NEW DELHI, July 21: Battling a perception of being a place for money laundering activities, Mauritius says it is rather the strictest jurisdiction in the world to check round-tripping of funds and all investment headed towards India needs to go through a stringent due diligence process.
“As long as India investments are concerned, the regulatory requirements are much more complicated. If someone comes and says we want to invest in India, then we have very stringent licensing conditions,” the country’s integrated financial services regulator FSC Chairman Marc Hein said.
“Besides, the tax residency certificates that we give, that need to be renewed every year and at the time of every renewal, they need to satisfy the FSC and the MRA (Mauritius Revenue Authority),” the Financial Services Commission (FSC) Chairman told here.
“The checks are there to ensure that the licensees continue to meet the special India licensing conditions,” said Hein, who was on a visit to India along with other officials and industry leaders from the Indian Ocean island nation.
The issue of Mauritius allegedly being a safe haven for money laundering activities has been a matter of intense debate over the past few years. However, Mauritius on its part asserts that it is one of the most cooperative jurisdictions as far as India is concerned and it has always been very responsive to any concerns from Indian side.
“From Mauritius side, we have done a lot. The Tax Information Exchange Agreement (TIEA) is ready to be signed, and as our leaders have said we have gone extra mile.
“During the board meetings of FSC, I’ve not seen any single instance when there have been any complaint with regard to Mauritius not having provided any information sought by Indian institutions.
“There have been no cases of Mauritius being accused of adopting delaying tactics or not providing the information demanded by India. There have been absolutely no complaints about Mauritius not supplying the information that India has asked for,” Hein said.
Global banking major Standard Chartered Bank’s Mauritius unit CEO Sridhar Nagarajan, who was part of Mauritius delegation to India, also said the authorities in the island nation have been very prompt in replying to requests from India.
Nagarajan, who is also vice chairman of Mauritius Bankers Association, said: “From a banker’s point of view, I can tell you there have been days when we have been asked to provide full banking information in 10-12 cases.
Asked whether the business was being affected due to these
perception issues and whether it was time to move ahead, Nagarajan said: “Mauritius is moving very fast to become a Singapore for Africa, an access point for Africa.
“The trend began about one year ago and it is accelerating very fast and even India is participating in this evolution. Mauritius is emerging as the FDI hub for Africa and this is not happening only because of tax purposes.
“As far as India’s concerns about round tripping are concerned, Mauritius has gone beyond any other jurisdiction would have gone to address those concerns. We have been providing information even without documentary requirement and only on the basis of goodwill.
“It is time to look at things differently. We are a jurisdiction that has clearly set its eyes to become Singapore of the next decade and it is up to India to decide on how it wants to participate in this process,” he added.
“Africa is a really important market and already companies from the US, Europe, China and India have started setting up shop in Mauritius for their African investments. They are not coming to Mauritius for tax reasons, but because of its attractiveness as a genuine global financial centre for doing business in Africa,” Nagarajan said.
Mauritius government’s investment promotion agency, Board of Investments (BOI) Director Mallam Hassam said: “We have special benefits for the manufacturing companies setting base in Mauritius for investments in Africa. There are benefits like duty waiver for using our ports. We offer benefits for the companies setting up their back office operations for businesses in Africa.”
Hein said that Mauritius has a strong legal and regulatory framework in place that would keep their investments in Africa secure.
Nagarajan said there is a need for a place like Mauritius when we talk about Africa.
“Everyone talks about the business opporuntities in Africa, but we must remember that Africa is not a country. It is a continent with 55 countries. The first phase of investments has already taken place with direct investments in some large countries there from Indian companies.
“But the second phase can not take place directly and that process would need creation of a gateway like Mauritius,” he said, while adding that it was similar requirements that led to evolution of global financial centres like London, Dubai, Singapore, Hong Kong and Luxembourg.
“Similarly, you will need a Mauritius for doing Africa business. You can not do it through one country in Africa, as they have different exchange controls and different problems,” he added. (PTI)
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