gcsr on - gujarat technological university - mauritius.pdfgcsr on mauritius country as partial...

737‐Narmada College of Management ‐ Bharuch

GCSR on

Mauritius Country

As partial fulfillment of

Master in Business Administration

By

Narmada College of Management, Bharuch

Year 2012


PART – I

General Overview of Mauritius


1.1 DEMOGRAPHIC PROFILE OF MAURITIUS


GENERAL INTRODUCTION

Despite the fact that Mauritius was known to Malay and Arabs sailors as early as the 10th century, Mauritius was 1st explored by the Portuguese in the 16th century and subsequently settled by the Dutch - who named it in honor of Prince Maurits van NASSAU - in the 17th century. The French assumed control in 1715, developing the island into an important naval base overseeing Indian Ocean trade, and establishing a plantation economy of sugar cane. The British captured the island in 1810, during the Napoleonic Wars. Mauritius remained a strategically important British naval base, and later an air station, playing an important role during World War II for anti-submarine and convoy operations, as well as the collection of signals intelligence. Independence from the UK was attained in 1968. A steady democratic system with standard free elections and a optimistic human rights documentation, the nation has attracted significant foreign savings and has earned one of Africa's uppermost per capita incomes.

Demographic data consist of most recent statistical characteristics of a population.

Demographics are important because they give general information about a population

at a given moment in time. Demographic trends are used by government to predict what

services will be needed in the future.

Population : 1, 303,717 (July 2011 est.)

Ethnic groups Groups Percentage

Indo-Mauritian 68% Creole 27% Sino-Mauritian 3% Franco-Mauritian 2%

Sex ratio At birth 1.05 male(s)/female Under 15 years 1.04 male(s)/female 15-64 years 0.99 male(s)/female 65 years and over 0.67 male(s)/female Total population 0.97 male(s)/female


Life expectancy at birth

Total population 74.48 years Male 71.01 years Female 78.12 years

Net migration rate : 0 migrant(s)/1,000 population (2011 est.)

Religion

Religion Percentage Hinduism 52% Roman Catholic 27.5% Islam 16.6% Other Christians 8.6% Other 2.5% None 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 Percentage Creole 80.5%

Urban population 42% of total population

Rate of urbanization 0.8% annual rate of change (2010-15 est.)


Bhojpuri 12.1% French 3.4% English less than 1% Other 3.7% Unspecified 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 writeTotal population 84.4% Male 88.4% Female 80.5%

Population growth rate: 0.729% (2011 est.)

Net migration rate : 0 migrant(s)/1,000 population (2011 est.) .

Urban population 42% of total population

Rate of urbanization 0.8% annual rate of change (2010-15 est.)


1.2 ECONOMIC OVERVIEW


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:-

1) Equitable Distribution System.

2) Increased Life Expectancy.

3) Lower Infant Morality.

4) 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


1.3 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.

Major Exports Major Imports

Clothing And Textiles Capital Equipment

Sugar Foodstuffs

Cut Flowers Mineral fuels, lubricants and related

products

Molasses Chemicals and related products

Machinery and transport equipment Machinery and transport equipment

Chemicals and related products Food and live animals

Food and live animals Crude materials (inedible) except fuel

The reputation of Mauritius as an International Financial Centre rests on the quality of

its services and its pool of highly qualified professionals. The (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 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 firm 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.

• 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.

PARTICULARS 2009 2010 2011 2012

Real GDP

growth

3.1 4.1 4 4.1

Inflation 2.5 2.9 3 3.9

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. Mauritius is striving to diversify its

"four-pillar" economy – sugar, textiles, tourism and financial services – to make it more

resilient to shocks, enhance productivity and competiveness, and support growth and

job creation. The 2010 budget focused on job creation, social development and the

environment. It maintained previous support measures taken by the government. For

2011, the three main thrusts of the budget are rebalancing growth, boosting productivity


and consolidating social justice. Mauritius is amongst the top successful economies of

Africa. GDP growth is expected to be 4.1% in 2011, as compared to 4.2% in 2010.it is a

free market economy.

Mauritius has strong tradition of being an entrepreneur that supports the dynamism of

private sector business. Govt. policy is such that also promotes private sector business

but also controls some key industries.

Real gross domestic product (GDP) grew by 4.1% in 2010, up from 3.1% in 2009.

Despite challenges at home and abroad, the government has maintained a growth path.

In 2011, GDP growth is projected to remain around 4%. Projections for 2012 put

economic growth at 4.1%. The overall 2010 budget deficit was estimated at 4.7% of

GDP against 6.6% in 2009. It is projected to fall back to 4.4% in 2011 and 4.3% in 2012.

The relatively high fiscal deficits are caused by rapidly increasing government

expenditure (including capital repayments) compared to revenues.

In 2010, tourist arrivals were estimated at about 934 000 compared to 871 000 the

previous year and 2010 tourism earnings were estimated at about MUR 39.5 billion, up

from MUR 35.7 billion in 2009. Gross foreign direct investment (FDI) stood at MUR 10.6

billion at the end of September 2010 against MUR 8.8 billion for the same period in

2009, a 20% gain. The investment went mainly to health and social work activities, real

estate, finance and insurance.

Import Licenses

Import permits are required for foodstuffs (milk, potatoes, corn, rice, beans, wheat,

fruits, infant formulas, food additives, spices, fats and oils, pharmaceuticals, cigarettes,

insecticides, petroleum products, cement, PVC pipes, plastic feeding bottles, corrugated

iron sheets, gold, weighing machinery, baking equipment, syringes, electric water

heaters, electric cables, motor vehicles (including used vehicles, parts and

accessories), pocket lighters (gas fuelled), crash helmets and fireworks.

Export Controls


Mauritius permits the export of all items except products of strategic importance or

whose market access is restricted by quota. Products requiring export licenses include

sugar, tea, vegetables, fruits, meat, fish, textiles, pharmaceuticals, gold, live animals,

corals, and shells.


1.4 OVERVIEW OF DIFFERENT ECONOMIC SECTORS OF MAURITIUS


Mauritius pursues an open and liberal economic policy, welcoming investment in all the

sectors of the economy, with a particular focus on the following sectors: hospitality &

real estate development, information and communication technology, seafood and

marine industry, land-based oceanic industry, biomedical and health services industry,

knowledge industry, media and entertainment industry, financial services industry,

textile & fashion industry, logistics and distribution, value added manufacturing and light

processing, and biotechnology.

The main sectors of the economy

AGRIBUSINESS

For long sugar cane cultivation has been the main agricultural activity in Mauritius. As

the era of guaranteed price and quota free access for Mauritian produced sugar on the

EU market comes to an end, the traditional sugar industry is set to transform itself into a

sugar cane cluster producing altogether several types of sugar, electricity and ethanol. It

should be noted that, Mauritius remain by far a major food importer and for this reason,

Mauritius provides the following business opportunities in the agribusiness sector.

• Fishing

• Fishing equipments

• Sea food processing activities

The manufacturing sector

Textiles

The textile sector is a significant component of the manufacturing sector in Mauritius. In

the face of the threat posed by the end of preferential access of Mauritian textile

products to export markets, the sector has re‐engineered itself, by moving away from

basic products to the higher end of the value chain. Main products exported to the EU,

Africa, USA and Asia are pullovers, textile yarn, fabrics (including jeans fabrics) and

jeans.


Non‐textiles

Sectors, other than textiles, which present favourable investment opportunities for

investors include:

• Electronics ‐ assembly of electronic products, such as computer components, laptops

and household appliances;

• Micro‐mechanics and precision mechanics ‐ manufacture of minute precision‐sets for

the electronics, aeronautics and defence industries;

• Clock and watch making ‐ assembly and production of parts and accessories;

• Energy production ‐ production of energy from renewable sources;

• Agro‐industry‐ Processing of fruits and vegetables, dairy products, precooked

foodstuffs.

• Jewellery ‐ Mauritius has acquired international recognition for the craftsmanship of its

jewellery and the precision of its diamond cutting and polishing.

Tourism sector

Mauritius is today recognised as an up-market travel destination for holiday-makers

from all parts of the world. The tourism sector offers a wide range of luxury beach hotels

ranked among the best in the world. The industry has registered high rates of growth in

the last decade and has attracted considerable FDI, particularly in the construction of

world-class hotels

Tourism is expected to take a very important place in the Mauritian economy. To

confirm this objective, the Government has decided to reach 2 millions tourist arrivals

per annum by 2015.

So, a new strategy of development has been defined: opening of the sky ; marketing

action plan to develop new markets ; ambitious programme of building with the increase


of the number of rooms and the launching of numerous Integrated Resort Scheme ; and

the organization of international cultural events.

ITC Sector

Mauritius is one of the African countries with the highest telecommunications density;

the global telecommunications density is of over 30%. Mauritius is also the only African

country with an entirely digital network; this initiative was put in place by Mauritius

Telecom, with the aid of foreign companies such as Alcatel and Sofrecom. One can

count 2,50, 000 users and approximately 30% of the Mauritian people posses a

personal computer. Mauritius additionally houses around 30 Internet Cafés.

Seafood sector

The Mauritius seafood sector is more buoyant than ever and has the ideal conditions to

attract further investments. The sea food sector has already attracted international

seafood players from countries like Spain, Malaysia, Japan, USA, Sri Lanka and France

and received investments of over MRU* one billion in 2006 . The strategy of the seafood

hub is focused on the development of value added fisheries and seafood related

sectors. In line with this strategy, investment opportunities in the following areas are

encouraged: fishing, tuna transshipment, seafood processing activities.

Hospitality and property development sector

Mauritius is perceived as an up‐market tourist destination and attracted 930,000 tourists

in 2008. With the liberalisation of air access and other measures, Government has set

an ambitious target of 2 million tourists by the year 2015. Thus, tourism is likely to

remain a pillar of the economy.

In the wake of the forecast growth in tourism and the overall policy of opening up the

Mauritian economy to the outside world, significant investment opportunities exist in the

development of new hotel projects and ancillary facilities, including:

• Marinas

• Up‐market business hotels


• Shopping malls

• Office buildings, business and industrial parks

• Gaming resorts

• Health tourism facilities

• Amusement parks.

Financial services Industry

The financial services industry comprises the banking sector (which is regulated by the

Bank of Mauritius) and the non‐banking sector (which is regulated by the Financial

Services Commission). Both sectors enjoy world‐class repute and adhere to the latest

international standards (FATF, Basel, IOSCO and IAIS) aimed at combating money

laundering and the financing of terrorist.

The SME Sector

The sector comprises about 92,000 establishments, employs some 209,000 workers

and accounts for some 20.8% of GDP (CSO Census of small establishments released

in 2007). As part of the assignment of the consultant, a Perception Survey of 40

enterprises comprising very small, small, and medium and a few larger enterprises was

carried out. The survey showed general satisfaction of entrepreneurs with business

performance. Also over the past few years, firms’ have innovated products, adopted

new technologies and management processes alongside substantial investment in

equipment. Turnover improvements have been achieved alongside quality, know-how

and operational management improvements. The financial situation is rated as quite

satisfactory. However, employment has stagnated.

SMEs have financed operations to a large extent, through own funds and have sufficient

liquidity and working capital. Finance is required for investment in modern and

performing equipments. However, market intelligence is lacking and SMEs do not


undertake systematic export market research while there is lack of strategic

international partnerships.

The business environment for SMEs is in general not regarded as very conducive,

although education, vocational training, banking, infrastructure and business process

streamlining are considered as positive factors. The lowest rating is that of research and

development. Trade visits, improved assistance for process and product innovation,

export market information and strategy advice of high professional standards are

required. Support on operational issues such as finance, management or business

plans elaboration is not considered of high relevance. SMEs wish a slower pace of tariff

liberalization.

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 90’s decade with later 90’s 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.

Banking Sector

• The banking provisions particularly focuses on giving effective directions on the

bank’s 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 supervisor’s

eastern and southern African banking supervisors group.

ites/nictspncb/nictsp1/FRep0715.pdf


1.5 Overview of business and 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 world’s 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 Supervisor’s 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 (SME’s) 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.

• Through the adoption of the best international practice in laws and regulations,

Mauritius has over the fifteen years, quickly matured into a respected

international financial service Centre. The country has made the easy regulatory

practice and conductive business environment for increasing number of business

in Mauritius.

• GLOBAL BUSINESS COMPANIES: There are two types of business companies

in Mauritius, category 1Global business companies and category 2 Global

business companies. Both type of companies are set up under the Companies

Act 2001 and licensed under the Financial Services Development Act 2001.Thus,

a qualified global business is defined under the Financial Services Development

Act (FSDA) 2001 as a corporation holding either a Category 1 or a Category 2

Global Business License.


• Category 1 Global Business license: - A Global Business Corporation (Category

1) is a corporation which undertakes activities listed in second schedule of the

FSDA 2001.

• Aircraft financing and leasing

• Asset management

• Employment services

• Information and communication technology

• Insurance

• Licensing and franchising

• Operational headquarters.

• Trading

• Any other activity as may be approved by the commission

Category 2 Global Business license: A category 2 global business license company is carried on by private company.

• The company is incorporated and registered under the Companies Act 2001

• The company does not conduct business with persons resident in Mauritius nor conduct any dealings in Mauritius currency.

• The company holds a Category 2 Global Business License.

According to the WTO, trade represented 135.3% of Mauritius’ GDP from 2006-2008.

In 2008, goods exports totaled close to $2.4 billion while goods imports totaled over

$4.6 billion. Also in 2008, commercial services exports totaled over $2.5 billion while

commercial services imports totaled over $1.9 billion.

MAJOR IMPORTS AND EXPORTS

According to the ITC (International Trade Centre), the top five export categories

for Mauritius in 2008, along with proportion of total exports, were:

1. Items of apparel and accessories prepared of knot or crochet (23.4%)

2. Merchandise not specified in another place (13.1%)


3. Sugar confectionery and Sugars (12.4%)

4. Articles of apparel and accessories not prepared of knit or crochet (11.6%)

5. Mutton, fish, and ocean food preparations (9.2%)

According to the ITC (International Trade Centre), the top 5 import categories

for Mauritius in 2008, together with proportion of total imports, were:

1. Mineral fuels, lubricates, distillations goods, etc. (21.5%)

2. Nuclear reactors Boilers, machines, etc. (7.7%)

3. Electronic and Electrical utensils (6.8%)

4. Fish, crustaceans, mollusks, and water invertebrates (6.1%)

5. Vehicles other than railway (4.8%)

Mauritius' global merchandise trade relationships: Mauritius' principal export destinations, 2010:

Mauritius' principal import sources, 2010:

1 United Kingdom

23.7% 1 India 22.3%

2 France 16.2% 2 China 13.3% 3 United States 10.9% 3 France 8.8% 26 Australia 0.4% 6 Australia 3.1%


1.6 PRESENT TRADE RELATIONS AND BUSINESS VOLUME OF DIFFERENT PRODUCTS WITH INDIA/GUJARAT


Economic & Commercial Relations: Bilateral trade between India and Mauritius over the last ten years is indicated below: (In

Million US$)

Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

India’s Exports to

Mauritius

203 258 199 738 1089 1007 453

India’s Imports from

Mauritius

8 7 7 15 10 14 11

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 encourage

industrialization.

