PART - I DEMOGRAPHIC PROFILE OF MAURITIUS

Population : 1, 303,717 (July 2011 est.) Ethnic groups Groups Indo-Mauritian Creole Sino-Mauritian Franco-Mauritian Sex ratio At birth Under 15 years 15-64 years 65 years and over Total population Life expectancy at birth Total population Male Female 74.48 years 71.01 years 78.12 years 1.05 male(s)/female 1.04 male(s)/female 0.99 male(s)/female 0.67 male(s)/female 0.97 male(s)/female Percentage 68% 27% 3% 2%

Net migration rate : 0 migrant(s)/1,000 population (2011 est.) Urban population Rate of urbanization Religion 42% of total population 0.8% annual rate of change (2010-15 est.)

Religion Hinduism Roman Catholic Islam Other Christians Other None

Percentage 52% 27.5% 16.6% 8.6% 2.5% 0.4%

Birth rate: 13.97 births/1,000 population (2011 est.) Death rate: 6.68 deaths/1,000 population (July 2011 est.) Education Education from pre-primary through to secondary is free for persons born in the country, and primary level net enrollment ratio is consistently above 90% (93.3% in 1991 and 94.0% in 2009). Languages Languages Creole Bhojpuri French English Other Unspecified Percentage 80.5% 12.1% 3.4% less than 1% 3.7% 0.3%

Some ancestral languages which are also spoken in Mauritius include Hindi or Bhojpuri, Urdu, Telugu, Tamil, Marathi, Chinese language and Arabic. School students must use English and French; they also have the option to study any oriental language including Mauritian Creole. The Mauritian population is multilingual, most Mauritian are equally fluent in English and French.

Literacy Definition: age 15 and over can read and write Total population 84.4%

Male Female

88.4% 80.5%

Population growth rate: 0.729% (2011 est.) Net migration rate : 0 migrant(s)/1,000 population (2011 est.) Urban population Rate of urbanization 42% of total population 0.8% annual rate of change (2010-15 est.)

ECONOMIC & INDUSTRIES OVERVIEW OF MAURITIUS

In Africa, one of the developing countries, Mauritius is known to be very

successful in terms of economy. There is a massive development form last decade. Basically the key the success of the economy of the Mauritius is sugar, textile, tourism and financial services.

The main reason behind is having diversified skill force and a well developed

infrastructure that attracts other countries to invest in Mauritius (Foreign Direct Investment)With the economic growth, standard of living of people has gone up. With the passage of time and want to grab the opportunities of globalization and liberalization, government of Mauritius have taken several steps, among them are high value added, capital intensive and knowledge based activities are on priority list.

Among them the booming sector is the Information Technology, which is

undergoing the rapid changes only with the objective of high tech and software services, which can be exported in future. Not only Information Technology is rapidly changing but along with it, the sectors of Mauritius is also rapidly changing i.e. textile, sugar, tourism and financial services, but in a positive direction. Since the independence of 1968, Mauritius has different phases of economy i.e. from low income to middle income due to the development of Industrial, financial and tourism sector.

The main indicators for the growth of the economy of Mauritius are mainly:-

Equitable Distribution System. Increased Life Expectancy. Lower Infant Morality. Much Improved Infrastructure.

Sugarcane is grown of about 90% of the cultivated area and accounts for 15% of

the export earnings. The strategy of the government is on the centers creating vertical and horizontal clusters for development. There are about 32000 offshore entities; also investment in banking has reached to about $1 million. GDP: - $ 9.496 Real Growth Rate: - 4.2% Per Capita Income: - $13,670 Average Inflation Rate: - 2.9% Natural Resources: - None Agriculture: - 3.6% of GDP-Products- Sugar, Sugar derivative, tea, tobacco, vegetables, fruit, flowers, cattle and fishing. Manufacturing: - 18% of GDP-Types-labor intensive goods for export, including textiles and clothing, watches and clocks, jewellery, optical goods, toys and games and cut flower. Tourism: - 7% of GDP Financial Services: - 10% of GDP Trade: - $2.186 billion

OVERVIEW OF INDUSTRY TRADE AND COMMERCE

Export Processing Zones: Industrial development in Mauritius expanded rapidly after 1971, when the government established EPZs. In return for tax benefits, duty-free imports of raw materials and machinery, and other inducements, the owners of EPZ enterprises agree to export all their products. In the first year of operation, nine EPZ firms employing 644 persons accounted for 1 percent of export earnings. In 1992 a total of 568 EPZ enterprises employing 89,949 persons produced such items as flowers, furniture, jewelry, and leather goods. The EPZ rate of growth of employment and foreign exchange earnings slowed in the 1980s and early 1990s. However, the value of EPZ exports in 1993 set a record of MauR15.8 billion. Textiles are the main EPZ product, accounting for 89 percent of jobs and 83 percent of exports. With regard to wearing apparel, Mauritius benefits from preferential treatment in the European Community marked under the Lom Convention. Hong Kong, the source of 22 percent of all foreign investment, is the largest foreign investor in the textile sector. Other countries participating include France, Britain, and Germany. Two foreign firms dominate the textile industry: Socota and Woventex. In a 1991 policy paper, the government urged diversification of EPZ industries and pledged to give priority to non clothing industries such as electronics. The Economic/Commercial Section at the U.S. Embassy in Port Louis advises issues and the U.S.-Mauritius and U.S.-Seychelles economic the Ambassador and the U.S. Government on economic, labor, science, and technology relationship. They also offer a number of services to businesses to promote trade between the United States and Mauritius. Services range from complimentary overviews to tailormade services for a fee. The list of specialized, fee-based commercial services available to U.S. businesses is below. Major Exports:

Clothing And Textiles Sugar Cut Flowers Molasses Machinery and transport equipment Chemicals and related products Food and live animals

Major Imports:

Capital Equipment Foodstuffs Mineral fuels, lubricants and related products Chemicals and related products Machinery and transport equipment Food and live animals Crude materials (inedible) except fuel

Our Commercial Services for U.S. Businesses:

Gold Key Appointment Service International Partner Search International Company Profile The reputation of Mauritius as an International Financial Centre rests on the

quality of its services and its pool of highly qualified professionals. The Financial Services Act (FSA) adopted in 2007, simplifies the regulatory regime and consolidates the legislative framework of the global business sector. In monitoring the conduct of business activities of its licensees, the FSC focuses inter alia on market conduct, Anti-Money Laundering and Combating the Financing of Terrorism requirements, corporate governance principles and international norms and standards. A company applying for a Global Business License should pass the test of conducting business outside Mauritius. An applicant for a Global Business License is

required to submit the appropriate application to the FSC, channeled through a Management Company of its choice. Management Companies (MCs) is service providers which act as intermediaries

between their clients and the FSC. MCs are licensed by the FSC under Section 77 of the FSA to set up, manage and provide nominee and other services to a corporation (which carries on or intends to carry on any global business and such class of corporation as may be prescribed) or act as corporate trustee or qualified trustee under the Trusts Act 2001. Applying for a Management Company License Applying for a Category 1 Global Business License Applying for a Global Funds license Applying for a Category 2 Global Business License

The FSC licenses, under the Insurance Act (IA), insurance/reinsurance

companies as well as insurance service providers (Insurance Broker, Insurance Agent (company /individual), Insurance Manager, Insurance Salesperson and Claims Professional) to conduct insurance business activities. Total assets and gross premium of insurance companies continued to follow an

increasing trend over the past years. Total assets showed a growth of 15% to reach Rs 88.54 bn in 2010 as compared to Rs 76.79 bn in 2009. Gross premiums rose by 19% from Rs 14.75 bn in 2009 to Rs 17.54 bn in 2010.

