theres more to mauritius than1551 .pdf
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theres more to mauritius than
MAURITIANS are tired of hearing of their tax regime winning all the kudos for making their
country Africa's best place to do business. With tax at just 15%, compared with SA's 28%, you get
to keep a lot more of your money than you do in this country.
But the islanders regale you with a host of other equally important reasons why the World Bank's
"Doing Business 2015" report ranks Mauritius as Africa's leading country, and places it 28th
SA comes in at 43, just three places above Rwanda.
"It's not about tax," says Kamal Taposeea of Minerva Fiduciary Services in Mauritius. "It's the
sophisticated level of professional skills, the rule of law, democracy, the absence of restrictions on
the movement of capital and the fact that there is no capital gains tax, donations tax or hereditary
tax." He adds the lack of crime as another strong attraction.
"There's a laissez faire attitude that lets you run your business without your having to suck up to
politicians. That's our success, and it doesn't sound like many other countries in Africa."
Mauritius also tops the Mo Ibrahim index for corporate governance.
Another clincher is the investment protection and promotion agreements Mauritius has with
several other countries. A Mauritius-based company that invests in these countries is protected
from having its assets nationalised or expropriated and from any ban on exporting profits. Many
foreign companies use Mauritius as their base for international expansion to gain that protection,
which they don't get if they invest in a country directly.
SA's high commissioner to Mauritius, Nomvuyo Nokwe, believes our government could learn
much from the island - especially since SA companies like Investec and Aspen are using
Mauritius as a launch pad to the rest of Africa, and no longer see SA as the gateway.
"These are things our government should be looking at. Our people need to come and see how
these things work and how they are done," Nokwe says. Some of her government colleagues are
surprised to realise that the low tax applied by Mauritius is an incentive for people to open
businesses, she says.
She also wishes they would emulate the Mauritian government's active encouragement for
entrepreneurs and the incentives it provides for them. For example, people are enabled to open a
business within three days.
Though SA has funds available to help small businesses, there's a lot of bureaucracy involved.
Nokwe says: "I have tried to be an entrepreneur, but the department of trade & industry's rules
and regulations are so difficult you have to be super-literate to fill out the forms.
"That's why Mauritius has jumped the queue and beaten us for ease of doing business. We have
to make it easy too."
The new small business development ministry should unleash some positive action once it
finalises its policies.
In the meantime, the most urgent lesson to learn from Mauritius involves education, Nokwe
believes. "We need to educate our people, and that's something Mauritians pride themselves on.
It has highly skilled professional people and a literacy rate of 86%, the highest in Africa. It's made
doing business easy, because you have [educated] people to work for you. Companies based in
SA have to educate and transfer skills, but Mauritius doesn't worry about that because its people
are already highly skilled."
Mike Gray, regional president of Uniglobe Travel Sub-Saharan Africa, says another advantage is
that Mauritians are well looked after. They get free education and health care, which makes
workers healthy as well as smart. "The productivity of staff here compared with SA is four-fold."
One SA company achieves more with 150 people in Mauritius than it does with 1 000 in SA, Gray
Because of the absence of exchange controls, "you don't get cross-questioned by the banks or
have to fill in forms every time you want to spend anything overseas," he says. "And the
government departments work together - so you don't have a home affairs department that
destroys the tourism sector."
The World Bank country rankings assess the amount of corruption as well. Richard Robinson,
president of the SA Chamber of Commerce in Mauritius, says: "Mauritius has a fantastic Board of
Investment, with empathetic staff who are knowledgeable. You get help from the government
because they want you to be successful."
Civil servants who have visited Mauritius to pick up tips have told the chamber that even SA's
good policies are stymied, because too many people have to approve each process.
"You have to go through 50 people before you get a decision. It's incredibly difficult in such a
bloated civil service to get it right," Robinson says.