• Government has made simple rules and regulation and lowering the

transaction cost for legal procedure.

• Government also made generalization in duties and levies in input products

which is used in India.

• Also provide better technology and make alteration in infrastructure in all

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

relation to come in to foreign trade.

• Revitalizing the Board of Trade by redefining its role.

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.

1.7 PESTEL ANALYSIS


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 country’s 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, worker’s compensation and unemployment

benefits, maternity benefits.


• A government is joining hand with the UN’s 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 network-

centered 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, walls…etc

Environment is taking into account in various texts: o Environmental Guidelines,

o Environmental Legislation (including EIA),

o Tourism Guidelines,

o Planning schemes for coastal areas, integrating environmental aspects,

o Many sector-based studies,

o EIA committee (including several Ministries),

o 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

Various sectors of Mauritius

1. Financial Sector 2. Offshore Sector 3. Tourism Sector 4. Infrastructure Sector


FINANCIAL SECTOR OF MAURITIUS

Introduction: • In today’s 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 over

USD43bn.


• It is also emerging as a Private Banking hub, especially in the light of an 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.


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.

BANK OF MAURITIUS

FINANCIAL SERVICE

COMMISSION

BANK OF MAURITIUS

DOMESTIC BANKS

OFFSHORE BANKS

THE DEVELOPMENT & ENTERPRISE

MARKET

INSURANCE INVESTMENT

THE STOCK EXCHANGE OF

MAURITIUS

FINANCIAL STRUCTURE OF

MAURITIUS

CAPITAL MARKET


•

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 country’s 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 (SME’s) 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 Mauritius’s newly constructed tower

Headquarters At the Port Louis in Mauritius

Governor Mr. Rundheer sing Bheenick

Central bank of Mauritius

Currency Mauritian rupee

Code MUR ISO 4217

Website 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 growth

ensuring the sound system.

• It controls the reserves from the foreign countries by managing the clearance,

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

compliance in the terms of governing framework.

• The provisions of the Banking Act 2004 and the BOM Act 2004 help in regulating

and supervising the institutions.

• BOM also provide the facilities as a money changers and foreign exchange 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 them

• Managing the debt for the public

• Managing the reserves for the purpose of foreign exchange

• 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

information of the financial sector.


• But as per the sources it found that BOM is very keen on signing the MoU with 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‐beckons‐indian‐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

prescribed investment requirements on financial institutions.

• Instead of relying on direct controls, they have placed greater emphasis on 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

reference to two parameters namely, insurance penetration and insurance density.

Insurance penetration is defined as the ration of premium underwritten in a

given year to the gross domestic product.

Insurance density is defined as the ratio of premium underwritten in a 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 Mauritius India

Regulatory

authorities

Financial Services

Commission (FSC) Insurance Regulatory and

Development Authority (IRDA) Tariff Advisory Committee

Insurance Association of India,

Councils and Committees

Ombudsmen

Growth of insurance

sector

In 2010, the long-term

insurance sector grew by

26% whereas general

insurance sector grew by

11% as compared to 2009

The Indian economy registered an

impressive growth rate of 7.4 % in

2009-10 following 6.7 % in 08-09

Premium

underwritten

Gross premium rose by

19%, representing 68% of

life premiums and 32% of

non-life insurance premiums

The total premium

underwritten by the life

insurance sector in 2009-10

was 2,65,450 crores as

against 2,21,785 crores in

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

(premium as a percentage

of GDP), at 5.86 %, has

been growing in real terms,

especially through

continuing growth in the life

insurance sector

The insurance penetration was

2.32 % (Life 1.77 % and Non life

0.55 %) in the year 2000 when the

sector was opened up for private

sector It had increased to 5.20 %

in 2009 (Life: 4.60 % and Nonlife:

0.6 %)

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 applicant’s 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 business

enterprises and governments can raise funds for long term investment.

• It is normally divided into two broad categories - the stock market and the bond

market.

• The stock market is the market where equity securities such as stocks.

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 Finance

Shipping Finance

Specialist Corporate Capital

Resources finance [5]


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

2006-2007 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.ec7f52d3396

b395fbbb27610e2b521ca/

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

guidance for successful business launches by investment in the country.

• This institute has developed a well-built partnership with the private sector by

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

Mauritius;

Must have at least two directors, who are resident in Mauritius, with

sufficient ability of judgment & independence of mind & caliber;

They have to prepare their statutory financial statements and/or causes for

having such financial statements to be audited in Mauritius;

At least two directors are from Mauritius must in the meetings of directors;

They have to keep and maintain their accounting records at their

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, of USD 2.27 billion outward investment during April-February,

2012.

• Mauritius is in top 10 countries in India [Investment: Rs 247,092 crores

($55,203 million)]


• India having the double Taxation Avoidance Treaty with Mauritius, under

which the corporate get registration, can choose to pay taxes in the island

nation.

• Financial Experts says that companies prefer to investment through the

famous 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

April-January 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 Value added manufacturing and light processing

Agricultural Information and communication technology

Seafood and Marine industry Healthcare and Medical Travel

Creative Industries Hospitality and Real Estate Development

Land-based oceanic industry Media and entertainment industry

Knowledge Industry Textile & fashion industry & Jewellery

Logistics and Distribution Services Renewable Energies and Environment

I T and Business Process Outsourcing 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 business’s 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

investor’s 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.


MAURITIUS OFFSHORE SECTOR

SUMMARY REPORT

OF PART II


Chapter 1

INTRODUCTION OF THE OFFSHORE SECTOR IN MAURITIUS What is off shoring?

Off shoring describes the relocation by a company of a business process from

one nation to another—typically an operational procedure, such as

manufacturing, or supporting processes, such as bookkeeping. Even state

governments make use of offshoring. More in recent times off shoring has been

associated primarily with the sourcing of technological and organizational

services supporting home and worldwide operations from exterior the residence

nation, by means of internal (captive) or external (outsourcing) delivery model.

-By Stephan Manning, Silvia Massini, Arie Lewin.

AN OFFSHORE BUSINESS CENTRE MAURITIUS :

Over the earlier period, the Mauritian economy has observer constant increase in

the GDP. In order to maintain this tendency, the government of Mauritius is trying

to spread an economy that relies closely on farming and industrialized.

The Mauritian government is promoting offshore actions that will not merely set

Mauritius on its mode to turn into the regional financial hub but also an global

financial and trade centre. different types of offshore actions have already been

recognized, together with offshore fund management, investment companies,

operational head office offshore captive assurance, overseas safety companies,

ship management, financial services and consultancy, shipping, aeroplane

financing and rental, and trading.(4)

How Mauritius is promoting itself as an offshore destination:


Gartner's Top 30 locations for offshore services in 2010, by region, are: Gartner, Inc. has identified the Top 30 countries for globally sourced activities in

2010-2011 Americas: Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and

Peru. Asia/Pacific: Bangladesh, China, India, Indonesia, Malaysia, the

Philippines, Sri Lanka, Thailand and Vietnam. Europe, the Middle East and Africa (EMEA): Bulgaria, the Czech Republic,

Egypt, Hungary, Mauritius, Morocco, Poland, Romania, Russia, Slovakia, South

Africa, Turkey and Ukraine.(1)

MAURITIUS COMPARED TO OTHER OFFSHORE DESTINATIONS

COSTS,TALENT POOL & RISKS & OTHER STRUCTURAL FACTORS.

(1) Key drivers are the lower salaries in Mauritius and in some cases, lower telecom costs relative to peers

Breakup of direct operating cost per FTE per annum


2) TALENT POOL;

Mauritius is well positioned to support Anglo-French markets that

require both French and English languages. Mauritius offers robust

capabilities in both French and English language skills

3) RISKS & OTHER STRUCTURAL FACTORS.

Mauritius is a relatively stable location with well developed infrastructure and

conducive business environment

Mauritius has made significant investments in enhancing infrastructure for

IT/BPO

Establishment of IT Parks (e.g., EbeneCyber City)

Telecom costs have been declining by ~30% each year.

Connection to the fiber optic cable is expected to provide additional

bandwidth and further cost reduction

Corruption perception index of Mauritius is 5.5 (2)

Drivers of business risk Business environment


MAURITIUS PROVIDES ATTRACTIVE INCENTIVES FOR INVESTORS

Sources: Everest Research (2009)


Confidentiality Provisions Make Mauritius an Ideal Offshore Destination: Besides the regular advantages of tax exemption or ease of business setup what

attracts foreign business owners to Mauritius are the strict confidentiality clauses

in the policies towards offshore companies. One of the main reasons a lot of

individuals around the world prefer to setup an offshore company is because they

need confidentiality. They do not want the shareholders or other details publicly

available or available for scrutiny by the general public. However, in most

countries popular for offshore company setup, the records of the directors,

shareholders and other beneficiaries are always maintained as public records.

This is not the case in Mauritius. Foreign business owners can easily incorporate

an offshore company in the country and have their records fully secure. Their

details would not be available for public scrutiny unless and until the Supreme

Court of Mauritius asks for the records to be made public in case of financial

fraud cases.

The only other time the records of an offshore company may be handed over to

someone else is if there is a need to investigate the company due to global

terrorism fears, money laundering fears or if there is any other serious corruption

charges which need to be probed further. Other than that, any information

disclosed to the concerned authorities during the registration process of the

Mauritius offshore company is always kept strictly confidential. Even banking and

financial institutions are required to keep their clients records confidential and

typically information can be accessed by company shareholders or directors only.

Since Mauritius provides offshore business owners with all benefits and

advantages provided by the other popular destinations around the world, along

with the confidentiality clause Mauritius clearly becomes one of the most

preferred locations to setup an offshore company. Also the improving

infrastructure of the country and its developing economy has become quite

attractive for global entrepreneurs and investors.(5)


There are 10 reasons why one should invest in Mauritius: Mauritius is

having everything which attracts investors ,business & also tourists.

1) The location of Mauritius is very easy to get to ,which is between the South

Atlantic Ocean and the Indian Ocean and is in a suitable time zone for simplicity

of business . It is 4 hours ahead of the UK, 4 hours at the back of Asia and 2

hours in front of South Africa.

2) Among the few countries Mauritius is the one to boast positive gdp growth all

through the global economic slump..Due to good investment policies &

progressive business it has seen a growth movement of about GDP 5-6% per

year.

3) It is a country which is open for business: The government’s economic

improvement policies, as well as attractive tax incentives for business and

investors, are boasting growth of the island’ as a major investment and financial

centre.

4) Mauritius is having an Competitive edge over other countries as it is

developed as a top-notch offshore financial and investment centre for both the

private and profitable sectors positions the island to benefit from the up-and-

coming African and Asian markets.

5) The government of Mauritius is dedicated to a fiscally smart process, as the

budget deficit is now at 3.8% ,which was 5.5% .

6) Mauritius is a country where democracy is alive and sound. Investors have

harmony knowing that Mauritius is habitat to a steady and democratic political

environment which is present from 40 years.

7) The country is sanctified with almost perfect weather, boosts nominal crime

and high levels of personal security.

8) Mauritius always had tourism growth a high main concern; but it is also a

forecast that there is strong demand for villas in the rental market. By 2015 the

government is planning to boost the number of tourist visits to 2 million which is

1 million at present.


9) A lot of opportunities for foreign possession: Under the Integrated Resorts

Scheme (IRS) the non-residents of Mauritius can buy & own full title to property

in Mauritius in approved developments. Though in its infancy, the scheme has

already seen outstanding growth, with investors enjoying appreciations of 40-

50% on IRS properties

10) Additional benefit of being a resident in Mauritius like the IRS programme

offers several advantages, together with no capital gains and inheritance taxes

and a low 15% income tax rate. Investors also receive a additional benefit of

automatic residence for them & there dependents.

Integrated Resort Scheme (IRS)

To strengthen & boost the country”s growing tourism industry & also to

encourage foreign investment the government has introduced the Integrated

Resort Scheme (IRS).The advantage that the out of the country investor gets

include:

Usual residency for the proprietor and immediate dependents

Personal income tax rate low by 15%

If you sell, no capital gains tax

No inheritance tax

Also due to a double tax treaty with 34 countries the easy flow of funds is

possible.


Some important facts about tax system: 1) There are no withholding taxes on dividends paid out of income from approved

offshore activities

2) There is no withholding tax on interest

3) There is no capital gains tax

4) There is no estate duty or inheritance tax to be paid on the legacy of shares in

an offshore unit

5) There is no exemption from stamp duties on all documents relating to offshore

business transactions.

Mauritius is a sophisticated Offshore Financial Center (OFC) having exclusively

flexible legislation. It has concluded 35 tax treaties.

Chapter 2

INTRODUCTION OF THE OFFSHORE IT SECTOR OF MAURITIUS

According to the NCB IT Supply Sector Survey Report - Sep 1997 by Price

Waterhouse, the recent advances in information technology have become central

to the process of socio-economic development. The competitive and comparative

advantages of countries are gradually being determined by access to information

technology and knowledge. South Africa, where the average person listens to

radio for more than four hours every day, Mauritius is an example of country with

a vibrant radio landscape, including but not limited to community radio. Since

1992, Mauritius has endeavored to define itself as a regional platform for offshore

business activities, promoting its advantages of liberal economic policies, a high

literacy rate and a pool of bilingual personnel. The Information and

Communication technology (ICT) sector is very dynamic and contributing

significantly to the Mauritius economy. 1


The offshore IT sector of Mauritius has grown at an average of over 8% a year

for the last decade and contributes approximately 10% of GDP, with banking

(6%) and offshore activities (3%) being the major subsectors. Because of

Mauritius’ favorable tax position vis-à-vis India; approximately a third part of all

foreign direct investment in India is channeled through Mauritian-registered

offshore companies.1

At present there are more than 250 companies working in the ICT sector,

involved in a large range of activities together with software development, call

center, Business Process Outsourcing (BPO), IT-Enabled Services (ITES),

training, hardware assembly and sales, networking and other support services.

Advances in ICT have enabled the expansion of business process outsourcing

(BPO) in Mauritius. In 2003 there were around 20 BPO firms, employing around

1000 workers. The number of firms had increased to 185 by March 2007 and

employment had risen to around 7000 workers. Companies providing BPO (45

per cent), software development (20 per cent) and call centers (18 per cent)

dominate the ITES (Information Technology Enabled Services) .BPO sector in

Mauritius.1

In Mauritius, most international brands in IT hardware are present through

authorized resellers - IBM, Digital, HP, Compaq, SUN etc. The big software

names present are Microsoft, Oracle as well as developers of packages

(CAD/CAM, Accountancy etc.) through resellers. The big five Accountancy firms

are also present – Price Waterhouse, Coopers &Lybrand, Peat Marwick,

Andersen Consulting (through local partner), Ernst &Young. The main MNCs

(apart from Accountancy firms) present are Oracle and Microsoft.1

PRESENT POSITION AND TREND OF BUSINESS WITH INDIA

Bilateral Trade: India has been the one of the major exporters of commodities

and services to Mauritius since 2007 till 2010. As far as FY 2010-2011 is


concerned Department of Commerce, Government of India figures indicates that

India exported goods worth US$ 801.56 million to Mauritius and imported goods

worth US$ 16.51 from Mauritius. These figures indicate that India continued to be

the top supplier for Mauritius.2

T-1. Imports & Exports between India and Mauritius

(Source: India-Mauritius Relations, February 2012)

Bilateral Investment: According to the Department of trade rule and advertising,

the inflows of cumulative FDI from Mauritius to India during the phase April 2000-

April 2011 amounted to US$ 55.203 billion (42 % of the total FDI equity flows into

India) over this period which makes Mauritius the largest FDI source for India.

