Apex group, one of the leaders in the Global Business sector, expressed his concerns about the severe shortage of personnel, while the population is aging and the migration of young people continues. These elements will only exacerbate a situation which, according to him, “cannot be resolved anytime soon and which risks weighing heavily in the balance”.
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