OVERVIEW OF ECONOMIC SECTORS OF MAURITIUS

BANKING SECTOR The banking provisions particularly focuses on giving effective directions on the banks perspective towards risk, income recognition, loans and advances classifications and also weighted capital adequacy ratio. The important dimension of banking act of 2004 provided in august 2004 making banks of Mauritius mandatory to provide the Islamic banking services as a part of their service delivery.

The introduction of Islamic banking services provided a great impetus to Mauritius banking to diversify the financial sector and also include the provision of giving services for banking wealth management.

The highlight the financial action task force style body pertaining to the region bank of Mauritius took initiative to create Offshore Group of financial supervisors eastern and southern African banking supervisors group.

AGRICULTURE SECTOR As far the sector allocations are concerned the agriculture is dominant with the 50% stake as compared to other sectors.

The basic objective for anchoring the agricultural products was to focus primarily on exports. Owing to the larger stake among all the sectors the agriculture is the main stay of people in the sense that it employs the largest number of people. A part from agri products the sector also witnessed the considerable growth in production of flowers and fruits.

INFORMATION AND COMMUNICATION TECHNOLOGY SECTOR An important achievement of Mauritius as a part of African country is that it was the only country with digital network in the region. Also as a part of Africa it owns the highest telecommunications density. As compared to the early 90s decade with later 90s the growth of telecom sector have been tremendous, while the average growth still remained at 8%. On account of liberalization of Mauritian telecom sector the Mauritius no longer enjoy the monopoly position but now only shares market with mahanagar nigam telecom.

The progress of technology can be ascertained by the fact that every 3 out of 4 people possess mobile phone connection.

TEXTILE SECTOR The textile sectors also constitute as stepping stone of Mauritian economy. Through textile sector it went to create the Export Processing Zones in 1971 to fight barrier of unemployment.

The sector also witnessed drastic changes in its history of 30 years mainly on account of highly skilled labor and efficient management practices followed. The Mauritian textile sector among other professional textile players also enjoys the sound reputation. The Mauritian sector possess major textile distributors and retailers namely 3 Suisses, Galleries Lafayette, Harrods, Selfridges.In the present scenario to make the Mauritius a centre for capital intensive activities of spinning, weaving, designs, marketing etc the new investments are also being maiden latest technology.

TOURISM SECTOR The tourism sector of Mauritius has been the most important contributor to the foreign exchange earnings. The presence of exotic sandy beaches, bluer lagoons, good climate and spectacular landscape makes the makes a dream land for its tourists.

A composition of different races, cultures and religions, live with peace and harmony in Mauritius.

To garnish and make night life of tourists attractive the Mauritius has wide variety of casinos, bars and discos. Tourist policies of Mauritius promote the elite and specialist tourism in Mauritius. The Mauritius also has the existence of many luxurious hotels which are ranked best in the world providing excellent services. According to an estimate about half a million tourists visit Mauritius every year which is significant.

OVERVIEW OF BUSINESS & TRADE AT INTERNATIONAL LEVEL

Mauritius has been considered as a unique investment destination over past 12 years. The country has a established and firm democracy, standard of living are also elevated and effervescent economy. It was first into small agricultural economy and finally has changed into dynamic secondary sector i.e. textile and tourism, and lately Business Process Outsourcing. Mauritius has been ranked 27th out of 178 economies in its latest Ease of Doing Business publication of the World Bank. Mauritius simplest place to do business Mauritius has reached 24th position out of 181 countries in the Doing Business 2009 rankings. Mauritius offers many investment opportunities both on shore and off shore. It has become a growing business and financial hub. As Mauritius is located at the intersection of Europe, Africa and Asia, it offers a raised area for holding and structuring investments in many of the worlds best ever growing economies.

Mauritius: Offshore business sectors

1. Banking The Bank of Mauritius (the central bank) is responsible for licensing, ruling and controlling of the banking sector. Banks are liberated to conduct business in all currencies. The bare minimum capital requirement for a bank has increased from 100m to 200m. 2. Insurance

The insurance sector has been brought under the Financial Services Commission by Financial Services Development Act 2001. The insurance Act 2005 provides for the implementation of the International Association of Insurance Supervisors Standards and the foundation principles. It also concentrates on definite dogmatic issues relating to solvency, funds sufficiency, corporate governance, and protection of policyholders as well as financial system.

3. Investment Fund Management During 1989 the Official Market for investment fund management started with 5 listed companies and with a market capitalization of nearly US$ 92mn. Gradually it opened the stock market to the foreign investors following the elating of exchange control in 1994. By the end of 2011, 38 companies listed itself on the official market, representing a market capitalization of almost US$ 6.158bn, up from US$ 4.8bn in 2009. The Mauritius Stock Market exposed its plans for another unusual market, the Development & Enterprise Market (DEM), in Sept 2005. it was especially designed for companies earlier quoted on the Over-The-Counter (OTC) Market, Small and Medium-sized Enterprises (SMEs) and recently set-up companies which has a well structured business plan and exhibit a excellent development prospective. 4. Management and maritime operations

Mauritius Shipping Act 1986 and the Mauritius Shipping Act 1992 regulated the registration of Mauritius Open Ship Registry. For Mauritius, Port Louis is the domicile Port of the Registry and governs its Head Office.

Provisional Certificates of Registry can also be issued by Mauritian Embassies, Consulates and Honorary Consuls worldwide. Ships that are to be registered should not be more than 15 years old and class must be maintained with one of the classification societies permitted by the Director of Shipping. 3rd party insurance must be evidenced; also conformity with the chief international maritime conventions is also necessary.

Financial Services Commission carries out the authentic registration process and involves the amalgamation of an Offshore Company or an International Company if one does not already own the ship. Temporary registration is fine for 6 months. An ordinary series of documentation is requisite during the registration process.

PRESENT TRADE RELATIONS WITH INDIA / GUJARAT

Economic & Commercial Relations: Bilateral trade between India and Mauritius over the last ten years is indicated below: (In Million US$) Indias Year Exports to 2003-04 203 8 2004-05 258 7 2005-06 199 7 2006-07 738 15 2007-08 1089 10 2008-09 1007 14 2009-10 453 11

Mauritius Indias Imports from Mauritius Mutual trade:

In 2007 & 2008 India was main exporter of services an goods to Mauritius. Main items of exports were fuel goods, thread, fabric, Bovine beef, Natural chemical, synthetic, footwear; pottery goods, goblet , etc.

To achieve all crude product of maturities 3 year accord was rehabilitated in July 2010.

Bilateral Investment: According to the Department of Industrial Policy and Promotion Foreign Direct Investment (FDI) inflows from Mauritius to India during the period April 2000 to December 2009 amounted to US$ 49.11 billion, providing for 42.32% of the total FDI into India over this period.

The relation between India and Mauritius is common meeting of India and chamber of commerce and industry of Mauritius The Federation of Indian Chambers and Commerce (FICCI) and the chamber of commerce and industry of Mauritius describe the business community and trade of their particular country.

Additionally, the basic motto is to augment ethical business actions between them.

