An annual report from the World Bank ranked Mauritius as the best place to conduct business in Africa.
The top five African countries showed a diverse geographic spread including Rwanda, Botswana, South Africa and Tunisia. The bottom five included Eritrea, Democratic Republic of Congo, Central African Republic, South Sudan and Libya.
World Bank’s Doing Business report seeks to help potential investors (and governments) identify how easy it is to create startups and investment opportunities across the globe. Mauritius came in at number 32 on the global list.
It now only takes 14 days to register a property, and as little as three days to start up a new business.
Perhaps one of the most significant aspects to Mauritius’ burgeoning business growth, and one with the most controversy, is its low taxation.
The Africa 2016 Wealth Report referred to the huge growth in millionaires in Mauritius, but this included many from other countries who moved there. The report found that “Mauritius was the top performing African country for millionaires (in the past year), with growth of 160 percent.
“Company and personal income tax rates are only 15 percent, with no inheritance or capital gains tax.”
Some feel Mauritius is just a tax haven for the wealthy, and that much of the money coming into the country is simply passing through.
Dipolelo Moime, chief executive of business risk consultancy Legato Services, believes it is innovation more than taxes that has attracted outsiders. “Mauritius is continually reinventing and reforming itself massively to ensure the country is as business friendly as possible, in order to attract multi-national corporations,” Moime said.
Money just passing through
There is an entire business strategy known as “The Mauritius Route” which describes how investors in India use the island nation as a conduit to connect them to Indian markets. In fact, 39.6 percent of foreign direct investment to India between 2001 and 2011, made its way via Mauritius.
However, this money does not pass through Mauritius in a vacuum. The banking and legal processes are legitimate businesses which create revenue streams for the host nation.
Mauritius is not one of Africa’s largest economies, but the World Bank report did not base its findings on GDP. It based them on how easy it is to set up a new business in a country, how well developed infrastructure is, and how attractive a destination is for new investment. In these measures, Mauritius must warrant its ranking.
As of 2016, Mauritius has the highest per capita GDP in Africa, with a 2016-2017 predicted GDP growth of 5.7 percent. Its stock exchange is widely regarded as one of the best in Africa for a country of 1.2 million inhabitants.
The Mauritian government has drawn up a blueprint to diversify the economy and invest in new industries. “Green growth” is at the forefront of plans to maximize the country’s coastlines, with a goal of 8-to-9 percent economic growth per year, which will ultimately lead to Mauritius being a high income status nation by 2025.