Mauritius was the single largest source of Foreign Direct Investment (FDI) into

India during the financial year 2010-11, with FDI equity inflows amounting to US$

6.987 billion or 35.97 % of total FDI equity inflows during the period. According to

Bank of Mauritius figures, in 2010, India was the second largest investor in

Mauritius after the UK with US$ 96 million. According to the Government of

Mauritius, Indian companies have invested over US$ 200 million in Mauritius in

the last five years.2

Indian PSUs in Mauritius: Telecommunications Consultants of India Ltd.;

Mahanagar Telephone Mauritius Limited.2

Major Indian Assisted Projects: Rajiv Gandhi Science Centre, Cyber Tower,

World Hindi Secretariat set up jointly by the Governments of India and Mauritius

is located in Mauritius.2


Lines of Credit: The total line of credit offered by India to Mauritius at the current

exchange rate translates to Indian Rs. 1032.75 crore. All the LOCs to Mauritius

have been extensive on LIBOR rates of interest. for the duration of the Visit of

Mauritian Prime Minister Dr. Navinchandra Ramgoolam to India in February

2012, an economic package comprising credit line of US $ 250 million and a

grant of US$ 20 million was offered to Mauritius by India.2 beneath the Indian

technological and ITEC (Economic Cooperation) programme, about 120 civilian

officials from Mauritius undergo training in Indian institutions every year. A

bilateral contract also provides for delegation of up to 20 ITEC expert to

Mauritius.2

PRESENT TRADE BARRIERS

Civil Disturbances and Political Instability: A factor accounting for the lack of

development in telecommunication in the region has been the absence of

political stability. India has an unwritten policy that favors countertrade (a form of

trade in which imports and exports are linked in individual transactions). The

State Trading Corporation handles very small amount of countertrade. Private

companies are encouraged to use countertrade. Global tenders usually include a

clause stating that, all other factors being equal, preference will be given to

companies willing to agree for countertrade.3

POTENTIAL FOR INDIA

Bilateral contracts with Mauritius: India and Mauritius have signed various

bilateral contracts. a few of the important contracts are the twofold Taxation

Avoidance Convention (1982), MOU on Science and Technology Cooperation

(2012), MOU on Sports and Youth Affairs (2012), Educational Exchange

Programme (2012), MOU on Textiles (2012), and MOU between RGSC Trust

Fund and NCSM for setting up a hybrid planetarium (2012). In addition, Cultural

Exchange Programmes have been regularly concluded since 1971.4


Defense Cooperation: A bilateral Agreement for ‘the Supply of an Offshore

Patrol Vessel (OPV) to the Government of Mauritius’ is currently being

implemented with the OPV being designed and constructed by GRSE Ltd. at a

cost of US$ 58.5 million (funded partly by the EXIM Bank line of credit (US$ 48.5

million) and partly by GOI grant (US$ 10 million)). Goodwill visits of Indian Naval

Ships to Mauritius also happen regularly. Indian Naval ships carry out annual

hydrography-related tasks in Mauritian waters.4

IDENTIFICATION OF BUSINESS OPPORTUNITIES IN FUTURE

Mauritius offers excellent business opportunities in the IT industry cluster. The

offshore ICT (Information and Communication technology) division is dynamic

and contributing significantly to the Mauritian economy. ICT sector in Mauritius is

the main pillar of the economy and is a rapid growing and high efficiency activity.

Mauritius is focusing on the service sector of the ICT and providing offshore

facilities to western nations.5

Opportunities Building stronger cooperation and investment links with India

More effective partnerships between firms and the universities, including

through work-study internship programmes

SME cooperation in meeting foreign demand, international marketing and

sharing human resources5

SUGGESTIONS

Decision makers would be able to promote effective economic management and

good governance; and for businesses to complete more effectively with timely

and accurate market information.5

• Design mechanisms and policies which ensure adequate infrastructure for

universal access, i.e. foster private sector investment which also extends to

underserved areas.

• Ensure regional coordination in planning new infrastructure as well as when

operating existing infrastructure.


• Increase financial support for infrastructure – in particular IT – and target

countries and regions which are significantly underserved.

• Improve information-sharing within the country, including freedom of

expression and support for consumer awareness groups.

• To gain track record in the deployment of complex IT solutions

• To increase IT literacy5

CONCLUSION

In view of the importance of foreign investment as a source of sustenance to

economic growth, the government of Mauritius has taken a series of policy

measures to encourage its flows into manufacturing, offshore banking and

financial services, information technology, communication and tourism. As far as

foreign investors are concerned, Mauritius offers itself as an attractive destination

because several positive features such as political stability, availability of skilled

labor and investment-friendly rules and institutions.6

There are excellent opportunities for investment in Mauritius in sectors of the

economy like manufacturing, information technology, knowledge industry,

regional headquarters, tourism and leisure, financial services and other sectors.6

Chapter 3

BANKING SECTOR

The banking sector comprises the Bank of Mauritius (the central bank), nine

offshore banks and ten commercial banks, five of which are locally incorporated

and five are branches of foreign banks. There exists an active interbank forex

market. Treasury bills are auctioned weekly on the Primary Money Market. A

Secondary Money Market also exists whereby bills can be transacted

on any day. Commercial banks determined the interest rates. The money market

of interbank is highly active.


Mauritius is a highly monetized economy. Popular payment instruments of any

banks in general are are cheques that are in the form of booklets issued by the

respective banks, credit cards and debit cards are also called plastic money. The

project of introducing e-cash is still in its preliminary stages. Cheque clearing is

performed three times daily at the Bank of Mauritius at 10 a.m., noon and 3 p.m.

On average about 410,000 cheques and other instruments totaling Rs11 billion

are cleared every month.

PRESENT RELATIONSHIP WITH INDIA TRADE AND COMMERCE.

The common forum of India and Mauritius trade relations are FICCI(Mauritius

Chamber of Commerce and Industry). The trade and business community of

respective countries are being presented by FICCI. The common goal of this

relationship is to enhance the ethical business activities for each other.

Indo-Mauritius trade bonding with the best

The seminar organized by the Economic times, Indo- Mauritius trade and

investment, the delegates, the senior people belonging to India and Mauritius,

the potential trade relation between the two countries. They also said Mauritius is

the gateway for the investment in Africa. Tourism also plays a important role in

bringing the two countries. Mauritius is also the source to open in the different

market due to its petro and oil based economy. Indian companies can explore

the possible opportunities in different market and take benefit of the recession of

the economy. Mauritius is also the attractive route for SME. Indian players have

already participated in the niche market of Mauritius such Taj and oberoi in

tourism sector, Apollos and Fortis are gointg to set up its hospitals.2

India and Mauritius Signed Four Agreements

1. To supply an offshore petrol vessel

2. Cooperation in a tsunami early warning arrangement.

3. Agreement for cultural cooperation

4. Standardization, testing and quality certification.


Apart from these agreement, India has announced to extend the line of credit to

48.5 million US $, a grant of 10 million US $, as the Mauritius is facing the

problem of Sea Priacy.3


IDENTIFICATION OF NEW POSSIBILITIES

Banks see good growth in Mauritius operations

Indian and foreign banks operating in Mauritius are seeing good growth in

business as Indian companies look to expand operations in Africa.

In fact, Mauritius is fast catching up with larger international financial centres

such as London and Singapore, given its position as a gateway to Africa.

According Standard Chartered Bank data, over the last two years, trade between

India and Africa has touched $40 billion and is expected to grow to $70 billion by

2015.

“London, with its inward-looking legislation, is crowding out companies. Most of

the latest regulations by its banking commission are extremely protectionism-

oriented. Because of this change, Mauritius is becoming more relevant,” said Mr

Sridhar Nagarajan, Chief Executive Officer, Standard Chartered Bank

(Mauritius). The total offshore banking business that flows through Mauritius is

close to $150 billion, he added.

EXPANDING SERVICES

Traditionally, Mauritius was considered a sugar-cane centre, catering to the

demands of European countries.

But the trend is slowly changing to a more advanced business centre especially

for banking and offshore business, said a senior official from Bank of Baroda,

which also has a significant presence in Mauritius.

Both BoB and StanChart cater to the local population and also offer offshore

banking services to Indian and other corporates wishing to enter Africa.


The services include term loans and working capital; trade services, such as

discounting of bills drawn in major currencies, remittance facilities for settlement

of trade/investment transactions and global liquidity management for corporates.

StanChart also offers custodial services for companies that want to invest in

Africa.

Indian companies setting up operations in Africa include firms in such sectors as

IT, telecom, agriculture, agro-processing, irrigation, mining, power and

pharmaceuticals.

StanChart Mauritius has seen assets grow at a compounded annual growth rate

of 22 per cent over the past five years. As of 2010, the asset base was over $3

billion. The bank has invested close to $57 million over the last two years in its

Mauritius operations, Mr Nagarajan said.

For BoB, too, business growth in its Mauritius operations has been around 25 per

cent, said the official. The bank has seven branches and will add one more

before the end of the current financial year. It also has an Offshore Banking Unit

Mauritius bank only focusing on corporate clients and urban consumers,it can

expand its branches in low income group and provide them services at affordable

cost.4

POTENTIAL FOR INDIA

“On February 2005- Reserve bank of India has declare a statement that in year

March 2005-2009, the restrictions that are on foreign banks in India with respect

to branch operations, will be set up as wholly owned subsidiaries. They will have

the liberty to buy 74% of stake in private banks. But also minimum capital

requirement would be 300 crore. But in order to control the foreign banks

operations to some extent, RBI has also stated that it cannot buy the local banks


but can buy only weakly operation banks which can ultimately said as sick

banks5


Mauritius beckons Indian banks The two major public sector banks SBI (State Bank of India) and BOB (Bank of

Baroda) working in Mauritius can find great opportunities with regard to tax

concession.

The Governor of Bank of Mauritius has said that they are actively participating in

the future and forward market of foreign exchange; this will help to create the new

instrument for the new entrepreneurs that will actively participate in the financial

service sector.

For this they are expecting help from Indian banks who are well experienced.

The opportunity of future and forward market will help the

banks to hedge the risks by entering into the contract of

currency in advance6

ISLAMIC BANKING IN INDIA

Islamic banking has a huge potential in India as India is 3rd largest Muslim

populated country in the world. It can address the long drawn issue of Financial

inclusion and will create a feel good factor among Muslims.

It would help to increase the size of the banking industry manifold and prove to

be a foundation for many more innovations to be introduced in the future33

(Retrieved from :- Future potential of Islamic Banking in India-CRISIL Young

Thought Leader By Pawandeep)

PROBLEMS&PROSPECTS


As such there is no trade barrier according to me, because the trade barrier

between the two countires has been resolved with the the help of the

negotiations, instead to enhance the trade between the two counties, Bilateral

trade Agreement has been negotiated between the two countries. FICCI has

come into existence to enhance and create the ethical business activities

between the two countries.

SUGGESTIONS

In order to survive in the competitive world, it becomes necessary for banks to

adopt the international best practices. These may take into account the

marketing of the products, exposure of the risk, adoption of the technology, but

this is only a one side of the same coin.

International banks are also learning from the local banks by adopting SME and

agribusiness practices.

This all ultimately impact the profit, capital adequacy of the banks which leads to

their efficiency and lastly affecting the customers to whom the products are to be

provided at affordable prices.

There should be equality between the Indian banks and foreign banks, there is a

obligation of Indian banks lending 40% in priority sector while its only 32% for

foreign banks.

There should be quick access for the foreign banks to open the branches, and

reduce government restriction though, revised guidelines still foreign banks are

facing constraints which impact their footprint and customer base7

There should be a restriction on branch opening, RBI should permit the license of

12 foreign banks but instead it is giving permission to foreign banks to open new

branches that is going beyond their commitment of the regulatory authority.


While granting licenses to these banks, the Reserve Bank should put restrictions

on the size of deposits raised by them.

In order to restrict the flight of capital abroad, the exchange banks should not be

allowed to transfer their profits/capital to their head office abroad.

CONCLUSION

The banking system is one of the institutions that impinge on the economy and

affect its performance for better or worse. Banks as the development agency are

the source of hope and inspirations to the masses.

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.8

Chapter 4

OFFSHORE INSURANCE

An offshore assurance company, generally referred to as a 'captive' assurance

company, is generally a subsidiary of a big company or cluster of companies,

and its reason is to recommend insurance inside the parent company or group,

thus saving outside costs and generating income in a low-tax rule. The fiscal

profit are not of necessity the driving reason, but they can be important. straight

access to reinsurance is a further significant benefit of a captive. (1) (retrieved


from http://www.lowtax.net/lowtax/html/jmuoltr.html#offshore and www.ocra.com)


INTRODUCTION OF THE INSURANCE SECTOR IN MAURITITUS

The Mauritius the insurance sector has experienced a good development.

Mauritius Insurance makes use of reinsurance amenities and rules on a wide

extent. The Mauritius Insurance is also open-minded from the all-surrounding

premium, reinsurance controls and manufactured goods rumor. The insurance

parameter is determined by Financial Services Commission. In the year 2004,

the total premium from the insurance of Mauritius amounted to 4.1% of the total

GDP. The Life Insurance policies at Mauritius consists 61% of the total insurance

premium.

In Mauritius, motor insurance is one of the most important types of insurance.

The insurance sector at Mauritius is very aggressive that works with reasonable

profitability and high competence. Life Insurance policies at Mauritius have

benefited from the growth of housing finance and pension business. einsurance

is another important advantage of a captive. (2) (Retrieved from http://www.mapsofworld.com/maurititus/economy-and-business/insurance.html)

Present Trade Barriers

Looking to the development in service sector, the world insurance sector has

grown at a very reduced pace and this is because of trade barriers according to

the view of some managers. On-tariff barriers have a important crash upon global

trade in services. overseas straight investment and market entrance policy theory

do not sufficiently address the significance of trade obstacles in the decision

making process. While the basic market entry strategies as well as specific entry

strategies for insurance firms are well established, its seen that the service firms

necessitate to set up home presence to be winning. The firms are not capable to

come in a market because it is obstructed by trade obstacles; a few researchers


propose managers keep in exact entrance strategies or planned actions to

overcome hurdles. (3)

http://digitalcommons.pace.edu/dissertations/AAI9717121 Business Opportunities in future

The future growth of the insurance industry depends on continuous

macroeconomic stability, sound rules and prevention of company failures and

scandals that would affect the good reputation of the industry. The leading

companies should be innovative and efficient and also should be receptive to the

changing needs of their customers. The main challenge is strengthening the

effectiveness of supervision and modernizing the legal and regulatory framework.