Policies of trade Procedures of trading Contract of trade Regulatory procedures and administrative of trade Investment opportunities related to trade Networking of business

Trade Relations policy between India and Mauritius:

Government should have to make free atmosphere for trading and Government has made simple rules and regulation and lowering the Government also made generalization in duties and levies in input products Also provide better technology and make alteration in infrastructure in all

encourage industrialization. transaction cost for legal procedure. which is used in India. sector of the Indian economy, particularly with the help of import it is possible to increases in productivity and value.

Also see that import does not make inverse impact on domestic sector in

the Free Trade Agreements/Regional Trade Agreements/Preferential Trade Agreements and India also come to export relation.

Upgrading in infrastructural network, both material and essentially, with Revitalizing the Board of Trade by redefining its role.

relation to come in to foreign trade.

Trade relation policy by Mauritius relating to India. For promotion of joint venture made investment guarantees. Make identification of all items which is invested and make trading. increase two-sided deal seize unlawful deal among the two countries

Additionally, to make stronger and merge India Mauritius trade relations and both countries government working to endorse collaboration.

financial system trade Invent partnership accord and complete economic collaboration. speculation and economic collaboration Indian savings in Mauritius

Mauritius's main strength is like planned site and trade agreements at many side and limited levels to provide as a facilitator for Indian investors in Mauritius market and other markets through its various trade agreements. Government of Mauritius and the EXIM Bank of India has recognized area of saving for Indian commercial sectors such as:

production economic services Tourism Health Education and knowledge Capacity enhancement

"Indian players can participate in some niche businesses offered by the domestic market in Mauritius. The Taj and the Oberoi have already forayed in the tourism sector. Apollo and Fortis are likely to set up hospitals in Mauritius in the next two years. Educational institutions like NIFT, Bits Pilani are to set up shops there. Even MCX is setting up a commodities exchange in Mauritius. However, not all Indian companies are making use of the opportunities offered by the Mauritius market." Mauritius play an important role in to foreign direct investment and its part is greater than 40%.It is only due to tax benefit, Mauritius known as tax havens country and Mauritian company not taxed in India. Both countries started their negotiation in 2006.

PESTEL ANALYSIS OF MAURITIUS

POLITICAL ANALYSIS: Political Environment The political panorama of the Mauritian society is based on the Westminster model. Elections are held every five years and the next election is due by December 2000. The countrys legal system is based on English and French laws and the local Constitution, with an independent Judiciary System. There exists healthy relationship between Public and Private Sector organizations and this has played in favor of growth over the last decades. The Government is fully committed to regional and international organizations like OAU, ACP, COMESA, SADC, IOR-ARC, United Nations, Commonwealth and the Bretton Woods Institutions. Government: Patterned on British system; political party with majority support in National Assembly chooses prime minister, who selects cabinet. National Assembly has elected representatives from twenty three-member constituencies and one two-member district on Rodrigues. ECONOMIC ANALYSIS:

The estimated GDP for the year 2010 for the official exchange rate was $9.496 billion. The estimated Real growth rate during the same year was 4.2%. The Per capita income was been estimated as $13,670. During the year 2010 the Average inflation rate estimated was 2.9%. There was no Natural resources contribution. The contribution of Agriculture to the GDP was 3.6% which were from the Products-sugar, sugar derivatives, tea, tobacco, vegetables, fruits, flowers, cattle, fishing.

The contribution of Manufacturing industries including export processing zone (EPZ) to the GDP was 18% Which came from the Tourism sector 7% from the countries France including French island Reunion, South Africa, and west European countries.

The contribution of financial services to the GDP was 10%. During 2010 the Trade (Exports) was estimated to be $2.186 billion. The imports from the major markets- Europe and the U.S. were estimated to be $4.298 billion. The major suppliers were India, France, South Africa, China, Japan, and Australia. This data were for the fiscal year: July 1-June 30.

SOCIAL ANALYSIS: There is universal system of pensions that precede an earning-related pension system in Mauritius & it covers all the residents and it is financed from government sources. According to the age of pensioner, fixed sum is paid by the universal pension. As per the number of years worked, employee pension benefits are determined. Government is also dedicated to promote the rights of children as well as employment related sickness, workers compensation and unemployment benefits, maternity benefits. A government is joining hand with the UNs children fund for helping out to the spousal and child abuse & come out from the growing violence problems. There is a cultural tension that exists between majority of the Hindus & minority of the Muslims. Rights of human are usually, but there are mistreatment reports of suspects & prisoners. TECHNOLOGICAL ANALYSIS: All hardware components are imported in Mauritius. There is no large scale manufacture of hardware components although there is some assembly of PCs for the local market and the regional market.

As far as system technologies are concerned, the country is following the trend with UNIX systems as leader in server market and Windows on PC environment. Mauritius is especially characterized with the absence of legacy mainframe systems and is thus less affected in the trend towards migration to networkcentered computing.

Having started late, it can leapfrog into these new technologies. In software development, the industry is again following the trend of moving towards packaged solutions rather than custom-developed solutions. However, Data warehousing, Groupware and Workflow solutions are not widespread.

There is also some export of software services to the regional market. A few companies are exporting services such as data capture, pre-media and teleprocessing Connection to Internet is available through one ISP. Moreover, the local operator will introduce an ATM ITID NCB MAURITIUS CONFIDENTIAL National Computer Board Mauritius, 1998Working Team Report on National IT Strategy Plan (Phase II) network in 1999 which will considerably increase available bandwidth.

Mauritius is also involved in the SAFE project which will link South Africa to the Far-East and this will improve international telecommunication.

ENVIRONMENTAL ANALYSIS: Given the size of this Island, all the causes of environmental degradation have an effect on the coastal zone, where most of tourist areas are located. Main Issues: Unloading of liquid and solid wastes are the main causes of environmental degradation. Unloads from textile industry: Many factories are located in coastal areas & that too without treatment plants, even the factories are concentrated in industrial zones. Unloads from residential areas (40 % in the coastal zone Unloads from tourist areas, concentrated in 3 sectors on the coastal zone. Unload of nutrients from sugar cane which covers about 60 % of the territory.

Certain impacts are irreversible, such as buildings (hotels, bungalows, restaurants) on the shoreline generating erosion and restrictive access to the seaside.

It is too late for existing buildings on the shoreline, but in the future, it is possible to stop these constructions and to improve the situation by pulling down small structures, such as jetties, wallsetc

Environment is taking into account in various texts: Environmental Guidelines, Environmental Legislation (including EIA), Tourism Guidelines, Planning schemes for coastal areas, integrating environmental aspects, Many sector-based studies, EIA committee (including several Ministries), Environment Advisory Council and Permanent Committees (tourism,

beaches, wildlife, Natural Park) Including representatives of public and private sectors, o Public consultation for improvement of EIA, o Environmental education, o NGO involved in Environment, o No approbation and no use in making-decision of some important evaluation tools, such as Environmentally sensitive areas Planning schemes for coastal zone Planning guideline for coastal zone.

LEGAL ANALYSIS:

The Mauritius legal system is based on both French and English laws. All process of law is based on English law.

Mauritius is a member of the International Court of Justice, the International Centre for the Settlement of Investment Disputes and the Multilateral Investment Guarantee Agency (MIGA).

The Constitution guarantees freedom and personal rights of every citizen. The executive authority of Mauritius lies with the President of the Republic elected by Parliament.

