How did the island of Mauritius become the highest ranked economy in sub-Saharan Africa on the World Bank’s Ease of Doing Business Index? David Seinker, Founder and CEO of The Business Exchange (TBE) – which has just launched its own investment opportunity for South Africans – provides his view.

There are a number of key factors that make for an attractive investment environment, including a well-developed banking system, a favourable tax regime, and low inflation. And when the location is just right, in terms of proximity to major international markets, the stars really fall into alignment. And that’s exactly the case for Mauritius. 

The modest Indian Ocean island, which has always been best known for its exquisite white beaches and ‘get-away-from-it-all’ lifestyle, is fast becoming one of the hottest investment destinations and foremost business hubs on the African continent. 

Back in 2017, the Financial Times published a special report on investing in Mauritius, headlined ‘Mauritius sets sights on becoming new Singapore’. In the decade prior, 2007 to 2017, the wealth held in the island country grew by 195%, prompting this accurate comparison from a publication held in extremely high regard by investors. 

Turning the tide on taxes

The fact that Mauritius is on a mission to make itself more attractive as an investment environment is clear from its progressive and highly favourable tax regime. 

Mauritian tax-planning advantages include no capital gains tax; no inheritance, wealth or gift tax; a standard 15% individual tax rate; and no exchange control. Corporate tax is set at a rate of 15% or lower, while the country also boasts a strong tax treaty network.

Location, location, location 

This well-known refrain of any savvy property investor cannot be argued in the case of Mauritius, which is ideally positioned for foreign investment for a number of key reasons. Its proximity to South Africa – it’s a mere four-hour flight from Johannesburg – is an obvious advantage, as the City of Gold remains the continent’s foremost business hub. Mauritius is also perfectly positioned en route from Asia and the Middle East to the tip of Africa, making it ideal for expansion into Africa, and also from Africa to the rest of the world. 

Major global brands such as Samsung, Broll, NBA and Expedia have already set up office in Mauritius, recognising it as both an ideal location and efficient business environment. 

Sea, sun and stability 

Mauritius is a fiscally and economically sound environment, with modern infrastructure and a sophisticated banking system, and a strong banking regulator in the Bank of Mauritius (the island’s equivalent of the Reserve Bank). 

Socially, the country has a lot going for it too. New World Wealth rated Mauritius as the safest country in Africa, as well as the wealthiest country on the continent on a per-capita basis. The government’s commitment to more than just financial wealth is also evident from its Ministry of Health and Wellness, which is responsible for public health care. 

“Current and past democratic leaders have all demonstrated their commitment to a market economy that fosters entrepreneurship and foreign investment. With annual growth averaging approximately 6% over the past decade, it’s a sound investment opportunity,” Seinker believes.