The industry can flourish by heartening weak firms to merge or exit the market ,

this in turn will help contribute to sounder competition and better security

As part of the new framework, detailed standards should be issued covering the

constitution and methods of calculation of reserves and provisions and the

amount of credit for amounts recoverable under reinsurance arrangements to

ensure that all companies follow sound policies

The market is huge and untapped areas can be looked for so as to increase the

market share. The private insurance companies have been able to grab more

customers than expected by introducing innovative products, smart marketing ,

and aggressive distribution. Before people used to have view of life insurance as

tax saving device, but now they are interested in this innovative products.

SUGGESTIONS

The capital adequacy standards should be according to the international practice.

The EU standards on solvency margins are broadly used and are not hard to

watch over. A solvency margin based on average net claims over a specified

period i.e between 3 and 7 years depending on the volatility of losses should be

introduced to complement the solvency margin that is based on net premiums. A


positive solvency margin requirement for long-term business should also be

applied. The application of EU-type solvency standards could be seen as a

transitional step toward the requirements that take into account the volatility in

the market values of assets and liabilities.

Consolidation of the insurance industry needs to be promoted to ensure sounder

competition and greater safety. This can be achieved by raising the level of

minimum capital and introducing risk-based capital requirements as well as by

encouraging weak firms to merge with other firms or exit the market. The need to

cover the high-risk segments of the motor insurance market could be addressed

more effectively by supporting the creation of a national pooling arrangement by

the Insurers Association.

An insurance information bureau should be formed with data on underwriting

policies, loss claims and incidents of insurance fraud. The bureau should make

possible sharing of these data by all licensed companies and should contribute

toward higher underwriting standards. Competition policy should prohibit the

practice of tied sales whereby customers of large companies are forced to buy

several services from the same group. These practices discriminate against

smaller firms.

A compensation fund should be created to cover the unpaid claims of failing

companies and protect policyholders, mainly in connection with life and annuity

policies.

CONCLUSION

The Mauritian Insurance industry has traveled a long way ever since its

inception. The insurance industry is an important component of the financial

infrastructure of any economy, and its viability and strengths have far reaching


consequences for not only its money and capitalmarkets,' but also for its real

sector.

The insurance industry has developed to a great extent because of innovative

goods & channels for distribution. A very large portion of the population is

covered and thereisgreat potential for investors to investin this sector


Chapter 5

INVESTMENT FUND MANAGEMENT SECTOR

Introduction of offshore Investment fund management Mauritius did not, until in recent times, legislate specially for combined

investment proposals. The financial service Act 2007 has codified the framework

for collective investment schemes in Mauritius.

Funds are usually incorporated as public companies beneath the companies Act

1984 (now the companies Act 2001), and are referred to as savings companies.

Funds are working from Mauritius must create a prospectus whose content is

managed by a set of FSC rules. Funds must fill full financial statements with the

FSC semi-yearly and yearly.

Investment companies have right to use to Mauritius dual Tax Treaties: for

details of their tax action usually, see offshore lawful and Tax Regimes. charges

to be paid are a USD500 (at the time of writing) licensing processing fee and a

USD1500 annual license fee.

Source: www.lowtax.net/lowtax/html/jmuobs.html

BUSINESS ACTIVITIES OF OFFSHORE FUND MNAGEMENT SECTOR

The incorporation and organization of Offshore Companies and global

Companies, which were formerly formed under the separate global Business

Companies Act 1994, have been brought under the Companies Act 2001, and

the two types of company are at the present known as international Business

Company 1 and international Business Company 2

Source: www.lowtax.net/lowtax/html/jmuobs.htm

Business opportunities:


foreign investment as a source of substance economic growth, the

government of Mauritius has taken a series of policy measures to

encourage its flows into manufacturing, offshore banking & financial

services

overseas direct investment has played an significant role in the

development of Mauritius & will again be decisive when the country

embarks on high value added, capital intensive & knowledge base

activities.

Mauritius pursues liberal investment policy & actively encourages foreign

direct investment in all sectors of economy. Attractive packages of both

fiscal & non fiscal incentives, tailor made to the needs of each priority area

of development, are offered to investors.

Mauritius finance industry expanded by an annual rate of 7.6 % over the

last four years, making it the most resistant sector to the global financial

crisis.

Problems & prospect of business or trade of Mauritius with India

Mauritius India Trade links – rule accepted by India

• Take away government wheel also creating an environment of trust and

clearness to encourage industrialization on trades.

• Simplification of profit-making and lawful procedures and bringing down

business deal charges.

• Generalization of tax and duties on inputs utilized in overseas products.

• Facilitate hi-tech and infrastructural change of one and all the divisions of

the Indian economy, particularly through imports and thus increasing value

add ups and output, at the same time attain global standards of quality.

• Neutralize reversed duty structures and ensure that India’s household

sectors are not deprived in the Free Trade contracts/regional Trade


contracts/favored Trade contracts that India go in to regulate and

develop exports.

• Transformation of infrastructural system, both material and practical,

connected to the whole overseas Trade chain, to worldwide standards.

• Refreshing the Panel of Trade by redefining its role.

• Connecting Indian Embassies as an significant member of overseas plan

and connecting all marketable houses at worldwide locations through an

electronic stage for genuine time trade, intellect, and inquiry and

information distribution.

India Mauritius Trade relationships-rule accepted by Mauritius

• Investment promises to encourage combined ventures

• Recognize matter of buy and sell and investment

• Enhance mutual deal

• Take into custody unlawful trade between the two countries

The forum of Mauritius India trade relationships has suggested upcoming plans

to:

• Promote Indian investments in Mauritius and combined India-Mauritius

investments into the area.

• Boost Indian investment and shift of recognize-how and technology, which

would boost the development of economic in the region.

Further more, marvelous opportunity exist for the collaboration between the two

countries in a equally advantageous way, assist by:

• Mauritius India JBC-A combined business forum which showcase every

others merchandise to their individual commerce and deal associates to

encourage each others commerce and deal.

• The India Mauritius JBC uses their individual trade partner’s business and

trade agreements to facilitate business and trade promotion of each other.


business.mapsofindia.com

Present Position and Trend of Business with India during last 3 to 5 years

India, amongst the European depositors, is considered to be a high-quality

investment regardless of political hesitation, bureaucratic hassleslack of authority

and infrastructural deficiencies. India currently a vast potential for abroad

investment and is aggressively encouraging the entrance hall of overseas

players into the marketplace. No company, of any size, aspiring to be a

worldwide player can, for lengthy ignores this nation which is supposed to turn

out to be one of the top three up-and-coming economies.

According to the division of Industrial rule and advertising, inflows of cumulative

FDI equity from Mauritius to India during the era April 2000-April 2011 amounted

to US$ 55.203 billion, amounting to 42 % of the total FDI equity flows into India

over this period making Mauritius the single largest FDI source for India.

Mauritius was the single largest source of Foreign Direct Investment (FDI) into

India during the financial year 2010-11, with FDI equity inflows amounting to US$

6.987 billion or 35.97 % of total FDI equity inflows during the period. According to

Bank of Mauritius figures, in 2010, India was the second largest investor in

Mauritius after the UK with US$ 96 million. According to the Government of

Mauritius, Indian companies have invested over US$ 200 million in Mauritius in

the last five years.

www.qfinance.com ›

Suggestions

Mauritius, with its strong textile sector, has been well poised to take

advantage of the Africa Growth Mauritius has attracted US$10.98 billion in

Foreign direct investment inflows. So Mauritius has to make more efforts

towards the FDI.


The World Bank 2009 Doing trade Survey ranks Mauritius 1st in Africa

and 24th in the earth for ease of doing trade. The government’s purpose is

for Mauritius to grade amongst the 10 majority investment- and business-

friendly locations in the globe. So it has to make hard work towards that

road.

Conclusion:

Lastly we conclude that having more international funds listed on the SEM will

boost Mauritius image as a financial center. The foreign direct investment into

India is routed through Mauritius to take advantage of tax treaty the country has

with India. Mauritius has positioned itself as an active service provider for those

investing in friendly emerging markets.

BIBLIOGRAPHY

Chapter 1

1 www.gartner.com. Saturday, March 10, 2012, 4:28:36 PM

2 Everest Research (2009)<Sunday, February 19, 2012, 9:27:52 PM>

3 Mauritius: Offshore Business Sectors Wednesday, December 21, 2011,

11:33:20 AM

4 http://www.maurinet.com/busoff1.html

5 www.Offshore Company Setup Guide.com Saturday, February 18, 2012,

2:50:17 PM

6 http://www.theaddressmagazine.com/2010/02/why-you-want-to-invest-in-mauritius/ Saturday, March 10, 2012, 4:08:42 PM

7 www.Op2i.com Saturday, March 10, 2012, 3:14:03 PM


Chapter 2

1. “Report on the Information Technology Industry Development Programme: Mauritius National IT Strategy Plan (NITSP)”, by NITSP IT Industry Development Working Team, National Computer Board, Mauritius, 1998

2. “Dynamic Business Partner: Investor Friendly Destination”, Investment and Technology Promotion Division, Ministry of External Affairs, Government of India, March 2007

3. “Doing Business in India-Strategic & Practical Considerations”, IMaCS Virtus Global Partners, January 2010

4. “Mauritius: Dynamising Export Competitiveness” prepared by S. Lall Economic Affairs Division Commonwealth Secretariat, London

5. “Mauritius: Towards an Information Based Economy” - a publication produced jointly by World Bank and NCB in 1995.

6. “Vision 2020” a publication of the Ministry of Economic Development & Regional Cooperation of Mauritius

Chapter 3

1. http://www.bis.org/cpss/paysys/Mauritius.pdf 2. http://articles.economictimes.indiatimes.com/2009-04-

15/news/27661410_1_india-and-mauritius-naina-lal-kidwai-hsbc-group 3. http://www.jagranjosh.com/current-affairs/india-and-mauritius-signed-four-

agreements-1287814583-1 4. http://www.thehindubusinessline.com/industryandeconomy/banking/article29042

ee 5. http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4145 6. http://business-standard.com/india/news/mauritius-beckons-indian-banks/317202/ 7. http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4145

Chapter 4 (retrieved from http://www.lowtax.net/lowtax/html/jmuoltr.html#offshore and

www.ocra.com)

1. (Retrieved from http://www.mapsofworld.com/maurititus/economy-and-

business/insurance.html)

2. http://digitalcommons.pace.edu/dissertations/AAI9717121


TOURISM SECTOR

INTRODUCTION OF TOURISM SECTOR

In Mauritius, tourism is the significant contributor in the economic growth and in

the overall development of Mauritius. For beach resort tourist Mauritius is a

holiday destination. It has a wide range of natural and man-made attractions.

Low impact, high spending tourism is emphasized by The National Tourism

Policy. The number of tourist arrivals expected by Mauritius Government by

2015 is 2 millions tourist arrivals per annum. So, ”opening of the sky” is defined

as new strategy of development.. Tourism to Mauritius has experienced

consistent growth in recent years. One of the tourist attractions of Mauritius

tourism sector is the high quality of hotels and outstanding service at reasonable

price. The industry has continuously upgraded the quality of accommodation to

outfit to the demands of the International traveler.

How and best time to visit Mauritius

Air Mauritius and Condor manage direct flights to Mauritius from Germany from

Frankfurt and Munich.

Mauritius can also be reached by direct flight from most major capitals in

Western Europe. In Mauritius the climatic conditions are mild. The best time to

visit island is between the months of April and June as well as between

September and December.

The Prime attractions are:

Clear warm water and endless white beaches

Golf

Water sports

Deep-Sea Fishing

Kite-Surfing


Medical tourism

Green tourism

Tourist villages

Shopping

Duty & Customs

Weddings & Honeymoons

Sky-diving

Cruises

Night Life

ROLE OF TOURISM SECTOR IN THE ECONOMY OF MAURITIUS

During the last decades there was huge development in Mauritius. Initially it was

depended mainly on sugar, but gradually it has diversified its economic activities

into, textile and apparel industry, tourism and financial services. The country is

equipped with a highly skilled labour force and a very good infrastructure thereby

attracting Foreign Direct Investment. The number of tourists visiting Mauritius

rose 5 percent year-on-year in the first quarter, helped by a rise in arrivals from

France, one the Indian Ocean island's most important markets.

BUSINESS ACTIVITIES OF TOURISM SECTOR

Activities of tourism sector Mauritius tourism sector is rich in high quality of hotels and excellent service at

reasonable price. Some of the famous hotels in Mauritius are Le Sofitel,

Legends, Le Touessrok and Belle Mare Plage.

Setting up business in Mauritius for tourism


For setting up business in Mauritius for tourism activities license from tourism

authority has to be obtain.

The Tourism Authority regulates activities in the Tourism sector, as follows:

•Issues licenses for the regulation of the tourism industry;

•Establishes standards, guidelines and code of practice;

• Monitor compliances with established standards, guidelines and code of

practice.

Among the licenses regulated by the Tourism Authority, there are:-

Tourist Enterprise License (TEL)

An enterprise has been issued “A Tourist Enterprise License” This establishment

or activity focuses on providing services or goods to tourists for reward, whether

monetary or otherwise.

Pleasure Craft License (PCL)

A Pleasure Craft is issued to a vessel used for the recreation or pleasure of the

person carried thereon; and includes a recreational platform or floating craft.

It is important to note that there are restrictions on foreign investment for some

types of activities/enterprises such as pleasure craft (commercial use), tourist

accommodation (non-hotel sector), nautical activities, etc.

COMPARATIVE POSITION OF TOURISM SECTOR WITH INDIA AND GUJARAT

India known as “ Incredible India” is the known for its natural and cultural

resources. India also has many World Heritage Sites, both natural and cultural,

rich fauna, and strong creative industries in the country. while Mauritius “An

island of beauty and charm...” is well known as holiday destination with a wide

range of natural and man –made attractions. Mauritius is complemented by its


multi ethnicity and cultural population. And Gujarat a state of India is unique for

its geographical features and longest shoreline.

Tourist Attractions in India, Gujarat and Mauritius

India is a country which is also known for its lavish treatment to all visitors.

The main attraction is spiritual tourism. Yoga, ayurveda and natural health

resorts and hill stations also attract tourists. The Indian handicrafts mainly,

jewellery, carpets, leather goods, ivory and brass work are the main shopping

items of foreign tourists. Gujarat‘s attraction are exotic wildlife, 400

archaeological sites, enchanting art forms, magical festivals and much more.

While Mauritius has beaches, golf, kite-surfing, cruises as prime tourist

attractions. Apart from these prime attractions Mauritius is rich for its flora.