Mauritius being a former French and British colony has developed a hybrid legal system whereby the French Civil Code and English Common Law and Case Laws form an integral part of the legal system.

PART - II FINANCIAL SECTOR OF MAURITIUS

Introduction:
In todays scenario Mauritius have becoming one of the most efficiently regulated International Financial centre for the business, not only this but also in providing the professional services and which is also considered has not deemed tax haven.

Mauritius, a small island economy in the Indian Ocean off the coast of Africa, has

been remarkably successful in achieving rapid economic growth in the context of financial and political stability.

This success is in sharp contrast to the poor economic performance of most

neighboring countries in the African continent and has been attributed to the pursuit of stable macroeconomic policies and the creation of a regulatory framework that encourages private sector development. It is aggressively expanding its wings in the IFC with the internationally accepted norms provided under the Basle Committee on Banking Supervision, the Organization for Economic Co-operation and Development and the FATF. In order to extract Global business in Mauritius it has built business infrastructure facilities together with the help of numerous tax incentives to provide to the foreign investors. It is having around 36000 global business companies set up which are registered under Financial Services Commission (FSC) in Mauritius.

Round about 550 investment funds are incorporated in Mauritius with AUM of It is also emerging as a Private Banking hub, especially in the light of an

over USD43bn. increasing number of expatriates working in the Island and with more and more HNWIs buying property in the Integrated Resorts Scheme. The contribution of the financial sector in the Mauritian GDP is shown below:

STRUCTURE OF MAURITIAN FINANCIAL SECTOR:

The financial sector of Mauritius is such that it operates under two main wings namely the Bank of Mauritius (BOM) and the Financial Services Commission (FSC). The Bank of Mauritius regulates the operation of Banks and the FSC is a regulator of non-banking financial institutions, namely the Capital Market, Global Business, Insurance and Pension. Each of these will be further analyzed: 1. BANKING The banking sector plays an important part in the financial sector of Mauritius and consists of the Bank of Mauritius, offshore banks and domestic banks. The banking sector comprises of over two-thirds of the domestic financial sector and has grown at an average of 13 percent over the last years.

FINANCIAL STRUCTURE OF MAURITIUS

BANK OF MAURITIUS

FINANCIAL SERVICE COMMISSION

BANK OF MAURITI US

DOMESTI C BANKS

OFFSHO RE BANKS

CAPITAL MARKET

INSURAN CE

INVESTM ENT

THE STOCK EXCHANGE OF MAURITIUS

THE DEVELOPM ENT & ENTERPRIS E MARKET

a. BANK OF MAURITIUS The Central Bank is known as the bank of banks came into force from the force on 1967, as all banks have an account with it. Do to this it was been set up as an

authority to formulate and execute the monetary policy consistent with stabilizing the pricing conditions.

b. DOMESTIC BANKS Financial Institutions may be licensed by the Bank of Mauritius to transact domestic banking business. Presently, there are 19 domestic banks, which is an indication of how the banking sector is of vital importance in an economy. Domestic banks accept various types of deposits from the public such as personal savings deposit, fixed-term deposit among others. They also grant loan, deal in foreign exchange, provide safekeeping facilities and perform various other services.

c. OFFSHORE BANKS Mauritius offers an ideal environment for foreign banks and other financial institutions to conduct their international transaction. Offshore banks are licensed to conduct banking business or investment banking business in currencies other than the Mauritian rupee. Currently there are 11 offshore banks in Mauritius and this sector is experiencing a sustained growth.

2. FINANCIAL SERVICE COMMISSION

The Financial Service Commission monitors the insurance industry, offshore business activities & the countrys stock exchange.

It also supervises banking activities i.e. non-regulated or partly-regulated such as fund management, pension schemes and management, collective investment schemes, investment advisory services and leasing.

a. CAPITAL MARKET The capital market is the market for securities, where companies as well as government can raise long-term funds. The capital market of Mauritius consists of the Stock Exchange of Mauritius (SEM), the Development and Enterprise Market (DEM), leasing companies among others.

I.

THE STOCK EXCHANGE OF MAURITIUS

The Stock Exchange of Mauritius was incorporated in Mauritius in 1989 as a private limited company. It started its operation with 5 listed companies and a market capitalization of US$ 92 million. Nowadays, there are 41 companies listed on the Official Market and it consists of a market capitalization of around US$ 1670.84 million. There are three market indices namely the SEMDEX, the SEMTRI and the SEM-7.

II.

THE DEVELOPMENT & ENTERPRISE MARKET The Development & Enterprise Market (DEM) is a market set up on

August 2006 and is designed for Small and Medium-sized Enterprises

(SMEs) and newly set-up companies which possess a sound business plan and demonstrate a good growth potential. The DEM consists of 53 companies up to now and since it has been launched, the Over-the-Counter market of the SEM was phased out at the end of 2007.

b. INSURANCE The insurance sector also plays a key role in the financial sector of

Mauritius. In order to analyze the trend in this sector, the change in assets which has taken place in long term insurance business from the year 2002 to 2006 will be analyzed for the 13 insurance companies in Mauritius. c. INVESTMENT

Mauritius is one of the best investment decisions with many markets in globalization. There is hybrid system of English & French laws both so the commercial, banking and financial laws in the country require specialist expertise. Their expert team of Mauritian lawyers offers advice to investors and claims expertise in investment laws. This country maintains close contact with different Ministries, Public Authorities and the Board of Investment to help their clients in a proactive manner with healthy relationship.

BANKING SECTOR IN MAURITIUS

(BOM) Bank of Mauritiuss newly constructed tower

Headquarters Governor Central bank of Currency Code Website

At the Port Louis in Mauritius Mr. Rundheer sing Bheenick Mauritius Mauritian rupee MUR ISO 4217 www.bom.mu

BOM is known as the central bank of the Mauritius which was established in the year September 1967. BOM was created from the model of the Bank of England. It was set up under the guidance of the senior officers of the Bank of England along with the responsibilities of the issuance of the Mauritian currency (Mau. rupee) [1]

ROLE OF BOM:

BOM came into force on September 1967was responsible for the maintenance of

price stability and making the monetary policy in order to bring upon a balanced economic development. Its duty was to regulate the credits and currency in the interest of economic It controls the reserves from the foreign countries by managing the clearance, growth ensuring the sound system. payment and settlements by formulating and implementing the policies considering developments of both domestic and international. It oversees financial institutions by testing their soundness, stability and their The provisions of the Banking Act 2004 and the BOM Act 2004 help in regulating BOM also provide the facilities as a money changers and foreign exchange compliance in the terms of governing framework. and supervising the institutions. dealers.

