Channel Islands-based law firm Bedell Cristin is hoping the opening of a new office in Mauritius will open doors to emerging markets in Asia and Africa, following changes in the law of the Indian Ocean island nation that have allowed Bedell to establish the office in partnership with local lawyers.
Mauritius’ tax treaties – notably with India and China – plus its stability as a jurisdiction make it an increasingly important conduit for investment in emerging markets, according to Mark Helyar (pictured), a group partner and head of Bedell’s Guernsey office.
“Mauritius is like an aircraft carrier off the coast of Africa – a lot of funds go through there into Africa and Asia,” he says. “Forty-four per cent of direct foreign investment into India comes through Mauritius, and it’s an increasingly important foothold for investment into China, where it can be difficult to forge links directly. We think it’s a natural place to expand to.”
The new office, which will focus on funds, banking, corporate finance, capital markets, insolvency and trusts, is headed by Yuvraj Juwaheer, a Mauritian lawyer with more than 15 years’ experience in global corporate law, accounting and administration.
“It’s important when you’re setting up a new office to have the right people,” Helyar says. “We are lucky to have Yuvraj, who has been working in Mauritius for a long time and knows what people want from the jurisdiction.”
The tax structure in Mauritius, which has concluded 35 double taxation treaties, benefits investors into these markets by mitigating income, withholding and capital gains tax, Helyar notes.
There are similarities between Guernsey, Jersey and Mauritius in terms of their legal systems and francophone influence. Mauritius also offers protected cell companies, a legal structure that originated in Guernsey.
“We saw that the jurisdiction needed expertise in the legal sector since there are not many international firms there,” Helyar says. “We’re the first Channel Islands-based firm to come here and our approach to business development will be similar to that at home.”
The maximum effective rate of tax is 3 per cent for a company holding a category 1 global business licence in Mauritius. The country’s double taxation agreements limit the withholding tax payable by non-resident dividend recipients in many African countries to between zero and 10 per cent, while capital gains tax is also zero, compared with a maximum rate of up to 35 per cent in some parts of Africa. The treaty with India also means that tax on Mauritian entities with a presence in India is levied only in Mauritius.
Mark Dunlop, a partner at Bedell’s head office in Jersey, says the firm aims to capitalise on the increased focus on emerging market opportunities among investors in the face of moribund economic growth closer to home.
“Our client base is more euro-based but is looking to place money globally,” Dunlop says. “Everyone in western Europe has been feeling the effects of the credit crunch, and the new growth markets are China and India as well as part of Africa.
“Mauritius is one of the places we can utilise. The office will stand on its own two feet; we have a local partner, local lawyers, and there will be secondments from people here.”