Initiatives to Boost Tourism The government of India has taken many initiatives to enhance its tourism

including grant of export house status to the tourism sector and incentives for

promoting private investment in the form of Income Tax exemptions, interest

subsidy and reduced import duty. Moreover, the campaign ‘Visit India Year

2009’ was launched at the International Tourism Exchange in Berlin, aimed to

project India as an attractive destination .By presenting a wide range of

incentives and bonuses during April and December,2009 government joined

hands with leading airlines, hoteliers, holiday resorts and tour operators. Tourism

department of Gujarat has been assisted by GUJTOP in undertaking various

activities. It also includes development of tourism infrastructure projects on Public

Private Partnership format, assisting government in policy development and

many other initiatives. While Mauritius adopts The National Tourism Policy to

prompt tourism in Mauritius which emphasizes low impact, high spending

tourism. It favors selective, up-market and quality tourism. The Mauritius

government adopted a new strategy of development which has been called as

“opening of the sky” marketing action plan to develop new markets.


Future Prospects In India travel and tourism is expected to grow by 8.2 per cent between 2010 and

2019 and will place India at the third position in the world.

By employing 40,037,000 by 2019, India's travel and tourism sector is

expected to be the second largest employer in the world.

Capital investment of India's travel and tourism sector is expected to

grow at 8.8 per cent between 2010 and 2019.

India to get capital investment worth US$ 94.5 billion in the travel and

tourism sector in 2019 is forecasted by the report.

By 2010-2019 India is projected to become the fifth fastest growing

business travel destination with an expected real growth rate of 7.6 per

cent.

While tourist arrivals expected by the Mauritius Government is 2 millions per

annum by 2015. The investment made by government in infrastructure, aiming to

transform the country into a world-class, tax-free shopping, business and leisure

destination is MUR250 billion.

Minister of Finance is of the view that tourism shopping in Mauritius has immense

scope for the generation of annual turnover of MUR7.0 billion especially from

supply of items such as designer apparel, gems and jewellery (island made).

This figure could increase to MUR20 billion by 2020 according to an estimate.

Primarily The Government have targeted to attract around 200,000 visitors

every year from emerging markets like India, China, Russia and the Middle East,

as well as traditional markets like Europe, who are particularly brand conscious

people.

Constraints

Both India and Mauritius have limited availability to adequate infrastructure,

inaccessibility to tourist spots, accommodation and trained staff in insufficient

number. Sometimes visitors suffer mainly due to inadequate infrastructural

facilities, poor hygienic conditions and incidents of touting and harassment of


tourists in some places .These factors have contributed to poor visiting

experience. Prices charged to tourists generally are too high and bad conditions

of road are also major constraints faced by tourist.

PRESENT POSITION AND TREND OF BUSINESS OF MAURITIUS

WITH INDIA AND GUJARAT

Mauritius has developed from being a low-income economy with heavy reliance

on agriculture to a middle-income diversified economy with a fast growth in

industrial, financial, tourist and other sectors. It is one of the sub-Saharan African

continent with a sound econmy. The growth of sugarcane is about 90% of the

cultivated land area and it accounts for 25% of export earnings. The Government

is focusing more on the expansion of various local financial institutions in its

development strategy. Government is also taking initiative to build a strong

telecommunication industry domestically.

Indian connection

In 2010, India was the most dynamic source country, with arrivals

accounting to 50,700. The increase in arrivals was specifically due to

India’s strong economic growth, even during the global recession, cultural

linkages and the historical popularity of Mauritius as a tourist destination.

Along with the 6% share of overall tourist arrivals, India was ranked the

seventh largest inbound tourist market in 2010.In October 2004, the

Mauritian Government introduced a visa-free regime for Indian tourists.

Under the regime, Indian tourists visiting Mauritius for a period up to 60

days do not require a visa, provided they show sufficient funds to cover

their stay. 53,955 tourists from India visited Mauritius in 2011. In 2009, the

total number of tourist arrivals from India to Mauritius were 39252 whereas


in 2011 it was 53955, thus there is rapid increase in number of tourist

visiting Mauritius from India.

Luxury market profits from up-coming countries

Mauritius, Being a luxury destination is benefiting from consumers

entering the middle classes in fast growing markets such as India, China

and South Africa. These markets are experiencing rapid growth in their

economy. As a result of this growing wealth, growing interest in premium

accommodation, as well as more sophisticated high-spending activities,

such as water sports, diving, fishing and shopping, is expected from

tourists from these countries there is a huge profit due to luxury market

from the emerging countries.

Positivity in forecasts since Mauritius has diversified into one of the niche markets.

In order to be ahead in this cut throat competitive world, the Tourism

Minister has planned to diversify into niche markets, with a budget of

MUR100 million which was reasonably set aside to pay for campaigns in

2011. The country even plans to diversify its market by drawing more and

more visitors from Russia, India and China with an aim to attract a total of

150,000 tourists from these up-coming economies by 2012. Also, in order

to differentiate itself from other summer holiday resorts, such as the

Maldives and the Seychelles, the country is making aggressive promotion

of green tourism, creating its image as a cultural and eco-tourism

destination, with nature reserves and wildlife parks as prime attractions for

tourists. Other niche markets include weddings and honeymoons, golf,

medical tourism, and duty-free shopping.

Mauritius as Africa’s financial, business and trading hub

Mauritius is known as “Singapore of Africa’. According to a report of

World Bank “Doing Business 2011” Mauritius have been ranked as


the easiest place for doing business in the Sub-Saharan Africa and

20th globally among 183 economies

During a period of 2010-2020, the Government is planning to invest

MUR250 billion in infrastructure, aiming to transform the country

into a world-class, tax-free shopping, business and leisure

destination.

According to the Minister of Finance, tourism shopping in Mauritius

has the potential to generate an annual turnover of MUR7.0 billion

from the supply of items such as designer apparel gems and

Jewellery (island made). This figure could however increase to

MUR20 billion by 2020.

The Government have targeted to attract around 200,000 visitors

every year from emerging markets like India, China, Russia and the

Middle East, as well as traditional markets like Europe, who are

particularly brand conscious people.

POLICES AND NORMS FOR TRAVELING TO MAURITIUS

Requirements for Mauritius’ citizen to travel to India (Tourist Visa) Passport must be valid for at least six months.

Application form must be filled in block letters.

Two recent passport size photographs one of them should be affixed with

application form.

A confirmed return air ticket.

A travelers cheques or receipt of US $50 per day to live in India

Or there must be an Indian sponsor who takes guarantee of all expenses

of a particular tourist.

A letter of bank that tourist is financially capable to meet his or her

expenses in India.

Zerox copy of credit card with a letter from bank indicating its limit.

Proof of place to stay in India for ex. Hotel booking


Requirements for Indian citizen to travel to Mauritius (Tourist Visa, Business Visa)

All travelers should have at least six month valid passport.

Visitor must hold a valid return ticket to the country of origin.

Travelers should have the adequate funds to meet costs in Mauritius.

Visitor must be eligible to re enter into his or her country of origin

Indian tourists may be issued tourist visa for the period of two weeks on arrival at

Mauritius under conditions mentioned above.

Transit Visa

A transit Visa may be granted to an Indian passenger traveling to a third country

provided him or her:

If a visitor leaves by the first available flight

Visitor must have a valid onward ticket

The departure of flight must be confirmed.

Visitor must have funds to meet adequate costs of transit.

If transit needs to extend above twenty four hours then visa must be obtained by

the visitor before traveling.

People coming to Mauritius for following purpose needs to obtained visa prior to

arrival in Mauritius.

Religious purpose

Employment purpose

Study purpose

Visa is required to enter into Mauritius except for:

Citizens of Mauritius, their children & spouses

Resident of Mauritius under immigration Act

Passport holders of following countries: European Schengen Member

States: Portugal, Spain, France, Germany, Belgium, Luxemburg,


Netherlands, Italy, Denmark, Sweden, Finland, Austria, Greece, Poland,

Slovakia, Hungary, the Czech Republic, Latvia, Lithuania, Estonia and

Malta,

Diplomatic passport holders other than those issued by following

government: Algeria, Iraq, Iran, Libya, Sudan, Democratic Republic of

Congo, Nigeria, Yemen, and Afghanistan

Persons who intend to remain in Mauritius only during the stay of a vessel

by which they arrive and depart,

HOSPITALITY

INTRODUCTION

Hospitality in simple words can be said to be relationship between guest and

host. It involves reception of guests, visitors or even strangers and their

entertainment at resorts, hotels, membership clubs and sponsorship [events. It

also includes all services for travellers and tourists. And hospitality contributes

around 12% in the Mauritian economy.

In the western, hospitality means etiquettes and entertainment and it means

treating the guest as part of their culture, place etc. Hospitality sector is one of

the largest service sectors, providing services like food service, hotels, tourism

etc.

In hospitality sector one can see two types of worker, they are, white collar

workers and blue collar workers.

Hotels – classification

(India)

Star rated hotels

Heritage hotel

Budget hotels

Unclassified hotels (motels)


Resorts and clubs

Restaurants

(Mauritius)

Star rated hotels

Heritage hotel

Budget hotels

Unclassified hotels (motels)

Resorts and clubs

STRUCTURE

A hospitality industry can be divided into different categories:-

Hospitality Sector:-

Hostels

Motels

Hotels

Cafes

Nightclubs

Restaurants

Pubs(Public House)

Casinos

Theme Parks

Tourist and Travel services

Membership Clubs

Resorts

FUNCTIONS AND BUSINESS ACTIVITIES

Hotel Development: - the development is Mauritius is increasing day by

day with hotel groups like Hilton, Oberoi, Taj, Four Seasons etc. are

setting up their hotels here.


Health Tourism: - Health tourism is in demand as the country allows

old noncitizens to become citizens. And for the entire tourist the

country offers a large variety of ayurvedic centres, spas, multi-

speciality hospitals etc.

High class business resorts: - Mauritius is now one of the regional

business centres and so there has been set up many business hotels.

Eco – tourism projects: - Mauritius is gifted with a lot of natural

attractions and landscapes which attracts a tourist such as, forests,

mountains, valleys, rivers etc.

Gaming resorts: - As there have been many tourists visiting Mauritius

the introduction of gaming resorts have come up.

PRESENT RETALIONSHIP WITH INDIA

The government of both Mauritius and India, to improve their

relationship and cooperation, will be dealing with, mainly, economy,

commerce, investment and economic cooperation etc.

The government of Mauritius and the EXIM Bank of India have come

up with certain areas which will benefit the Indian investors, and they

are Manufacturing, financial services, tourism etc.

The Indian Mauritius trade relation has made certain future plans, they

are, encourage Indian investments in Mauritius etc.

And the common goal of both these countries is to encourage ethical

activities in trade and commerce.

It has been said that India is a biggest trading partner with Mauritius.

India has been the 2nd largest source of foreign assistance to

Mauritius.

COMPARITIVE POSITION OF HOSPITALITY INDUSTRY OF MAURITIUS WITH INDIA AND GUJARAT


Mauritius India

GDP contribution 12% 10.3% Hotel industry’s worth

US$ 20.08 billion.

US$ 17 billion

VAT 15% 12.5%

ROLE OF HOSPITALITY INDUSTRY IN THE ECONOMY OF MAURITIUS

Hospitality plays a great role in the development and economic growth of

Mauritius. In the past two decades the no. of tourist visiting this country has

increased a lot.

The tourist visitor no. has increased from 103,000 in 1977 to 656,450 in 2000.

BUSINESS OPPORTUNITIES (WHY MAURITIUS)

Competitive business environment: - Mauritius offers many advantages

like low tax regime, streamlined investment procedures and

competitive costs of doing business. Further stated, 15% VAT, Low

custom duties, 15% corporate tax applicable to hospitality and leisure

related activities, 100% foreign ownership, no inheritance tax etc.

Political stability: - Mauritius follows the British Westminster model, i.e.

elections are held in every 5 years.

A tradition of hospitality: – the Mauritian people are usually known for

the sense of hospitality treatment given to the visitors.

Global business: - many banks and international financial companies

and international management companies have set up their business

in this country.


Human resource: - the advantage is that the literacy rate in this country

is 86% and training related to hospitality sector is given through local

public and private institutions.

Open business platform: - the government of Mauritius has always

welcomed the foreign investment.

Investor protection: - there have been introduced many laws and

regulations for the protection of the investors, both local and foreign.

Sound legal environment: - the legal environment of Mauritius is very

sound.

Natural resources: - Mauritius has a variety of natural resources with a

large varied of flora and fauna, lagoon, mountains, beaches and much

more.

Infrastructure facilities :- there are major roads connecting all the major

highways, electricity is available all over the country through overhead

cable, piped potable water is available, airport and seaport are

equipped with modern infrastructure and excellent telecom facilities.

PROBLEMS AND PROSPECTS OF BUSINESS WITH MAURITIUS

Problems

Vulnerability to climatic conditions.

Higher oil prices resulting in increased airfare may dampen arrival of

tourists and thus hamper the growth of hospitality industry.

A further slowdown in European economies could hurt arrival of

tourists.

Prospects of Business

2011 was another difficult year for the local tourism sector. Hotel groups’

underwhelming performance can be attributed to:

1. Room rate discounting;

2. A weak Euro; and


3. Natural disasters.

Despite higher tourist arrivals which led to better occupancy rates, hotels

continued to struggle in 2010 AND 2011. Hotels have been offering cheaper

package deals as a means to attract more customers because not only are they

competing with an increasing number of hotels, but also with alternative forms of

stay like beach bungalows and IRS villas

Arrivals & Receipts

Our projections for 2011 place arrivals at about 943k (+3%) visitors excluding

transit passengers; and receipts at around Rs42.2bn (+7%)

Receipts and Earnings

The 2012 climate, ceteris paribus, should be no worse than 2010 simply because

most hotels are already operating at reduced room rates. Based on our

forecasted arrival levels – assuming hotel groups sustain their respective market

share levels – hotels should see improvements in occupancy rates, ergo

turnover. Nevertheless, room rates may continue to feel a downward pressure as

a consequence of the re-opening of several hotels in the up-market, and more

non-hotel accommodation becoming available. This situation of supply-demand

imbalance is not helped by the complicated air access problem. From just under

11k hotel rooms in 2008 to the present estimated 12.7k, the number of available

airline seats to Mauritius was at ~1.7M (in 2010) lower than 2008’s ~1.8M seats.

The monopolistic national airline’s fleet is too small to bring in the additional

guests required to boost hotel occupancy; while other airlines find it difficult to

increase flights towards Mauritius.

TRANSPORTATION

Mauritius is one of the most popular destinations for tourists from all over the

world; it enchants tourists and compels tourists to travel with its amazing beauty

and serenity. Tourists from round the world travel to Mauritius to spectacle its

beauty.


Since the days of its colonization, Mauritius has witnessed great development.

Road and airway facilities have been improved by the Mauritian government. The

roads have been improved and efforts have been made to make the country

friendlier to tourists as well as local inhabitants. Mauritius has no more railway

facilities. However there are various other modes of transportation in Mauritius.

Some of the common modes of transportation in Mauritius are as follows:

Roadways transportation

HISTORY

Year Buses Private

car

taxis Truck Motor

cycle

Total

1930 92 2041 300 303 220 3016

1950 186 - - - 5161

1970 722 12456 4171 5383 25389

2011 25497 180447 25499 160833 392276

As of June 2011, 392,276 vehicles are registered on the island. 180447 of this

fleet consist of cars and dual-purpose vehicles and 160833 motorized two-

wheelers. The remaining 50996 consists of vans, Lorries and trucks, buses and

other vehicles.