FUNCTIONS OF BANK OF MAURITIUS:

[

The main functions of the Bank include: To Formulate and implement the monetary policy of the country Function of issuing the currency to the Government and to other banks Role of providing the efficient payments, settlements and clearing systems to Managing the debt for the public Managing the reserves for the purpose of foreign exchange

them

Role of the regulator and supervisor for the banks as the RBI does in India Role as the Adviser to the Government in the financial matters.[2]

RELATIONSHIP BETWEEN MAURITIUS & INDIA WITH RESPECT TO BANKING SECTOR

The Indian banks like SBI & BOB are having the operations in Mauritius can be

looking forward for the new opportunities in Mauritius in order to do business with the tax breaks from the African nation working in order to create a vibrant futures and forward markets under the foreign exchange. So under this field Mauritius is actively looking for the co-operation from the Indian banks that are having the good experience of those markets. This can be done by taking a lead by providing an incentive like the tax concessions offer on the income, which of course will implacable be for all the foreign and strategic partners involved in this area. Since Mauritius is aiming strategically to tap the Islamic population in Africa, it will be considering the application from Indian banks to open full-fledged Islamic banking operations there (Mauritius). India currently receives nearly 50% of its FDI from Mauritius and tax authorities believes that some of those money are in the Indian money which is coming back so they refer those money as round-tripping of investment. In order to encourage the outflow of the foreign exchange the bank encourages public institutions in order to be portfolio investors in other markets. These investors are short-term players who are the investors in global markets. As the excess funds of the Indian are deposited to the RBI by participating in reverse repo transactions, the Mauritian bank have a special deposit facility where those funds get parked. However recently news is that this bank is considering reviewing in order to reintroduce reverse repos. Bheenick stated that the major concern was to have a positive interest rate difference between the repo rate which is 9% at which there is

injection of funds in the financial system and the inflation rate which is currently prevailing between 8 to 9%. RBI is not favoring the MOU with the Bank of Mauritius in order to share the But as per the sources it found that BOM is very keen on signing the MoU with information of the financial sector. India. The Securities and Exchange Board of India (SEBI) has been reported as that they have already signed a MoU with its counterpart in Mauritius in order to exchange of market data and information.

Since RBI has been consistently raising the queries over the source of foreign

exchange inflows originating in island nations like Mauritius the similar kind of mechanisms can be used there.[3]

BUSINESS OPPORTUNITIES FOR MAURITIUS IN FUTURE

The interested players can easily rationalize their investments & find the

opportunity in order to gain the financial benefits. With the fast moving Islamic banking trend and a membership of Islamic

Financial Services Board (IFSB) and Islamic Management Liquidity Board the opportunity was seen to promote Islamic banking products through the exchange with the belief that the stock market will grow with this banking and finance structure hugely & widely. The total offshore banking business that flows through Mauritius is close to $150

billion. Indian and foreign banks operating in Mauritius are seeing good growth in business as Indian companies look to expand operations in Africa. There was a clear picture that it had a huge opportunities to start Islamic and was believed that Mauritius will be soon a hub for Islamic banking in the African continent. The main reason in order to choose Mauritius as the base of threefold is

the opportunities available through Islamic banking and the shareholders expansive networks in Africa and Asia

The target markets were Africa and Asia the geographical location of

Mauritius fits well in order to conduct the business. Since Mauritius have the stable political & regulatory framework it provides

India the banking operational support & apart from this it also has the double taxation agreements with more than 35 countries. The other important reason is the setting up and operating costs are

relatively low. The future & forward markets in the foreign exchange provide an opportunity to

the businesses & banks to hedge their risk of currency fluctuation by booking foreign currency in advance. Multinationals and foreign investors including major investment funds use

Mauritius as a base for investing in other countries. This is primarily because the combination of Double Taxation Treaties between Mauritius and these countries, and the domestic low tax regime makes fiscal planning advantageous to multinationals and funds. A comparative study is being planned to assess the global competitiveness of

Mauritius so as to decide upon the adoption of a partial or full territorial tax system within a tax treaty network, or a participation exemption system for foreign dividends and foreign-source interest and royalties, or a regulatory framework for transfer pricing management.

The opportunity should be seized to upgrade Mauritius to the status of a full-

fledged established financial centre by amending existing regulations and introducing new legislation for promoting E-business and developing new products, like limited partnerships, shariah-compliant trusts, tax-exempt ( non-Treaty driven) funds, Headquarters & principal companies, foundations ( for Civil-Code based clients) and other ISDA-related products & services. [3] [4] [5]

PRESENT TRADE BARRIERS FOR IMPORT & EXPORT FINANCING

The trade weighted average tariff rate is competitively low at 1 percent, but non-

tariff barriers still increase the cost of trade. The investment framework is open and efficient, facilitating the flow of new investment. The growing financial sector, dominated by private commercial banks, is

competitive. Financial services account for over 10 percent of economic activity. Banks are well capitalized and have been resilient to external shocks. Access to services in banking as a development challenge Countries are faced

with the challenge of increasing provision of banking facilities to firms and households alike. A well functioning banking sector can play an important role in channeling

resources to the best firms and investment projects. While large companies tend to be well catered for, small enterprises often have to rely on their own funds. The access to finance and the quality and cost of the service that small businesses receive from banks are the key to their profitability and prosperity (and that of the economy). For a household, the implication of a lack of access to banking services is

severe. The issue of access affects the ability of a household to receive government transfers, or to make payments or to accumulate cash surpluses for planned expenses or emergencies. Individuals who have no option but to carry cash are exposed to security risks The data suggest that only Mauritius exceeds the median values for both

branches and ATMs. South Africa exceeds the median values for ATM provision only. It is widely agreed that access to financial services can help to distribute opportunities more evenly, especially for poorer households and small businesses. Discussions about access inevitably revolve around changing supply conditions so that the needs of the consumers can be met and usage encouraged. Policy to encourage access must, however, take the objectives of financial stability into consideration.

Conclusion: Foreign banks started doing business in India as there are many business opportunities available. India is potential of business. Foreign banks have great impact on the Indian economy. They have brought in new and sophisticated technology. The Indian scenario of banking is changed with the evolution of foreign banks in India. The services of foreign banks are very sophisticated. However, it would be advisable to allow the foreign banks to continue their operations within the framework of the restrictions imposed on them by the Reserve Bank Of India in such a manner that they do not encroach upon the fields allocated to Indian banks.

References: 1. www.bom.mu/ 2. http://mauritius-vmoksha.com/provideclarity.htm 3. http://www.business-standard.com/india/news/mauritius-beckonsindian-banks/317202/ 4. http://www.tradechakra.com/india-business-opportunity.html 5. http://www.tradeinvestafrica.com/feature_articles/471767.htm

INSURANCE SECTOR IN MAURITIUS

Mauritius, a small island economy in the Indian Ocean off the coast of Africa, has

been remarkably successful in achieving rapid economic growth in the context of financial and political stability.

This success is in sharp contrast to the poor economic performance of most

neighboring countries in the African continent and has been attributed to the pursuit of stable macroeconomic policies and the creation of a regulatory framework that encourages private sector development.

Many countries of the economy have benefited which include the financial sector.

They have to rouse the growth of banks as well as insurance companies and pension funds. The authorities have avoided using price and product controls and imposing Instead of relying on direct controls, they have placed greater emphasis on prescribed investment requirements on financial institutions. applying sound prudential regulations to ensure that financial institutions are able to compete and innovate without undermining the security of the financial savings of the public The possible performance of the insurance sector is universally assessed with Insurance penetration is defined as the ration of premium underwritten in a Insurance density is defined as the ratio of premium underwritten in a reference to two parameters namely, insurance penetration and insurance density. given year to the gross domestic product. given year to the total population. The insurance sector worldwide has fared well in 2010, with the world insurance premium volume amounting to 4.3 trillion USD which represents a growth rate of 6% as compared to 2009. Gross premium for Africa increased by 16% to reach 66 billion USD in 2010.

