Mahen Kumar Seeruttun gives an overview of the Mauritius International Financial Centre (MIFC) and the attractiveness of Mauritius as a platform of choice for investment. Talking to Investor’s Mag, the Minister of Financial Services and Good Governance gives details of the Government’s roadmap to further develop the financial services sector.
Featured in Investor’s Mag, 21th Edition, June 22 – Aug 22
What role does the Mauritius IFC want to play in the region?
The Mauritius International Financial Centre (MIFC) is set to play a premier role in mobilising international investments and supporting the transformation of business, infrastructure, services, and financial markets in the region and across Africa. Our country plays a strategic role in attracting investments and promoting prosperity for and across Africa, with more than USD 80 billion of investments registered from Mauritius to the continent.
Our country possesses the necessary ingredients as an Investment Fund hub, through a series of regulatory measures to cater for innovative activities by adding to the diversity, depth, and competitiveness of the MIFC whilst upholding its integrity to increase investments in Africa, in the quest to promote prosperity, economic development, employment opportunities and enhanced quality of life required to reach the Sustainable Development Goals.
What is being done to prevent Mauritius from being listed on the FATF grey list again?
First and foremost, the delisting of Mauritius from the FATF grey list and subsequently from the United Kingdom and European Union Lists of High-Risk Third Countries have demonstrated the resilience of our financial system. The commitment of Mauritius to continue the implementation of its AML/CFT reforms and increase the effectiveness of its regime is clear and robust. Through the Inter-Ministerial Committee, chaired by the Honourable Prime Minister himself, the Core Group on AML/CFT, and the National AML/CFT Committee, we have demonstrated the necessary political commitment to sustain the implementation of Mauritius’s AML/CFT reforms in the future.
We are sparing no effort in investing in our people and infrastructure as well as in the development of innovative skills, methods, and processes to achieve this goal. We are also boarding the industry operators and the private sector to have in place, at all times, a robust framework taking into account the changing global money laundering and terrorism financing threats, vulnerabilities and risks. Our overall effort is geared toward sustaining the reforms and ensuring the effectiveness of the measures undertaken, building on the FATF process to further raise standards and protect the integrity of the financial services sector to uphold the reputation of Mauritius as a robust and credible jurisdiction.
What are the major attractions of the Mauritius IFC?
Strategically located in the Indian Ocean at the crossroads of international investments, linking the Middle East, Asia, and Africa, Mauritius has forged a strong reputation as a vibrant financial services hub with three decades’ track record in cross border investment and finance. With a hybrid and transparent legal system, political and economic stability, robust regulatory framework, competitive operational costs, a vast network of bilateral treaties, and a large pool of multilingual professionals, amongst others, the Mauritius IFC has carved out a distinctive place on the international arena.
As a stable and democratic country in Africa, the Mauritius IFC offers a suite of sophisticated products and services and possesses all the right ingredients, which embolden the international community to use the jurisdiction as a financial centre.
Mauritius is recognised as an ideal ﬁnancial centre of choice by several international investment funds, private equities, and investment holdings largely due to its convenient time zone, allowing trading with all major markets in a single business day and its developed business, banking and technological infrastructure. Relevant Investment Promotion and Protection Agreements with 23 IPPAs signed with African states offer global investors a certainty to look up for Africa as an investment destination. In addition, Mauritius is a member of the Multilateral Investment Guarantee Agency (MIGA), which is part of the World Bank Group, 1990.
A plethora of incentives including access to three main trade agreements (the African Continental Free Trade Agreement, the Comprehensive Economic Cooperation and Partnership Agreement with India and the Mauritius – China Free Trade Agreement). This represents an important milestone in the trade and economic relationship between Mauritius and India and China which ultimately gives a significant advantage. We have a wide spectrum of products and services such as Family Offices; Insurance; Global Legal Advisory; and Head Quartering. The MIFC offers a sophisticated platform of substance for investors as well as the regional regroupings such as the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
Mauritius has been ahead of the curve within the industry with having introduced legislations and a regulatory landscape for Fintech. How is Fintech fitting with Mauritius IFC ecosystem?
Positioning Mauritius as a Fintech hub, not only for Africa but mainly for Africa and the world, has been on the agenda of the Government’s policy. In fact, the Government has made significant strides in recent years to facilitate/support the growth of Fintech, as a new and niche sector for the Mauritian economy to respond to the growing demand for new technologies, including Virtual Assets.
