The Mauritius International Financial Centre

Abstract

The Mauritius International Financial Centre (MIFC) has been established in a progressive manner over the past three decades. The humble start in 1992 with innovative legislation to set out the regulatory and operating framework of the offshore sector was the trigger point to carve out a niche for making Mauritius an attractive tax planning jurisdiction for inward investments into India. India’s liberalization in the 1990s coupled with the attractive Double Taxation Avoidance Agreement between Mauritius and India, provided the perfect opportunity to use the Mauritius jurisdiction for structuring investments into India. Mauritius’s attraction in becoming the jurisdiction of choice for private equity investment and for development finance institutions into Africa is testimony to the level of expertise achieved over the years. However, the Mauritius jurisdiction has also faced numerous challenges and vulnerabilities. The ongoing onslaught of the international community on tax havens and low-tax jurisdictions on the aspect of ‘harmful taxation’ has made policymakers in Mauritius adjust and adapt to the new world environment whilst ensuring that they maintain the MIFC’s competitive edge. The challenge ahead is to build on the reputation, trust, and competence of the MIFC in catering for new business models and requirements following the Covid-19 pandemic in a new world order. The chapter offers a critical analysis of the evolution of the MIFC in light of the changing global business ecosystem, highlights key developments in competing jurisdictions, and charts some of the important choices that will be required to ensure the sustainability of the sector.