According to the AfrAsia Bank Africa Wealth Report 2019, Mauritius tops the list of wealth markets in the African continent with the fastest growth rate. With this performance, the country is now being seen as a wealth hub of choice in Africa. Can you explain the reasons for this impressive performance?
Indeed, Mauritius has recorded a stellar growth in total wealth held amounting to 124% between 2008 – 2018. This significant growth makes Mauritius the fastest growing wealth market in Africa over this period and the second fastest growing wealth market worldwide during the past decade. In 2018, we were home to 4 000 HNWIs, 190 multi-millionaires and 6 centi-millionaires with wealth per capita situated at US$ 31 000, the highest on the African continent.
This bears testimony to a few key factors. In fact, the increase in HNWIs has been driven by the relocation of a large number of wealthy individuals on the island. Among its key attributes are its attractive offerings as a lifestyle and investment destination for foreigners, individuals and investors alike. People, especially women and children, can lead a safe life here. Ownership rights are strongly protected, encouraging locals and foreigners to invest in property and businesses. The strong economic growth over the past few years has also encouraged foreign investors to come and do business in the country. With a robust banking system, the ease of doing business, the country now ranks 13th worldwide. Low income and corporate tax rates are all factors which appeal to wealthy individuals and retirees, which has encouraged them to use the country as an investment hub.
The trend is set to rise by 2028 with Mauritius featuring among the four countries in Africa that are expected to experience the fastest growing wealth.
The island has become a hotspot for migrating HNWIs from South Africa. It is estimated that 280 millionaire South Africans have migrated from this country to Mauritius alone since 2006.What makes the country such a popular wealth destination for these people?
South Africa’s uncertain political landscape and failure to draw sustainable investment have indeed become beneficial for Mauritius as the country is now being seen not purely as a holiday destination but equally as a preferred hub for international capital. With expropriation without compensation becoming more of a reality in South Africa, many millionaires find it more profitable to come to Mauritius for their investments.
Local property laws enable foreigners to qualify for residency if they buy real estate on the island for more than US$500 000. The tax regime for both individuals and business is considered as very attractive as there is no capital gains tax, dividend taxes or estate duties. Company and personal income tax come to a bare 15%. This is also contributing to and encouraging South Africans to move to the country.
There is also the competitive advantage around physical safety and security of ownership rights, which is of critical concern in SA whereas Mauritius is proposing both.
In terms of global HNWI wealth, despite an unstable global economic environment, HNWI’s confidence and satisfaction in wealth management globally have remained strong. What can wealth managers do so as not to jeopardise this trust?
Firms offering wealth services need to continue enhancing the client experience as HNWIs demand more value from their wealth managers. It has to be understood that when an HNWI is approaching a wealth management firm and trusting a wealth manager, all the parties involved are together embarking on a financial journey together. So maintaining this level of confidence becomes vital. Value creation therefore becomes primordial as clients expect value in exchange of fees and personalised services, for example. Key opportunities need to be explored so as to better meet and exceed the expectations of HNWIs regarding customised offerings, service quality and fee transparency. The latter remains a major concern for many clients worldwide. Hence the client experience needs to be enhanced with a focus on wealth manager/client relationships.
The use of disruptive technology in the field of analytics is also influencing the way wealth offices will be conducted in the coming years. Addressing existing gaps will better support the survival of wealth firms and prepare for a future based on rapid innovation.
Mauritius as a lifestyle destination also plays a major role in attracting HNWIs to Mauritius.
Over the years, Mauritius has built its reputation as a popular lifestyle hub and golf happens to be one of the most preferred sports by the HNWI community worldwide.
Over the years, the island has invested highly in this industry through excellent golf courses in upmarket hotels and through the staging of many golf events. These competitions usually host golf stars making this sport even more prized among both local and foreign HNWIs.
The AfrAsia Bank Mauritius Open, for instance, is a much anticipated competition in the golf calendar by both international players and HNWIs as it provides an interesting and rich platform for socialising and networking.
This event is our annual flagship event which we are very proud to be associated with. It allows us to further connect with our HNWIs clients. By being broadcasted to some 400 million households live and being highly media-driven, it also serves to get the Mauritian brand also known as a golf destination and at the same time attract potential HNWIs.