The introduction of the Virtual Asset and Initial Token Offering Services (VAITOS) Act 2021 characterises Mauritius’s latest and impactful efforts to position Fintech (in particular, the virtual asset industry) as a new and emerging sector for the jurisdiction. Mauritius has undertaken a number of initiatives to position its International Financial Centre as a Fintech hub. Alongside, the Government remains unflinchingly committed to its zero-tolerance approach toward any risks that potentially threaten the stability and integrity of our financial system and to comply with the Financial Action Task Force (FATF) Standards.
The new regulatory framework has not only allowed us to tap and benefit from future growth in this industry but also to protect the rights of the investors dealing in virtual assets and virtual tokens so as to safeguard their interest against the risk of money laundering and terrorism financing (ML/TF). The array of measures is intended to shield the financial eco-system from the emerging risks associated with virtual assets and protect Mauritius as a leading International Financial Centre of the highest global standards. The public and private sectors in Mauritius have been working hand in hand to promote Fintech in the region and beyond.
“Mauritius was one of the first countries in Africa to host a global Blockchain Summit and establish a National Strategy on Artificial Intelligence.”Mahen Kumar Seeruttun | Minister of Financial Services and Good Governance
We also have a blueprint for financial services, which lists down the roadmap for the sector’s future development. In 2018, we had already introduced a regulatory sandbox licence. The regulatory sandbox allows an innovator to come and to start deploying a technology where the regulator accompanies that entity towards achieving a product, and then we create the regulations. In this regard, several fintech companies have obtained their licences and they now have graduated to full-fledged licencees.
Mauritius was one of the first countries in Africa to host a global Blockchain Summit and establish a National Strategy on Artificial Intelligence. It is important to highlight that this new legislation has been enacted to regulate virtual assets as a result of recommendation 15 of the Financial Action Task Force, requiring VASPs and issuers of ITOs to be regulated in line with AML/CFT obligations. This shows our commitment to meeting international standards with regard to Anti-money laundering and Countering the Financing of Terrorism measures. Furthermore, in a bid to enhance the Fintech ecosystem, the Mauritius Africa Fintech Hub (MAFH) was created to develop the ecosystem by connecting entrepreneurs, corporations, governments, tech experts, investors, financial service providers, universities and research institutions to build cutting-edge solutions for the emerging markets of Africa.
In a previous public statement, you said that crowdfunding will soon become an important Game Changer in our financial ecosystem. Can you explain how it is going to happen?
In Mauritius, the authorities have noted the importance of crowdfunding and proactively engaged in several forums to establish conducive frameworks (both in terms of regulation and incentive mechanisms) to support the adoption of crowdfunding services;
Crowdfunding has effectively proven to be an attractive and convenient method for encouraging access to financing for micro, small and medium-sized entities through market-based platforms driven by technologies. It will be supporting various agendas from Fintech to Blockchain, from Green to Blue, and from Sustainability to the Environment. We are therefore confident that this new and fast-growing segment of financial services will assist in positioning Mauritius as a competitive and truly inclusive jurisdiction.
What is your outlook for the Mauritius financial industry for the next 5 years?
In line with the Mauritian Government’s Vision 2030 target to double the size of the financial sector, the IFC aspires to grow its contribution to GDP in real terms to USD 1.9 billion. This will increase IFC-related employment by 1.5 times to 17,000 jobs and increase tax revenue to approximately USD 300 million in real terms. These macro-economic ambitions rely on further training Mauritians in the financial services industry and providing better paid, more fulfilling careers, which would help to transform Mauritius into a high-income country.
Mauritius has a strong value proposition for cross-border investors based on its broad product range, attractive tax rates, comparatively low service costs, and political stability. By leveraging these attractive features, the Government aims to :
- position Mauritius as a safe and efficient wealth management jurisdiction of choice, meeting the needs of high-net-worth clients and institutions.
- broaden the range of products and services offered by the Mauritius International Financial Centre to the international investor community.
- establish the Mauritius International Financial Centre as an attractive multi-asset class capital raising and trading platform
- Ensure that numbers of investors in innovative areas are increasing
- attract players of excellence to be the first mover in the area of crypto and digital assets.
- fulfil our role as a hub for Africa and for the world in relation to Fintech, and as part of its future strategies, Mauritius envisions to keep pace with the latest and disruptive trends in emerging technologies and will engage proactively with international regulators and standard-setting bodies.