Road network

In Mauritius there are 2 066 km of roads from the total island of 1 865 km2,out of

which 48.5% are main roads, 28.7% are secondary roads, 3.6% are motorways

and the remaining 19.2% are made up of other types of roads. As on 2009, the

number of vehicles per km of road is 177. The bus network is quite extensive and

is organized around Port Louis. New air-conditioned buses have been introduced

from Port Louis with the main residential areas of the island.

Car & motorcycle


In Mauritius, Vehicles are drives on the left side of the street. Night driving is

hazardous as roads are sometimes narrow and uneven with inadequate lighting,

which is dangerous. Speed limits are posted in kilometers per hour, but all road

and traffic signs are posted in English.

In Mauritius car rental price are quite higher. In Mauritius all sorts and types of

cars available for rent, from cheap economy cars up to luxurious cars. The

average rental rate of a car of each day is between US$60 and US$110. The

driver at there should be at least 21 years old and be the holder of an

International Drivers License.

Taxis are quite expensive although there is an official tariff, which generally is not

respected - US$0.35 per km from 05:00 am - 20:00 pm and US$0.50 for night

tariff. If you are in quiry, you can ask for guidance at the reception in hotels.

Public transportation by bus is available between the main towns until 11:00 pm

and in remote areas until 6 pm.

Bus network

Mauritius has a widespread bus network in surrounding areas. There are about

220 bus lines and roughly 900 bus stops. They are operated by a number of

major companies and various individual operators which are organized in

regional Bus Owners Co-operative Societies (BOCS). The Government of

Mauritius regulates the bus prices.

Long-distance buses run from around 6am to 6.30pm. There is a late service

between Port Louis and Curepipe until 11pm. Generally there are buses every

fifteen minutes or soon the major routes, Buses are less frequent buses.

Especially on the main routes soon the express services. In country areas buses

can be few and far between, the buses are almost always packed, but turnover is

quick at all the stops.

Bicycle


Cycling is really a practical means of long-distance transport in Mauritius – there

is simply too much traffic – but bikes are fine for short hops along the coast.

Given that the coast is pleasantly flat, it’s amazing how much ground you can

cover in a day.

Rail transport

History

The history of rail transport in Mauritius began in the 1860s. The Mauritian rail

network was quickly built and it soon provided service to most of the island. It

was a key factor in the socio-economic development of Mauritius during its

period of operation. However, due to persistent unprofitability from 1948 to 1953,

it was finally closed in 1964.

Beginnings

In 1860s Mauritius was rapidly developed. It needed to modernize its

transportation system to progress further. As such, for the future development of

the island introduction of a railway network was essential. With Port-Louis as

hub, the railway network quickly developed and was soon covering most of the

island.

The first line opened at Mauritius in 1864; it was named as the North line. The

second line, started functioning in 1865, the Midlands line.

Closure

The railway network continued its operation, after World War II. As the railway’s

persistent faced deficit, the colonial authority decided to close the railways.

Ports and Harbours

Port Louis Harbour plays a vital role in the national economy as it handles about

99% of the total volume of external trade and contributes over 2% to the

country’s overall GDP. All major imports and exports transit through this port.


Over the past two decades, the port sector has undergone major structural

reforms and has been transformed into an economic nerve centre equipped with

substantial investments in modern port infrastructure and facilities offering world

class port services. These resulting in the emergence of dynamic port related

industries such as the seafood hub, cruise tourism, Freeport, logistics,

transshipment, together with an impressive waterfront development.

The vision of the Mauritius Ports Authority (MPA) is to develop Port Louis as a

regional maritime, logistics and business hub. The MPA has continued with the

completion of several projects and measures, to enhance our international

competitiveness and to ensure safety of navigation and smooth operations of

vessels at berth. The Authority has maintained its ambitious phase of expansion

and infrastructure development providing significant trade and economic benefits

to the port sector in particular, and the country at large. The MPA has, ensured

that all existing infrastructure are adequately maintained and are being optimally

used.

Due to such infrastructural development import and export have been increased.

Therefore to cope with the increasing calls of latest generation container vessels

and to enhance international competitiveness, the Authority is now proceeding

with a high-standard container berth extension of 240 meters to the existing MCT

berth.

The MPA strategic objective is to build a port that is well equipped, professionally

managed and constantly upgraded to maintain higher productivity and

performance at competitive rates. The authority has planned new projects

include:

Total: 8 ships (1,000 GRT or over) totaling 66,004 GRT/90,017 metric tons

deadweight

Ships by type: cargo 2, combination bulk 2, container 2 etc.

Air transport


History

The first recorded flight, with takeoff from Mauritius, was undertaken on the 2nd

June 1922 by Major F.W.Honnet. The plane, a mono-engine biplane, christened

Maurice, had come through boat.

After that in 1945, with the end of the war, the airport was opened to the civil

aviation. Air France became the first commercial aviation company to come to

Mauritius. Even if Mauritius was a British colony, the British Overseas Airways

Corporation (B.O.A.C) began to come to Mauritius only from 1962.

In June 1967, the national company, Air Mauritius was created. The Mauritian

government, British Airways, Air France and Air India were the initial

stakeholders in this initiative, with Rogers an active supporter. In December

1972, Air Mauritius landed a Piper-Navajo rented from Air Madagascar, in

Rodriguez.

The Sir Seewoosagur Ramgoolam International Airport (MRU) consists of an

international and domestic terminal featuring duty free shopping, banking and

currency exchange, restaurants and lounge.

Helicopter at Mauritius offers sightseeing tours, passenger transfer, photography

and filming flights services.

Airports

Total (Including main island and dependencies): 5 (2010)

International Airport (Mauritius Island): Sir Seewoosagur Ramgoolam

International Airport

Airports - with paved runways

Total: 2 (2010)

Over 3,047 m: 1 (Mauritius Island, Sir Seewoosagur Ramgoolam International

Airport)

914 to 1,523 m: 1 (Rodriguez Island, Sir gaetan duval Airport, Plain Corail)


Airports - with unpaved runways

Total: 3 (2010)

914 to 1,523 m: 2

Under 914 m: 1

DUTY FREE SHOPPING

INTRODUCTION

Shopping in Mauritius

Mauritius, tax free destination for shopping:

Mauritius is an Island in the Indian Ocean surrounded with a blue

turquoise lagoon and with sandy beaches. It is a touristic Island; and

its one of the main income for it.

As Mauritius is Island for tourist it gives visitors to make duty free

shopping in a large number of shops in the Island.

As many people from world visiting Mauritius, so shopping has gained

a lot of importance. And for promoting shopping in Mauritius, the

government has done its best to improve the market areas.

Few of the things that you must buy while on Mauritius shopping as

follows:

Textile: In Mauritius there is cashmere and woolen goods

are most famous. We can get cashmere items in the best

design at very reasonable rates.


Jewelry: As Jewelry is also an important item in shopping.

There are many duty free shops that sells cheap precious

and semi- precious jewelry pieces.

Model ships: Mauritius is an important island, as where sea

plays a very important role. Due to this there are several

craft shops in Mauritius that sells Model ships.

Mauritius Duty Free

As Mauritius duty free shops are all over the island, from that we can

buy articles from different brands at good prices and with no tax for

tourists.

The Government of Mauritius promised to abolish the 80% tax on the

1850 goods types including Jewelries, Electronics, Clothing and

fabrics.

The shopping without taxes made from this island a destination for the

luxury items at affordable prices. The goal of government was to bring

even more tourists to Mauritius and to build the reputation of the

world’s first duty-free island, a paradise for shopping also.

There are numerous Mauritius duty free all over the island offering

luxurious products and high quality products at prices of discounts.

The diversity of the products with no tax is big, such as electronics,

jewelry, perfumes and textiles.

The shopping centre hosts the craft market that offers essential oils

and Mauritian glass. It seems that the Mauritius duty free shops

objective is to create value for people’s money.

POLICES AND NORMS OF MAURITIUS FOR DUTY FREE SHOPPING:

Duty Free Shopping:

In Mauritius, the duty free shops where we can find all sorts of best

branded luxury goods at duty free prices.


There are many jewelry shops and consumer electronics appliances

which offer discounts.

The mode of payment for it is in foreign currencies or the Mauritian

rupee and they also need to show passport and return ticket while they

are purchasing.

Duty free shopping is very popular in Mauritius as it provide 40%

saving on textiles, jewelry, perfumes etc. and it also turned into a tax

free shopping in 2010, with 80% tax taken off around 2000 goods.

Polices And Norms Of Mauritius For Duty Free Shopping:

Duty Free Shops Classification

Mauritius Duty Free Shops are being categorized due to their mode of operations

as defined by customs act 1988 and customs regulations 1989 (amended by

finance act 2006) as follows:

Category A Any duty free shop that opts to operate under the deferred duty and

tax scheme at any other place than the seaport or airport will be

called downtown shop-category A This category of duty free shop

will be authorized to sell goods to mainly visitors and any other

persons.

Category B Any duty free shop that does not opt to operates under the deferred

duty and tax scheme at any other place than the seaport or airport

will be called downtown duty free shop-category B This category of

duty free shop will be authorized to sell goods exclusively to visitors.

Category C Any duty free shop that operates at the seaport or airport will be

called duty free shop-category C This category of duty free shop will

be authorized to sell goods to incoming and outgoing passengers

only.


Category D VAT free suppliers shop

Category E Any Ex ESZ companies authorize to sell to visitors only and a

corporate Tax at 15% (first financial year). The above companies

will fully integrate the deferred duty and tax scheme by 2007 as

category.

Conditions for operations of duty free shops:

When a person gets approval he/she has to start duty free shop within

3 months from the date of approval.

They are not allowed to stored duty & tax paid goods which offered for

sale in the duty free shop.

When good enter in a duty free shop it must be accompanied by the

appropriate warehousing import and export entries and received with

acknowledgement on the transfer form.

Goods which are not meant for sale but it used in duty free shop will be

subject to duties and taxes.

When visitors travelling by sea, purchased goods, the goods must be

sold free of duties and taxes and handed over to the visitor, under

customs control at the time of departure.

Payment for goods must be in currency acceptable to the bank of

Mauritius.

Operation of duty free shop will have to be computerized after due

notice given by customs.

BRANDING OF MAURITIUS

INTRODUCTION

Ritson (2010) states that countries are countries not brands, "I may have a

hammer, but it doesn't mean every problem is shaped like a nail". Ciegan (2010)


however, argues that although conceptualizing a country as a brand may not a

simple exercise, there is a need for countries to communicate their unique and

compelling stories, across sectors from tourism to investment, from their social

policies to their economic vision.

Some of the key benefits of a country brand strategy include:

•Aiding easy recognition and simplifying decision making for consumers.

•Strong positioning that clarifies what the place stands for and how it is different.

•A management and organizing framework to ensure consistency across all

communications and experiences throughout the critical points of contact with

customers.

•An “umbrella” that provides leverage and impact through a unified and

collaborative marketing approach for partners.

•Increased efficiency and effectiveness from the foreign direct investments.

Unveiling the new Logo and Tag line of Mauritius

The Country’s Branding exercise, which had taken 18 months by the firm

Acanchi, a consultancy firm which led the country branding exercise, was

officially launched on October 8th 2009 at the Citadelle, in the uphills of Port-

Louis. The logo, "Mauritius C’est un plaisir” is based on the mystical and timeless

mountain Pieter Both and incorporates the four colours that symbolize the

island’s harmonious diversity.

Criticisms of The Branding Exercise

(1) Narrowly focused slogan

(2) Fierce competition amongst neighbouring island destinations

(3) A more encompassing slogan

(4) Consistent message

(5) Raising awareness of local people so that they deliver the brand promise


Rebranding Of Mauritius

With such a attractive island like heaven to promote, you might

surprise why it’s taken 18 months and 31 million Mauritian rupees

(£617,998) to come up with the new saying: “Mauritius – It’s a

pleasure” or, the certified version in French, “Mauritius – C’est un

plaisir”. Will the saying help them beat the Maldives at the World Travel

award 2010?

The new Mauritian tagline is definitely short and simple, but like the

saying that it replaces – “Mauritius – memorable experience” – it is a

unremarkable phrase. It doesn’t have no matter which like the same

impact as the taglines “Brasil – sensational!” and “Incredible India”.

The Mauritian tourist board has replace its old strapline ('Mauritius –

memorable knowledge) with a new one: 'Mauritius – C'est un plaisir'.

The new branding, apparently planned to reflect the island's French

cultural control, has been greeted locally with "puzzlement and

scepticism", according to journalist Bhishmadev Seebaluck.

Mauritius Branding Guidelines

The logo is a handwritten autograph style.

The M traces classify the summarize of Pieter Both Mountain with its

rock developed at the top of its peak. Recognisable amongst all, the

Pieter Both Mountain is an icon in Mauritius (spirit of the place).

The looks like an iconic someone, arms widespread (spirit of the

people).

The light blue stroke illustrates the lagoon (spirit of the place).

How and when is the logo used?


This logo may be used by all accredited institutions, associations and

businesses. It may be used with or without the strapline, in French or in

English.

No institution, organisation or business is allowed to use this logo

without the authorisation from the Ministry of authorisation from the

Ministry of Tourism, Leisure and External Communication.

There are main two colour palette. In this colour palette, there are two

colours are used.

Primary Colour

Secondary Colour (The secondary colour palette may be used

when designing branded items.)

Logotype Specifications

The Mauritius logotype has been specially designed and cannot be created by

typesetting the wording.

The logotype may appear in a variety of sizes as specified in these guidelines. It

may be used with or without the strapline in French or in English.

The Elements of Brand Mauritius Brand Mauritius comprises five key components:

Proposition


What is the real benefit that Mauritius has to offer? This is a single idea that

reflects a longterm aspiration and encompasses the best of Mauritius today.

Positioning What makes Mauritius different and able to stand out from its competitors?

Values What are the beliefs and aspirations that are consistently demonstrated in the

behavior and attitude of Mauritians?

Personality What is the set of human personality characteristics that best captures the

people of Mauritius?

Supporting Messages What are the reasons why people should believe in the Mauritius country brand?

In the pages that follow, we present the Values and Personality first, then we

explain the Proposition and Positioning, followed by the Supporting Messages.

7 P’S of Tourism Sector of Mauritius (1) Product

The tourism product differs from other products due to the wide range it covers,

including such areas as accommodations, transportation, food, recreation and

attractions. Often the product includes intangibles such as history, culture and

natural beauty. Many times the hospitality or tourism product is viewed as more

of a “service” in the customer’s eyes.

(2) Price

This refers to the amount customers pay for the product or service provided. A

quality tourism experience at a fair price is what the customer is looking for in

most cases. Pricing should be based upon clear-cut goals and objectives:

survival, profit maximization, market share, competition or positioning.


