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With its proximity to booming markets in the east, Mauritius looks set to capture a serious chunk of offshore business. But is it a threat to the Channel Islands? Dave Waller investigates


the world’s greatest byword for failure. The last dodo died in 1681, fewer than 80 years after the island became home to the colonial Dutch. It’s downfall? Being too sluggish and unable to fly. At least the Mauritian economy suffers no such problem. Now firmly on the OECD ‘white list’, the jurisdiction acts as the conduit for a huge chunk of foreign direct investment into India, one of the world’s fastest-growing economies. And as it sits near both Africa and Asia too, many believe it’s set to soar as the planet’s economic focus shifts from west to east. Mauritius is an island in the Indian Ocean,


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around 500 miles east of Madagascar with a population of more than 1.25 million. It is hot, pleasant, culturally diverse, and renowned for its welcome. As late as the 1990s this was of little benefit to anyone other than fawning newly-weds. But when tourist revenue began to slacken, the island’s government kicked off a drive to establish it as a financial centre. It set about developing its own version of Canary Wharf in Port Louis and the nearby Cyber City, and Mauritius became a platform to structure both inbound and outbound investments between Africa and Asia. Its story is similar, then, to another


offshore archipelago with ties to the UK and France. “Mauritius did the same as the Channel Islands,” says Hiren Patel, Partner at VerrasLaw in Jersey. “When tourism dropped off, it pushed itself as a financial centre. The government put the regulation in place, matching the likes of Jersey and the Cayman Islands, and everyone stepped their game up. The big banks came over, and that influx of expertise helped make sure the benchmark went up even further.” Now anyone landing


AURITIUS’S MOST FAMOUS inhabitant also has the unfortunate distinction of being


at the brilliantly named Sir Seewoosagur Ramgoolam International Airport will find a jurisdiction full of well educated, bilingual professionals in law, accountancy, tax and finance, and a pro-investment climate where business costs are low and corporate law flexible. It also has a time zone that allows same-day transactions from the United States through Europe and the Middle East. These days any financial services business looking to build a global presence will have a footprint in Mauritius, whether that’s HSBC and Deutsche Bank or Ernst & Young and Grant Thornton.


From island to island Mauritius’s masterstroke has been to sign a sprawling network of tax treaties with some 36 countries, including China, the African nations, Europe and – crucially – India. The island’s structures are now responsible for 42 per cent of foreign direct investment into what is one of the world’s fastest-growing economies, accounting for £55bn between 2000 and 2011. Mauritius has become hugely attractive to international investors looking for tax efficiencies, saving on, say, capital gains tax on the disposal of assets. “Anyone wanting to do business with India will go via Mauritius,” says Patel. “The island will continue to do well as long as people want to invest into India or vice versa.” It will come as absolutely no surprise,


then, to find Channel Island companies among


Mauritius has tax treaties with 36 countries, including China, the African nations, Europe and, crucially, India


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