Governing Authority: Insurance regulation and supervision is entrusted upon the Financial Services Commission (FSC). There are many strong elements in the present framework like reliance on solvency monitoring, prudent asset diversification, international accounting standards and actuarial methods. To conduct the insurance business activities the Financial Services Commission, under the Insurance Act, provides licenses to insurance/reinsurance companies as well as insurance service providers like insurance brokers, insurance agent, insurance manager, insurance sales person and claims professionals.

COMPARATIVE POSITION OF INSURANCE SECTOR WITH INDIA

Comparative points Regulatory authorities Financial Commission (FSC) Mauritius Services Insurance India Regulatory and

Development Authority (IRDA) Tariff Advisory Committee Insurance Association of India, Councils and Committees

Growth of insurance In sector 26%

2010,

the

Ombudsmen long-term The Indian economy registered an general 2009-10 following 6.7 % in 08-09

insurance sector grew by impressive growth rate of 7.4 % in whereas insurance sector grew by

Premium underwritten

11% as compared to 2009 Gross premium rose by 19%, representing 68% of life premiums and 32% of non-life insurance premiums

The

total by

premium the crores crores life as in

underwritten was

insurance sector in 2009-10 2,65,450 2,21,785 against

2008-09 exhibiting a growth of 19.69 % (10.15 % in 2008-09)

Underwritten premium of the non-life insurers was 35,816 crores in 2009-10, as against 31,428 crores in 2008-09 registering a growth of 13.44

Insurance Penetration percentage

Insurance

% penetration The insurance penetration was

(premium as a percentage 2.32 % (Life 1.77 % and Non life of GDP), at 5.86 %, has 0.55 %) in the year 2000 when the been growing in real terms, sector was opened up for private especially insurance sector through sector It had increased to 5.20 % 0.6 %) continuing growth in the life in 2009 (Life: 4.60 % and Nonlife:

POLICIES AND NORMS FOR INSURANCE IN MAURITIUS

Insurance comes under Category 1 Global Business Companies (GBC1) GBC1 must not have transactions with Mauritian residents or in Mauritian currency. No minimum capital is prescribed and GBC1 can have only one shareholder, but the shareholder must not be resident in Mauritius. Provided they demonstrate that their management and control is in Mauritius, GBC1 are regarded as tax resident in Mauritius and can take advantage of Double Taxation Avoidance Treaties (DTAs) between Mauritius and other countries. DTAs normally provide for a preferential rate of withholding tax on payments (e.g. dividends, interest, and royalties, technical and other fees) made by investees in the DTA country to the GBC1. GBC1 are taxed at 15% less tax credits such that the effective tax rate is a maximum of 3%. They are not subject to Capital Gains Tax (CGT), as there is no CGT in Mauritius.

Indicative criteria to be fulfilled by GBC1, to show that their management and control is in Mauritius, include: Minimum of 2 resident directors capable of exercising independence of mind and judgment; Holding of board meetings in Mauritius and demonstrating that central management and control is in Mauritius; Maintenance of all accounting records; The use of local bankers; Local substance is supported by having local corporate secretary and administrators, auditors, and office facilities and staff. GBC1 are supposed to file annual audited financial statements prepared in agreement with International Accounting Standards or other Internationally Accepted Accounting Standards with the FSC. Insurance companies Suitability For establishment of offshore captive insurance and reinsurance companies Mauritius is very suitable because tax incentives are offered, registration procedures are completed in short time, running costs are low and infrastructure is well developed.

POLICIES AND NORMS FOR INSURANCE IN INDIA

A. REGULATORY AUTHORITIES 1. Insurance Regulatory and Development Authority [IRDA] 2. Tariff Advisory Committee [TAC] 3. Insurance Association of India, Councils and Committees 4. Ombudsmen B. REGISTRATION OF INSURANCE COMPANY Every insurer aspiring to carry out the business of insurance in India is supposed to possess a certificate of registration from the IRDA before commencing business. The

pre-conditions for applying for such registration have been set out under the Act of 1938, the IRD Act and the various regulations prescribed by the Authority. 1. General Registration Requirements (a) The applicant would need to register his/her company under the provisions of the Indian Companies Act, 1956. Consequently, any person intending to carry on insurance business in India would need to set up a separate entity in India. (b) The total equity participation of a foreign company in the applicants company should not be more than 26 % of the paid up capital of the insurance company. However, the Insurance Act and the regulations there under provide for the manner of computation of such 26 %. (c) The applicant can carry on any one of the following life insurance business general insurance business or reinsurance business

(d) Words like insurance company or Assurance Company should be there in the name of the applicant. 2. Capital Structure Requirements (a) A lowest paid up equity capital of rupees 1 bn if applicant wishes to carry out the business of life insurance or general insurance. (b) A lowest paid-up equity capital of rupees 2 bn, if applicant wants to carry out exclusively the business of reinsurance. In determining the aforesaid capital requirement, the deposits to be made and any starting expenses incurred in the formation and registration of the company would be included. A promoter of the company is not allowed to keep with them more than 26 % of the paid-up capital in any Indian insurance company. 3. Procedure for obtaining a certificate of registration An applicant desiring to carry out insurance business in India is required to make a requisition for a registration application to the IRDA in a prescribed format along with all the relevant documents

C. REGULATORY FRAMEWORK 1. Deposits Every insurer carrying out insurance business in India, deposit with the Reserve Bank of India for and on behalf of the Central Government of India the following amounts: With respect to life insurance business, a sum equivalent to 1% of his gross premium written in India in any financial year commencing after 31 day of March, 2000, not exceeding Rs 100 million. With respect to general insurance business, a sum equivalent to 3% of his gross premium written in India in any financial year commencing after 31 day of March, 2000, not exceeding Rs 100 million. With respect to re-insurance business, a sum of Rs 200 million. If business done or to be done is marine insurance only and relates exclusively to country craft or its cargo or both, only rupees 100,000 should be deposited with RBI. 2. Valuation of Assets Liabilities and Solvency Margins An insurer should maintain an excess of his assets over the amount of his liabilities of not less than the relevant amount arrived in the following manner(required solvency margin) (a) With respect to an insurer on life insurance business the necessary solvency margin shall be the higher of Rs 500 million (1 billion in case of re-insurers) or the aggregate sum arrived at based on the calculations specified in the Insurance Act. (b) With respect to an insurer carrying on general insurance business, the necessary solvency margin shall be the highest of the following amounts: Rs 500 million or A sum equivalent to 20 % of net premium income or A sum equivalent to 30 %of net incurred claims

D. INSURANCE INTERMEDIARIES 1. Insurance Agents

All persons who desire to act as an insurance agent for any insurer would have to be registered as such under the provisions of the insurance act and the IRDA Regulations, 2000. A license issued under the provisions of the insurance act entitles the holder to act as an insurance agent for any insurer 2. Insurance Surveyors and Loss Assessors An insurance surveyor is a technical expert who inspects the damage of an insurance company. The insurer, based on the estimation of damage of the surveyor, arrives at the amount of compensation payable to the assured... 3. Third Party Administrators Under the provisions of the IRDA Regulations, 2001, the Third Party Administrator, who has obtained a license from the authority, and is engaged for a fee or remuneration, as specified in the agreement with the insurance company, for the provision of health services. Conclusion: The global financial and economic crisis has affected profitability in many ways non-life insurance companies around the globe. Claims ratios in many countries have raised countries have risen as the number of premiums written dropped and/or claims themselves increased in frequency and size. More obvious still have been the declines in investment income. By the second half of 2009, conditions had started to improve and many non-life insurers had started making profits. In any case, the crisis provided insurers with a harsh reminder that they cannot rely on investment income to deliver results, and they must refocus on the factors that drive underwriting ratios, to achieve sustained growth.