(3) Place

The place where the customer buys the tourism product can vary greatly. Travel

agents, tour operators and tour wholesalers are a few examples of the

distribution points for tourism products.

(4) Promotion

A range of activities can be used to convince customers to buy the product,

including information kits, web sites, advertising, personal selling, sales

promotion, travel shows, and public relations.

(5) People The people who sell and service your product are an extremely important part of

tourism marketing. Friendly personal service and trained employees can make or

break a tourism business. Because much of the tourism industry is based upon

word of- mouth advertising particularly about the service received- what your

customers say after they depart can thrust your business forward or send it into a

downward spiral.

(6) Process

It is the means of undertaking transaction supply information and provided that

services on a way, which is tolerable to the consumer and the successful to the

organization.

Now to make this explanation of process true, it is essential for the institute which

provides services to be familiar with the important moments in the whole process

which make the service tolerable or not tolerable to the consumer depending on

the zone of tolerance and helpful or not helpful to the organization.


(7) PHYSICAL EVIDENCE

When the purchase of the product is pleasing place, however the consumer

cannot be certain whether they will get pleasure from the product or not. In the

suggest time their hope and emotion are inclined by factors like outline of the

room, the equipment, noise intensity, temperature, light and other factors like the

catalog of the company. In case of consumers who by automatically the

emergence of the website is the physical evidence.

The tangibles contain flat bed in industry class, Wi-Fi link in hotels, modified

meals on board, telechecking 8 hrs booking in hotels, hotels provided that

laptops on demand, internet access as praising for the commercial packages..

CONCLUSION

Tourism is vital for many countries, especially for many island nations, such as

Mauritius, due to the large intake of money for businesses with their goods and

services and the opportunity for employment in the service industries associated

with tourism. These service industries include transportation services, such as

airlines, cruise ships and taxicabs, hospitality services, such as accommodations,

including hotels and resorts, and entertainment venues, such as amusement

parks, casinos, shopping malls, music venues and theatres. Mauritian spirit,

enthusiasm and emotional connectedness to the tourist landscape wil be

apparent to both domestic and international tourists seeking to know the “ True

Mauritius”.

Road and airway facilities have been improved by the Mauritian government. The

roads have been improved and efforts have been made to make the country

friendlier to tourists as well as local inhabitants. Mauritius does not have railway

facilities. However there are various other modes of transportation in Mauritius.

Mauritius has a widespread bus network. The port sector has undergone major

structural reforms and has been transformed into an economic nerve centre

equipped with substantial investments in modern port infrastructure and facilities.


Due to the Influx of large number of tourists in Mauritius, shopping in Mauritius

has gained in importance. The market in Mauritius not only offer products by

International designers but also by local designers. It’s vision of government of

transforming Mauritius into high end shopping destination. One of the main

obstacles to the Duty Free Island policy is the proliferation of counterfeit products

across the Island. Here conclude that Mauritius turned into a tax free shopping

haven by 2010, with 80% tax taken off around 2000 goods for tourists who visit

Mauritius. So Government of Mauritius make Mauritius as a Duty Free Shopping

for tourists.

Mauritius is a fascinating, world-in-one-island slice of paradise. Tourists from

round the world travel to Mauritius to spectacle its beauty

SUGGESTIONS

In order to improve and promote tourism in Mauritius, I would like to give some

suggestions and they are as follows:

The main areas of concern were the improvement of the infrastructure,

environment protection, hotel services, transportation and communication. The

highlighted area is the need to improve road conditions and security. Sign posts

are required all over the island. Harsh and careless driving by the drivers should

not be encouraged but instead they should be imposed fine if doing so.

Pavements should be made so that roads are not crowded with pedestrians and

hence there will be less accidents. Airport services should be improved like

providing shopping facilities, good restaurants and clean toilets and adequate

taxis and cabs to pick up and drop the visitors to their respective hotels.

Visitors find shortage of disposal bins in public places like beaches and roads

and so adequate disposal bins should be placed in public place with strict rules to

dispose waste materials into dust bins. People and government of Mauritius

should limit modernization thereby preserving natural environment.


In hotels price of accommodation, drinks and food are generally charged too high

which should be reduced so that average class people can enjoy in Mauritius.

Hotel services should be improved so that visitors may feel at home and ease.

Beaches should be kept cleaner and investors should limit construction of hotels

in beaches. Most importantly visitors should be treated like god and they should

be safe and secure.


SUMMARY OF PART II

INFRASTRUCTURE SECTOR


Introduction

Mauritius’s infrastructure is quite developed where roads are maintained in a very good

condition & the road system is well enough to hold the country’s overall traffic volume.

Majority of the people in this country owns cars. However there are no railways in

Mauritius as it is an island. Public transport here generally takes place by bus which is

reliable & efficient. Currently Mauritius owns 5 airports from which 2 of them have

paved runways. There is a reasonable access to internet in Mauritius. Government is

taking various initiatives & undertaking various extension programmes for making its

infrastructure a developed one.

Business activities in the infrastructure sector

The business activities included in this sector are mainly regulated by a central authority

which is responsible for all matters relating to the particular activity. The main business

activities in the infrastructure sector are as follows:-

1. Telecommunication

2. Electricity

3. Water

4. Seaport

5. Airport

6. Trademarks

7. Public procurement.


AVIATION INDUSTRY


Introduction

Additional economic activity in the aviation sector is generated by the servicing,

management and maintenance of the additional air services. This includes activities at

airlines, airports, air navigation and other businesses that support the aviation sector. The

impact can “spin-off” into the wider economy (called indirect or multiplier impacts) –

e.g., food wholesalers that supply food for catering on flights, trucking companies that

move goods to and from the airport, refineries processing oil for jet fuel, etc.

Role of aviation in the economy of Mauritius

Passenger Traffic: - Sir Seewoosagur Ramgoolam

• International Airport is the primary commercial airport serving Mauritius handling all

international air traffic and half of all domestic traffic. The airport is located

approximately 43 kilometers southeast of Port Louis, the capital of Mauritius.

• In 2007, total annual air passenger traffic in Mauritius reached over 2.5 million, of

which over 2.4 million (98%) was international traffic (see Figure 3-1). Over the last

eight years, international passenger traffic has grown by an average of 6.4% per

annum. International traffic in 2007 grew by 16% relative to 2006.

Major Airlines: - Air Mauritius is the national airline of Mauritius, accounting for

76% of domestic capacity and 53% of international capacity in 2007, as shown in the

following figure. The major foreign air carriers serving Mauritius in 2007 were Air

Austral based in Reunion, Air France, Emirates, South African Airway and British

Airways.

Origin/Destination Markets: The following figure presents the major international

origin/destination (O/D) markets for Mauritius. Reunion in the Indian Ocean is the

largest O/D market, totaling 481,000 passengers in 2007 and making up 20% of all

international traffic. The second largest market is France (434,000 passengers) and

the United Kingdom is the third largest market (310,000 passengers). Other major


markets include South Africa, Germany, Italy, Madagascar, United Arab Emirates,

Switzerland and the Seychelles.

Comparative position of aviation sector of Mauritius with India

• Aviation in Gujarat.

The aviation activity in the Gujarat state was started in the year 1973 by a separate

division in G.A.I.C. In the beginning, this division was started with a purpose to help

the farmers by aerial spraying on various crops like; sugar cane, cotton, ground-nut,

tuvar, etc. by helicopter and fixed wing Aircrafts. By these activities, the farmers were

benefited in many ways. When there was shortage of rain, cloud seeding operation was

also carried out by aircraft for making artificial rain. The state has made G.A.I.C as its

nodal agency to carry out activities of Civil Aviation Department. This has been done

so as to meet demand of higher office in efficient manner. In year 2002 the state felt

that it was turn to have aviation as a separate department.

• Comparison of Indian aviation industry and Mauritius aviation industry

characteristic Indian aviation industry Mauritius aviation industry

No. Of airports

There are total 449 airports

through out the location of

India

There are a total of 5 airports in

Mauritius. 2 of the airports in Mauritius

are paved while the remaining 3 are

unpaved.

Government role

The government owned

Airports Authority of India

(AAI) operates 125 airports

and civil enclaves out of a

total of 449 airports

Airports of Mauritius Co. Ltd is the

owner and operator of Sir Seewoosagur

Ramgoolam International Airport. The

Government of Mauritius is the main

shareholder of AML.


Aircraft movement

The total number of aircraft

movements amounted to 1.31

million and freight handled

exceeded 2 million tons in

2010-11.

Dominance of air Mauritius in Mauritius

• Air Mauritius is the national carrier of Mauritius as illustrated in the following

figure Air

• Mauritius accounted for 53% of international carrier.

• Air Mauritius desires to increase the travel from corporate to increase by 90% by

the end of 2013 as a fruitful result of vast efforts undertaken by them. They

transported 1500 travelers from the corporate from the period of april 2010 to

march 2011 & futher expects that this will increase to round about 39% by march-

2012.

• Comparison of fares of Air India, Air Mauritius and other service provider

1. Fare details of one way flight from Mumbai to Mauritius:

Departs Fare

Mon 07 Rs.22,452 Air India

Tue 08 Rs.34,386 South African Airways

Wed 09 Rs.22,452 Air India

Thu 10 Rs.28,598 Emirates Airlines

Fri 11 Rs.21,665 Air India

Sat 12 Rs.21,665 Air India


Interpretation: The Fare details of

one way flight from Mumbai to Mauritius is given in the table and from the table we can

clearly say that air India is offering the best price to the passenger for one way flight from

Mumbai to Mauritius.

2. Fare details of round trip from Mauritius to Mumbai:

Lowest

Fares

Air

Mauritius

Air India Emirates

Airlines

South African

Airways

Air

France

Nonstop Rs.41,579 Rs.41,579 Rs.47,237 ----- ----- -----

Interpretation: The above table shows the Fare details of round trip from Mauritius to

Mumbai and it clearly shows that air Mauritius is offering lowest fair to the passenger for

round trip from Mauritius to India.

Sun 13 Rs.37,695 Emirates Airlines

DEPARTS


3. Fare details of round trip from Mumbai to Mauritius:

Interpretation: The table given above shows Fare details of round trip from Mumbai to

Mauritius and from the table we can say that Air Mauritius is providing cheapest fair to

passenger for round trip from India to Mauritius. Air India is giving tough competition to

air Mauritius but it’s not as low-priced as air Mauritius while emirates air is some how

out of picture because its fares are too high for the passenger.

4. Fare details of one way flights from Mauritius to Mumbai:

Interpretation: The Fare details of one way flights from Mauritius to Mumbai are given

in the table and from the data we can say that for non stop flight air India’s offer is the

lowest to the passengers.

Improvement of services:

7 8 9 10 11 12 13

15 39036 ( AM) 56495(EI) 45511(AI) 49505(EI) 44724(AI) 44724(AI) 56495(EI)

16 49505(EI) 56495(EI) 56495(EI) 49505(EI) 56495(EI) 56495(EI) 56495(EI)

17 39036 ( AM) 56495(EI) 45511(AI) 49505(EI) 44724(AI) 44724(AI) 56495(EI)

18 34257(AM) 56495(EI) 45511(AI) 49505(EI) 44724(AI) 44724(AI) 56495(EI)

19 49505(EI) 56495(EI) 56495(EI) 49505(EI) 56495(EI) 56495(EI) 56495(EI)

20 39036 ( AM) 59303(AI) 45511(AI) 62317(EI) 44724(AI) 44724(AI) 67760(AI)

R

E

T

U

R

N

21 49505(EI) 56495(EI) 56495(EI) 49505(EI) 56495(EI) 56495(EI) 56495(EI)

lowest fare Air India Air

Mauritius

Emirates

Airlines

South African

Airways

Kenya

Airways

Air

France

Nonstop Rs.32,362 Rs.32,362 Rs.33,733 ----- ----- ----- -----


• Air Mauritius plans to strengthen certain destinations in its network. to its strongest

markets, regional routes, & emerging trade routes.

• Air Mauritius’s services will increase from weekly to twice weekly with effect

from June 2012.

Present position of air Mauritius with that of India Along with its improved services to other nations Air Mauritius is on a path towards launching an extra weekly frequency especially on its Mumbai route in March-2012, which presently serves three times weekly. Even Trade relations between Mauritius and India have been satisfactory over the past few years, due to which India ranks as Mauritius’s 2nd largest import & trade partner. India is undoubtedly Mauritius’s fastest growing trade partner which signals a good sign for both the countries. More services in order to strengthen the trade relationship • As a result of major initiatives Air Mauritius plans to reinforce major trade partners

of Mauritius which includes India, China, South Africa and Australia. • The country’s traditional export partners are Spain, France, UK, US, Madagascar,

Italy and South Africa. • Import partners include India, China and Japan as major partners. • Mauritius’s import commodities include manufactured goods, capital equipment,

foodstuffs, petroleum products, chemicals etc. Import and export:


Interpretation: - India is holding second position as the major import & trade partner of Mauritius & eighth position as the major export partner this shows that India needs to make reasonable efforts in order to increase its export position with Mauritius.

New opportunities of business with Mauritius:

• Air India has good opportunity to give good fight to air Mauritius with reducing its fair in round trip. By this way it can attract more Indian tourist and can increase its market share. Though air emirates are giving tough fight but air India is in better position than air Mauritius.

• Air Mauritius is also now to seek a serious partnership and then restructure Air Mauritius to concentrate on core routes which perform well and otherwise seek code shares from which it can also profit so investors who are thinking of investing in Mauritius have great opportunity.

• Air Mauritius has with immediate effect raised their fares by 5 percent across the board for international flights, to cater for the rise in fuel and other cost and this price increase also provide good opportunity to Indian aviation for increasing market share.

Findings: Mauritius is popularly known as good tourist place in the world. From

February 2011 to January 2012 961592 tourists had visited Mauritius. Currently,

the share of Indian tourists visiting Mauritius is six to seven per cent and this

number will increase to 11-12 per cent within the next five years. Here for Indian

airways has grate opportunity to attract those tourists. Mauritius aviation sector is

good investment destination for India if Mauritius government removes some

policy restriction in India. Air India has also good chance to give competition to

air Mauritius in tourism sector.


Telecommunication sector


Introduction: The ministry of telecommunication sector at Mauritius is responsible

for the information technology and administering the telecommunication programs.

The information and communication technologies authority (ICTA) is the regulator

for the telecommunication sector of Mauritius.

Subsidiaries of Mauritius Telecom include:

• Telecom Plus Ltd, an internet service provider;

• Cellplus Mobile Communications Ltd, a cellular phone service provider;

• Call Services Ltd, a telemarketing company;

• Teleservices (Mauritius) Ltd, a telephone directory company.

Community Involvement of Mauritius telecommunication

• Mauritius telecom firmly believes to provide a better quality of life to the whole

community.

• The companies of telecommunication at Mauritius have adopted the policy of

corporate social commitment and play the role in promotion, education, artist, etc.

Comparative position of telecommunication sector of Mauritius with India/

Gujarat.

• The agreement was signed for the join survey between the ONGC for the

exclusive Economic Zone of Mauritius.

• This agreement was being signed by Dr. APJ Abdul Kalam to the Mauritius.

