Sanjiv Bhasin on Global Business sector: “A new market will open up”

 “These new measures give the signal to the world at large that we are attempting to be entirely compliant to the new laws and regulations,” he says.

• How do you welcome the abolition of the Deemed Foreign Tax Credit regime and to replace it with a new formula? Was it expected by the industry?

I think it was expected by virtue of the fact that you have to be in compliance to the global laws and regulations and that the OECD wanted to ensure that Mauritius as an offshore jurisdiction is far more compliant and also on the road to being at par with some other established centres. I think it is a step in the right direction and that it was expected. The market was expecting it, and I am sure that the discussions were held with all the participants in the sector so as it does not come as a shock or a surprise. These new measures give the signal to the world at large that we are attempting to be entirely compliant to the new laws and regulations and so that the jurisdiction is welcoming to investors who want or prefer that description associated with the centre.

• Does the abolition of the GBC2 regime also a step in the right direction?

Yes, I think it is again, driven by that. Temporarily it might slow down the growth. One of the requirements of the development of an offshore centre is that all investing companies or offshoremanagement companies should have a presence, which is of substance in the jurisdiction. Therefore if you want to be bold enough to tell the world that you want to be implementing this in its true spirit, again it is a step in the right direction.

• Do you think these new budgetary measures will help make Mauritius a more trusted jurisdiction?

Absolutely.

• What should be the effects of those measures on the Mauritius IFC?

Overall I believe it will have a positive impact. The quality of growth will be far superior. Over the period of time this jurisdiction will be selected by some of the investors who had not yet considered it. They will feel more comfortable when they see new laws and new regulations that are more compliant. Therefore, with these new steps in the right direction the chances are a new market will open up. Fund management companies, which for reasons best known to them may not have chosen this place, will be more inclined to select it now.

• Does this budget strengthen the position of Mauritius as a gateway to Africa?

It has always been a gateway to Africa. Its location is such. Its double taxation treaties, its investment laws with the various African economies. It is a gateway! That is Mauritius’s strength. As long as Africa continues to grow aggressively which it is at this point of time. It is showing strength of GDP rising in most of its economies. It is a great opportunity to be the base from where the investment is received and then reinvested elsewhere on the continent.

• There have been some budgetary measures to further open up the country, including the citizenship investment program. Should we expect a rush of High Net Worth Individuals to Mauritius?

I trust that is intended. Why not? It’s quite a transparent tax jurisdiction, a great place to live. Beside other things, it has the advantage of being the gateway to Africa. If the intent is to grow your investment portfolio into the African continent then it is the ideal place to base your activity. Otherwise it is a great place to live.

So, is it a good decision?

I am unable to comment on that because the full regulations have to come up. But yes it is a step in the right direction. There is absolutely no doubt about that.

• Apart from the regulatory and fiscal aspects, what are the main challenges facing the Mauritius Financial Centre?
  

Obviously it is the ability to have a skill set of talents, which understands Africa well. Africa is a group of 54 countries which are behaving differently economically and politically. There has to be a talent base able to demonstrate their superior knowledge of African economies and the ability to select investment opportunities for people who are using this jurisdiction for investment into Africa. But that is not a real matter of concern because over a period of time this talent is increasing and is being available. But if you want to position yourself aggressively, there are talents available in Africa, you could identify them and improve your knowledge base. Everybody wishes to select jurisdictions based on certain parameters and where the availability of relevant talents comes in pretty high.

• Does this budget offer more prospects for AfrAsia bank?

It will be of more prospects for everybody. It’s a fantastic budget. Taxes have been reduced. More public expenditures announced which will increase the money supply in the economy and propel further demand. One would expect that the larger projects when they are completed would add to the revenue streams. It’s a very encouraging budget, the deficit has been contained, the public debt has been contained. It’s a brilliant exercise that has been demonstrated.

• How should we deal with all the criticisms received by Mauritius Financial Centre?

You have to look at those criticisms in the right perspective. Not all of them are damaging. Some people or regulators who are raising criticisms have the desire to make this jurisdiction superior. It is not the desire to pull it down. The desire is we want to use this jurisdiction and there is an opportunity for this jurisdiction to do even better. Therefore enabling laws and tax regimes need to be adjusted. I would say they should be taken as feedback for future business growth. That is making sure that the competitive advantage, which Mauritius has enjoyed over the past years, continues to last