CAPITAL MARKET IN MAURITIUS

The Capital Markets in Mauritius is one of the most dynamic sectors of the economy. The governing legislation, the Securities Act, based on international norms and standards, In comparison with other small islands in the Indian Ocean region, Mauritius is a leader in financial services , with a notable offshore banking sector. The offshore banks in Mauritius suggest a wide range of services including foreign exchange dealing, lending, deposit taking, trade finance, offshore trust and securities and fund management. [1]

ROLE IN THE ECONOMY OF MAURITIUS:

A capital market is a market for long term debt and equity securities, where It is normally divided into two broad categories - the stock market and the bond The stock market is the market where equity securities such as stocks.

business enterprises and governments can raise funds for long term investment. market. Representing ownership shares in particular corporations issuing the securities are traded.

On the contrary, bond market comprise of long-term borrowing or debt

instruments such as treasury notes and bonds, corporate bonds, mortgages securities etc.

FUNCTIONS OF CAPITAL MARKET:

Capital market connects the monetary sector with the real sector and therefore facilitates growth in the real sector and economic development. The fundamental channels through which capital market is connected to economic growth and development can be outlined as follows:
Capital market increases the section of long-term savings (pensions, funeral

covers, etc) that is channeled to long-term investment. Capital market enables contractual savings industry to mobilize long-term savings from small individual household and channel them into long-term investments.
It fulfills the transfer function of current purchasing power, in monetary form, from

surplus sectors to deficit sectors, in exchange for reimbursing a greater purchasing power in future. In this way, capital market enables corporations to raise capital/funds to finance their investment in real assts.[2] [3] [4]

BUSINESS ACTIVITIES OF CAPITAL MARKET:

Investec Capital Markets offers extensive range of specialist products and services focusing on specialized lending and treasury activities for corporate and commercial clients. Banking & Lending Aircraft Finance Asset Finance Export & Agency Finance Financial Markets Group

Project & Infrastructure Shipping Finance Specialist Corporate Resources finance [5]

Finance

Capital

COMPARATIVE POSITION OF MAURITIOUS CAPITAL MARKET WITH INDIA AND GUJARAT

Proposed tax reforms are threatening Mauritius dominant position as the preferred foreign investment tool for India The irony of the double tax agreement (DTA) between Mauritius and India is that lawmakers in New Delhi were the ones who initially pushed for it. The year was 1982 and India was looking to drum up foreign direct investment (FDI) from wherever it could. Indian FDI statistics indicate a swing toward Singapore, but the jurisdiction remains some distance behind Mauritius.

The portion of funds emanating from Singapore has grown from 3% in 20062007 to 8% in 2010-2011. Mauritius accounted for 30% of India's $2.4 billion in FDI in the 2004-2005 fiscal year and then 45% of the $24.5 billion that came in three years later. Although its share has since fallen, it still stood at 35% in 2010-2011.

Any company in possession of a tax residency certificate issued by the Mauritius authorities qualifies for DTA coverage and therefore isn't levied on capital gains arising from investments in India. [6]

POTENTIAL FOR IMPORT / EXPORT IN INDIA / GUJARAT MARKET

India Imports and Exportation Rules Indian export regulations are much more liberal, but, similar to India imports rules, they are designed to protect the national economy. Many types of finished products such as clothing, textiles and jewelry, are exported freely, but raw materials such as wood, metals and minerals, as well as agricultural and animal products, are restricted. The reasoning behind this is that the government wants to keep cheaper national resources and raw products available to their own people, rather than becoming dependent upon foreign resources.

BUSINESS OPPORTUNITIES IN FUTURE

The foreign investor is allowed to invest in any sector of the economy subject to the provisions of the Non Citizen Property Restriction Act, 1975 which generally restricts non-citizen from acquiring real estate.

Mauritius has removed significant foreign investment barriers by lowering taxes, simplifying administrative procedures, keeping interest rates low, investing in education and training and by lowering trade barriers and maintaining the preferential access on the main markets.

Mauritius has no capital controls, a relatively stable currency, a low flat corporate tax rate of 15 percent, and a large number of double taxation avoidance agreements; together, these attributes sometimes make Mauritius more attractive than larger financial sectors for businesses. [7]

CONCLUSIONS AND SUGGESTIONS:

Mauritius: A well-managed economic regime: Mauritius has always displayed receptivity to new ideas and adaptability. At various points in its history, Mauritius has used intervention, subsidization, and targeting to adapt to the shifting economic circumstances by crafting imaginative public policy to adapt to shocks.

Mauritius also has proven very adept at embracing new sectors, particularly light

manufacturing, offshore banking and financial services, and service-related information and communication technology (ICT).
However, Mauritius needs to further diversify its financial sector In order to move

to the next stage in financial sector development. While the financial sector is generally sound and profitable, the dominance of a few major players and the concentration of risks within a narrow banking sector pose certain systemic risks and inhibit competition and innovation. The Mauritian financial sector is currently in good health, and the short-term constancy risks are modest. The principal risks facing the domestic financial system are linked to the structure of the underlying economy. References:
1. http://www.tradechakra.com/economy/mauritius/capital-markets-in-mauritius-

311.php
2. http://web.idrc.ca/en/ev-56334-201-1-DO_TOPIC.html 3. http://www.ukessays.com/essays/economics/equity-commodity-investment.php 4. http://www.scribd.com/doc/53732009/suresh-rathi 5. http://post.investec.co.uk/#home/lending_and_financing/aircraft_finance0.html 6. http://www.gov.mu/portal/site/Businesshomepagesite/menuitem.ec7f52d3396b39

5fbbb27610e2b521ca/
7. http://indiahighcom-mauritius.com/doing_business_mauritius.php.

INVESTMENT SECTOR IN MAURITIUS

Mauritius is one of the leading and fastest growing economies in the World. It is one of the attractive and safe locations to invest for both local and foreign investor. It attracts major international companies in various industry sectors for trade & Investment. With a strong commercial focus in Mauritius Investment, Jurist consult acts as a central resource for local and international clients. Mauritius is one of the best investment decisions with many markets in globalization. There is hybrid system of English & French laws both so the commercial, banking and financial laws in the country require specialist expertise. Their expert team of Mauritian lawyers offers advice to investors and claims expertise in investment laws. This country maintains close contact with different Ministries, Public Authorities and the Board of Investment to help their clients in a proactive manner with healthy relationship.

The Board of Investment (BOI), which is established under the Investment

Promotion Act in 2000, it is the national agency of the Government of Mauritius & it, is responsible towards promoting and facilitating of investment in the country & it also transforming itself into a competitive global business platform. The dedicated expert team of professionals at BOI provides professional This institute has developed a well-built partnership with the private sector by guidance for successful business launches by investment in the country. improving investment climate and encouraging innovation in new opportunities.

BOI always ready for very close relationship with (High Commissions,

Embassies, General Consuls and Honorary Consuls) Missions of the Republic of Mauritius worldwide. The national Investment Promotion Agency (BOI) structured under the sponsorship of the Ministry of Finance and Economic Development. These Services provided by BOI of free-of-charge to investor:

They provides counseling on investment opportunities in the country They gives tailor-made information for the setting up of a business in the country Org. of experts customized meetings and visits with them They gives identification of joint venture partners & strategic alliances

They guides with site locations and production facilities as well as helps for getting occupation permits licenses and clearances.

