Mauritius forges ahead to become a wealthy African nation
Over the last couple of decades, Mauritius has successfully positioned itself as an economic powerhouse.
According to a report by South African-based global wealth intelligence firm, New World Wealth, the average wealth per person in Mauritius amounts to just over R453,000 ($30,000) as of June 2021.
The South African average wealth per person is around R166,000 ($11,000). Mauritius ranks above Poland with the average wealth per person of R347,000 ($23,000) and only slightly below Portugal, R725,000($48,000).
New Wealth reported that a recent influx of high-net-worth individuals contributed to the finding, a good indicator of business growth potential.
Additionally, many locally-born high net-worth individuals have been created as the economy has grown. Mauritius was now home to some 4,400 high net-worth individuals compared to 2,500 a decade ago.
The World Bank’s 2020 Doing Business Report rated Mauritius number one for ease of doing business in an African country and 13th worldwide.
This, along with low taxes and a fast-growing financial sector, primes it for foreign business formation and breeds an investment culture on the island.
Mauritius was also ranked as the safest African country, along with Namibia and Botswana. Notably, safety is one of the critical drivers of wealth growth in a country.
South African business owners and entrepreneurs will take comfort in knowing that Mauritius has taken steps to ensure ongoing financial compliance, expedite due diligence requirements, and further streamline business start-up processes for investors.
The controversial grey list and the Mauritian response
The country’s rise to the top was momentarily halted in February last year, when the Financial Action Task Force (FATF), included Mauritius in a “grey list” of countries with “strategic deficiencies” in its ability to combat suspicious financial activity.
“While it sent cautionary shockwaves to investors and entrepreneurs who were hoping to invest in the island, the Mauritian government was quick to introduce a robust action plan to remove the country from the FATF naughty list,” said Tax Consulting SA.
With complete buy-in and collaboration from public sector institutions, private sector operators, as well as through consultation with international organisations and stakeholders in the financial sector, Mauritius implemented most of the suggested anti-money laundering and counter finance terrorism reforms.
The FATF delegation conducted an onsite visit to track the country’s progress, and during their October 2021 Plenary meeting, the task force delisted Mauritius.
“What is admirable is not just the country’s dedication and commitment to removing themselves from the list, but the fact that they accomplished this feat in the throes of a global pandemic,” said Tax Consulting SA.
Restoring investor confidence
After overcoming this final hurdle, Mauritius is now set to forge ahead.
As an international financial centre, they play a vital role in facilitating foreign investment into the African continent. Its removal from the list solidifies Mauritius’ standing as one of the fastest developing economies in Africa.
“It places them front and centre as a safe and attractive option for South African investors who have been contemplating life on the island.,” said Tax Consulting SA.
“The fact that the Government has extended validity periods across work, retirement and occupancy permits, or that the investment thresholds have been lowered, makes the allure of Mauritius impossible to overlook.”