Before starting operations, businesses must register with the Registrar of

Companies. Regulations governing incorporation are contained in the Companies Act of 2001. After receipt of a certificate of incorporation from the Registrar of Companies, all companies must register their business activities with the BOI to be able to apply for occupation permit and other facilities offered to investors. With headquarters in the country, & international offices in London, Paris and Mumbai BOI provides fully guidance to investors who interested to explore investment opportunities in the country. With strong industry expertise and international exposures, the BOI's professional team of multidisciplinary experts is well-equipped to provide invaluable guidance for successful business launches and investment ventures in the country. In globalization over the years, the BOI have developed a strong alliance with the private sector by constantly improving the business environment and the investment climate as well as encouraging innovation by new investments. Such rules of BOI must be followed by investors: They have to maintain at all times their principal bank account in Must have at least two directors, who are resident in Mauritius, with Mauritius; sufficient ability of judgment & independence of mind & caliber;

They have to prepare their statutory financial statements and/or causes for At least two directors are from Mauritius must in the meetings of directors; They have to keep and maintain their accounting records at their

having such financial statements to be audited in Mauritius;

registered office in Mauritius.

Within only 10 days Business can start with following steps:

PRESENT RELATIONSHIP OF MAURITIUS WITH INDIA

Mauritius & Indian Investment Freedom in last 10 year: World Average Mauritius India

The encouraging double taxation treaty among the two jurisdictions is now ideal

surrounding for entities that providing FDI in India & many investment and hedge funds have been incorporated in it exclusively for the intention of capitalizing on the return provided by the Mauritius treaty. In addition, a Memorandum of Understanding signed amongst India and Mauritius helps for the effective exchange of information in the recognition of fake market practices e.g. financial & fraud crime.

Investment by in Indian corporate, replacing their investment from Singapore to Mauritius is in top 10 countries in India [Investment: Rs 247,092 crores ($55,203 India having the double Taxation Avoidance Treaty with Mauritius, under which Financial Experts says that companies prefer to investment through the famous

Mauritius, of USD 2.27 billion outward investment during April-February, 2012. million)]

the corporate get registration, can choose to pay taxes in the island nation. Mauritius route because of as low as only 3% effective rate of corporate tax on the foreign companies incorporated there & the tax levied is no more than 3%. India received $2 billion foreign direct investment in January, annual growth of 92% and captivating cumulative inflows of $26.19 billion for the period of AprilJanuary of current fiscal year. In January 2011, the country has received foreign direct investment (FDI) worth $1.04 billion.

The sectors which received large investment inflows during the 10-month period

of this fiscal are: $4.83 billion from Services, $3.20 billion from pharmaceuticals,

$1.99 billion from telecommunication, $2.23 billion from construction, $1.56 billion from power and $1.65 billion from metallurgical industries. Due to the double taxation avoidance treaty It remains the top source of inflows of ($8.91 billion).

INVESTMENT OPPORTUNITIES
Mauritius having an open and liberal economic policy, always welcoming investment in all the sectors of the economy of country, to focus on the below mention sectors: Financial Services Industry Agricultural Seafood and Marine industry Creative Industries Land-based oceanic industry Knowledge Industry Logistics and Distribution Services I T and Business Process Outsourcing Value added manufacturing and light processing Information and communication technology Healthcare and Medical Travel Hospitality and Real Estate Development Media and entertainment industry Textile & fashion industry & Jewellery Renewable Energies and Environment Biomedical and health services industry

In the country there are outstanding openings for investment in various sectors. The leather industry in Mauritius is a major area, which welcomes investment. The country is also working to attract investors in the fields of jewelry industries, diamond cutting and watch making.

PROBLEMS & PROSPECTS OF INVESTMENT

There is such type of restrictions on investment like: Invest in a security (other than a Government debt security) representing more than 5% of its NAV after the invested; invest in a security representing more than 10 % of a class of securities of that issuer; invest in real estate; invest in a mortgage; invest in a security for the purpose of controlling or management of the issuer of the security etc.

They created and maintained barriers to entry & the source of an investment or

businesss pricing power for promoting prices with no losing customers is the primary key driver to restrict competition in the market. There is some Regulations requiring licenses and levels of qualification for investment from industry participants & also the present practice of fundamentally removing front-end fees or preliminary charges and rising the on-going service fees

based on the performance and multilayer of structures is very difficult for a new player to enter & do investment in the industry with unnecessary covered complexity.

The noticeable reality is that so many people scrutinize various media articles

apparently in search of the next extraordinary return on investment or maybe the answer to that endless anxiety; is my money safe? The result is pressure on investment advisor to focus on short term success & to take unnecessary risk. This action is generally not advantageous to investors.

In investment, barriers to entry will persistently exist and may have a negative or

positive impact on investment performance and more significantly, the investors experience. The Marriott investment style is Income Focused Investing & it is the key focus driver behind investment decisions of both locally and internationally.

Prospects of investing in Mauritius are as below mention:

The Country is focusing on a multi-pronged development strategy. It is based on a liberal and open investment policy in order to achieve sustainable growth & competitive advantages in a fast globalizing world economy.

An experienced financial sector providing excellent services A very good infrastructure with superb communications Good international schools & High standard of living Free market entry financial system fixed firmly on export slanting activities Good knowledgeable financial segment provides outstanding services Democracy and a stable Government Very excellent system of sea and air transportation Favorable market access and very good incentives A free market economy anchored on export oriented activities Good constructive market contact and good inducements A highly educated, skilled, bilingual and responsive work force There is no capital expansion in tax. It allows a single document combining a work and residence permit. It allows an eligible non-citizen to reside and work in it for a maximum of three years.

In fact, three modes of entry are available for working and living in country: Either an investor, a professional, or a self-employed person.

CONCLUSION:

For healthy relation between both India and Mauritius there is need of more information and assistance, the business Centre of the High Commission serves as a facilitation point for business persons from India and Mauritius.

There are various factors that influence financiers to invest in Mauritius, like accessibility of skilled labor, political constancy, and venture-friendly institutions and regulations.

To attract foreign investors, the government gives assured enticements like: (1) On equipment & raw materials not required to give more sales tax, customs or duty. (2) 50 % free on individual income tax for emigrant employees (3) On dividends no tax is to be given (4) Gratis return of profits, bonus and funds.

The Govt. undertake to support its course into offshore banking, manufacturing and financial services, communication, technology and tourism significance of foreign investment as a basis of nourishment of the financial development.

Findings:

Mauritius is one of the best countries for investment & it is advisable opportunity to grab it in this competitive environment. There is lot of advantages in investing in the country. The economy of the country is stable and the graph of the economy and business is one the rise for a considerable period of time.

This island offers a successful & prosperous business base with competitive advantages for both regional and international trade & Investment. The Mauritius government has undertaken a sequence of strategic measures to support its course into offshore banking, manufacturing and financial services, communication, technology and tourism keeping in mind the significance of investment as a basis of nourishment of the financial development.

There are various factors that influence financiers to invest in Mauritius, like accessibility of skilled labor, political constancy, and venture-friendly institutions and regulations.