Comparative position of Mauritius with India

1) Estimated market penetration rates in Mauritius’s telecoms sector –

end 2011 :

Market Penetration rate

Mobile 98%

Fixed 30%

Internet 29%


2) Comparison between Mauritius and India

• Location:

India – southern Asia bordering the Arabian Sea, and the Bay of Bengal.

Mauritius – southern Africa Island in the Indian Ocean.

• Coastal line: India – 7000 km., Mauritius – 177 km

Business opportunities in Mauritius

Forthcoming licenses

• Government has allowed for the internet service providers to end up the

monopoly at Mauritius.

• The parliament of Mauritius has also adopted the law to reform the postal and

telecom sector.

• The parliament has also created the telecommunication authority at Mauritius for

privatization.

Suggestions

• Mauritius government should increase its coastal lines for better development of

communication sector.

• Government should remove the restriction for the further development of this

sector.

• Telecommunication sector may help to improve the competitive position of the

Mauritius country.

• Mauritius should include more number of subsidiaries.

• Opportunities should be increased towards the expansion of the business with

African base technology.

Conclusion:

Telecommunication sector at Mauritius is responsible for the information technology

and administering the telecommunication programs. The companies of

telecommunication at Mauritius have adopted the policy of corporate social


commitment and play the role in promotion, education, artist, etc. the sector has been

growing rapidly for last few year and there is more opportunities toward

development. Mauritius government should increase its coastal lines and remove the

restrictions for better development of communication sector.

Health Care


Introduction Over the past two years, this Government has made a bold start in achieving

better health and in promoting better health services. Financial allocations

have been increased, new projects developed and new services introduced.

New buildings have been put up and old ones renovated. Modern equipment

including high-tech equipment has been acquired. More specialized

professional and technical staff has been recruited. There has been

substantial improvement, but much more remains to be done. Indeed, a

completely new strategy is required to improve our health system, to cater for

people’s rising expectations and needs, and to keep pace with advancing

medical technology.

This Project on Health Sector Development and Reform is a document for national

consultation and it:

• provides an overview of the current state of the health sector

• presents for public consultation key proposals from the Action Plan

• includes options for funding that plan


Government promoting its policies for overseas pharmacy companies in

different countries: The government has implemented many forms to open up the

economy and attract significant FDI in variety of sectors which also includes the life

sciences industry and health care. . The BOI is regularly promoting and organizing

various overseas events in Mauritius to attract foreign investors in pharmacy and life

sciences to the country.

Concessions offered to overseas pharmacy investors

• In addition to providing a fair and equal treatment to both local and foreign

investors, instead of merely offering fiscal incentives, significant efforts have

been made to improve the investment and business climate in Mauritius.

• The focus is more on investment rather than offering fiscal incentives.

Considerable efforts have been made so far in terms of streamlining permits and

reducing administrative bottlenecks. The focus is more on investment rather than

offering fiscal incentives. Considerable efforts have been made so far in terms of

streamlining permits and reducing administrative bottlenecks.

Comparative Position of Health Sector Product with India and Gujarat

In the list of top pharmaceutical companies in India it is not the Indian companies but

also the MNCs that are becoming the part of the race. Indian pharmaceutical market

in 2008 was $7,743m and if compared to year 2007 it was 4% more than that.

Looking back into history reveals that it was in 1930 when the first pharmaceutical

company in India came into existence in Kolkata. It is called the "Bengal Chemicals

and Pharmaceutical Works". This Indian company is still there and today it is the part

of five drug manufacturing companies that are owned by the government. Number At

present there is a cut throat competition among top pharmaceutical companies in

India with the native as well as MNCs. But there are certain issues that are concerning

the growth of pharmacy companies in India. These are:

• Mandatory licensing and failure of new patent system.

• Regular power cuts and inadequate infrastructure.


• Restricted funding.

• Regulatory hindrances that lead to the delays in the launch of new drug or

pharmacy product.

• Too many small as well as big pharmaceutical companies and excessive

competition.

Top 10 Pharmaceutical Companies in India which Deals with Mauritius

Ranbaxy, Dr Reddy's Laboratories, Cipla, Sun Pharma Industries, Lupin Labs,

Aurobindo Pharma, GlaxoSmithKline Pharma (GSK), Cadila Healthcare, Aventis

Pharmacy, IpcaLaboratories.

Present Position and Trend with India / Gujarat during last 3 to 5 years • India has remained one of its biggest trading partners; in addition India has deep

social and historical links with a large portion of the population of Mauritius,

India is the country's second largest source of foreign assistance.

• Trade, commitment to democracy and the country's small size are driving forces

behind Mauritian foreign policy. The country's political heritage and dependence

on Western markets have led to close ties with the European Union and its

member states, particularly the United Kingdom and France, which exercises

sovereignty over neighboring Reunion Island.

• The panel comprising Rama Krishna Sithanen, vice prime minister and minister

of finance and economic development, Mauritius, Bhriguraj Singh, senior vice-

president, trade and supply chain, HSBC India, CouldipBasantaLala, founder

director, International Financial Services Limited, NainaLalKidwai, group general

manager and country head of the HSBC group of companies in India, N Shridhar,

CFO, Future Capital Holdings Ltd, Russell Parera, chief executive officer, KPMG

India and SandeepUppal, chief executive officer, HSBC Mauritius put forth their

views on the synergies between India and Mauritius that can be leveraged to

derive mutual benefits.

THE DOUBLE TAXATION AGREEMENTS

Double Taxation conventions have been signed with the following countries and are

now operational: South Africa, Germany, France, United Kingdom, India, Malaysia,


Zimbabwe, Swaziland and Sweden. An agreement with Italy has already been signed

and is awaiting ratification. Double taxation agreements are presently being

negotiated with China, Pakistan, Belgium and Luxembourg. Each convention

contains either a full or partial tax sparing clause.

Trade is liberalized in Mauritius and non-tariff barriers are limited. There are only a

few controlled goods which require a permit to enter Mauritius.

Policies and Norms of India for Import or export to the Mauritius including licensing / permission, taxation etc

The India Mauritius trade relations are a common forum of India and Mauritius

Chamber of Commerce and Industry. The Federation of Indian Chambers and

Commerce (FICCI) and TheMauritius Chamber of Commerce and Industry represent

the trade and business community of their respective countries.

• India Mauritius Trade Relations – the policies adopted by India

Removing government controls and creating an atmosphere of trust and

transparency to promote industrialization and trades. Simplification of

commercial and legal procedures and bringing down transaction costs.

Simplification of levies and duties on inputs used in export products.

Modernization of infrastructural network, both physical and virtual, related to the

entire Foreign Trade chain, to global standards. Revitalizing the Board of

Trade by redefining its role. Involving Indian Embassies as an important member

of export strategy and linking all commercial houses at international locations

through an electronic platform for real time trade, intelligence, inquiry and

information dissemination

• India Mauritius Trade Relations – the policies adopted by Mauritius

• Investment guarantees to promote joint ventures

• Identify items of trade and investment

• Boost bilateral trade

• Arrest illegal trade between the two countries

Present Trade barriers for import / Export of selected good


• India and Mauritius entered into a double taxation avoidance agreement (Mauritius

Treaty) in April 1, 1983 with the objective of avoidance of double taxation and the

prevention of fiscal evasion. The allegations by Indian authorities against the

Mauritius Treaty have historically been, and continue to be, primarily on two

counts:

• offshore investors setting up “conduits” in Mauritius solely to avail of Mauritius

Treaty benefits without having any actual commercial purpose for setting up such

entities; and

• Politically more sensitive – Indian residents using Mauritius for "round tripping"

funds back into India, tax avoidance and money laundering. Amidst these

allegations, the following are key developments over the past two decades in

relation to the Mauritius Treaty:

Potential for import / export in India / Gujarat Market

Ajanta Pharmacy has set up a pharmacy manufacturing unit in Mauritius in 2010.

Mauritius has been involved in the manufacturing the wide range of medicines like

antibiotics, anti-malarial, antipyretics, so on whichhave been exported globally.

Parenteral Drugs from India has recently partnered with one of the Mauritian

company i.e Mascaregines Pharmaceutical Manufacturing which is to set up a state of

art for health manufacturing unit with investment of $ 15 million. The company will

manufacture a comprehensive range of pharmacy products in Mauritius ranging from

antibiotics to serum. The project is presently under implementation and is expected to

be operational in the third half of 2012.

Business Opportunities in future

The forum of India Mauritius trade relations has suggested future plans to:


• Encourage Indian investments in Mauritius and joint India-Mauritius

investments into the region.

• To Increase Indian investment and to transfer the technology and know-how and

which would be there are several processes of economic development in the

several area.

Conclusions and Suggestions

There are high rate of heart disease seen in many countries like Asian Indians, African-origin Creoles, and Chinese in Mauritius which is rapidly developing country that may point to many future problems in Mauritius. Many of the deaths are related to heart diseases. The HIV/AIDS rate was 0.10 per 100 adults in 2010. As of 2010, there were approximately more than 700 people living with HIV/AIDS in the country and there were an estimated 100 deaths from AIDS in 2010.


Solid waste management and Power sector

Introduction

The increased affluence of the Mauritian society over the last decades has meant that

greater quantities of waste are generated per year. In 1997, the first and only landfill


became operational at mare Chicose which is now being filled to capacity. With little

recycling and little composting of waste carried out presently, it is clear that waste

facilities have not kept up and now becoming inadequate to cope with the load.

Structure

• Waste Management:

• Disposal of condemned goods and hazardous wastes:

• Radioactive waste:

• Waste water management:

• Landfill:

• Recycling:

New opportunity of solid waste management

Solid waste in Mauritius: The increased in the economic development has changed

the life style and the consumption pattern of the popular. Consequently, this has led to

an increase of the amount of solid waste generated. There were 372,434 tones of solid

waste land filled at the only sanitary (clean) landfill of the country in 2003.

What can be done?

i. Practicing the 3 R’s reduce, reuse and recycle by :

Participating in recycling programs and buying products made from recycled

materials.

ii. Enhancing composting

Composting is easy and cheap; you can cut down your household rubbish by

hundreds of kilograms each year, and create a mixture that can be used to

improve the soil.

Problem and Prospects


1. Air Problem: Electricity generation, Industrial actives, Transportation and

vehicular emissions, Sugar cane burning, Medical waste Incineration,

Environment Protection Regulation, Air Quality Monitoring, Greenhouse Gas

Emissions, Ozone Depleting Substances, persistent organic pollutants, state and

trends of Air Quality, Impacts

Prospects: Policy Options for the future

2. Freshwater Problem: population Growth, water demand, Pressure on water

resources, water stress and water scarcity, surface and ground water Quality

Prospects: Policy options for the future

3. Land Problem : Increasing demand for land, Agricultural production,

Development along the coastline, traffic congestion, development on wetlands


4. Solid waste management Problem : Population growth, Economic development,

Production and consumption patterns, Trends in Land filling of waste, Waste

compositions, Recycling, Inadequate legal and policy framework for waste

management, Public expenditure on waste management, social problems at the

landfill.

Prospects: policy option for the future

5. Energy Problem: A fossil fuel incentive economy, rising electricity Demand,

Electricity generation, Transport sector.

Prospects: policy option for the future

6. Climate Change :Problems :Greenhouse gas emissions, trends in climate

change, Impacts of climate change, effectiveness of policies and strategies


Potential for import / export in India /Gujarat Market

• Solid wastes generation and their environmental importance

Growth of population, increasing urbanization, rising standards of living due to

technological innovation have contributed to an increase both in the quantity and

variety of solid waste generated by industrial, mining, domestic and agricultural

activities.

• organic solid waste generation, recycling and utilization


Solid waste generation from organic sources include municipal and urban wastes,

animal wastes, framing wastes, horticulture wastes, domestic refuses and other

agro industrial wastes.

• inorganic solid wastes generation, recycling and utilization

Inorganic solid wastes are of both non-hazardous and hazardous in nature.

Inorganic non-hazardous solid wastes are primarily from mining sector and these

wastes are the primary process rejects which constitute overburden wastes.

• Solid waste generation from mining operations and their utilization

Mining operations are the primary activity in an industrial process and major

sources of pollutants include overburden waste disposal, tailings, dump leaches,

mine water discharge and other process wastes disposal near by the industries.

• Construction waste, marble processing waste and their recycling Potentials

Solid waste are generated annually from construction industries, which include

wasted sand, stone, bricks and clear masonry, concrete

Solid waste minimization and safe management options

The optimal solution for solid waste management is to minimize the quantity of

waste at generation and disposal stage followed by preventive environmental

management action.

• Saving energy, economy and social benefits.

Pollution abatement, saving energy and social benefit are the primary indicates to

measure the advantages in sustainable solid waste management (SSWM) system.

CONCLUSION

• Recycling encompasses resource conservation and environmental preservation

though it is not used on a large scale in Mauritius.

• Disposal of Solid wastes represent a loss of resources. Plastic, paper, metals and

other recyclables have an economic value.

• Basically Mauritius trying hard to control solid waste in the country.

• Solid waste create problem living in the country from the recent data in Mauritius

the complaints against solid waste management increasing but the data sources

that due to efforts if Mauritius government these complaints are decreasing.


• Disposal of Solid wastes represent a loss of resources. Plastic, paper, metals and

other recyclables have an economic value.

• Introduction: The power sector in Mauritius has undergone rigorous change

throughout the previous few years. The country has encouraged from a state of

about whole reliance on petroleum goods for electricity making to a new situation

whereby most of the electricity is generate from petroleum and biogases. The

sweetie trade has invested vast amount to produce more electricity from biogases

throughout crop season and from fuel during off-season. This expansion has been

welcomed by the government’s Bagasse Energy Development Program (BEDP).

There are three power stations situated around the capital city of Port Louis, of which

61.7% of electrical power making is reliant upon diesel-powered engines. The power

stations have a total efficient capability of 176 megawatts

Comparative Position of power sector:

India: India's power market is the fifth largest in the world. The power division is

high on India's priority as it offers wonderful probable for investing companies based

on the sheer size of the market and the profits available on investment capital. Almost

55 per cent of this capability is based on petroleum, about 10 per cent on gas, 26 per

cent on hydro, about 5 per cent on renewable sources, about 3 per cent on nuclear and

1 per cent on diesel.

In the past five years, there has been a much better importance on conduction

and allocation reforms

In the past few years, there has been large expansion in power plants based on

renewable source of energy. The Plant Load Factor (PLF) of generate plants has

enhanced constantly over the last 10 years. The share of thermal power as a

percentage of total power generated has decreased from 71 per cent to 66.3 per cent in

the last decade. The share of hydro has increased to 26 per cent from 25.7 per cent.

GUJARAT: The Responsibility to expand the power part is not only of the private

entrepreneurs but the Government is not in the situation to create more savings for

growth of power sector due to limited resources. Apart from that shortfall of

electricity has not been satisfied due to other reason as well as the quick industrial


development. Hence the Govt. is making hard work to attract more investment from

private enterprise in the power sector.

Business Opportunities in future :

• By 2030, CCS could be a typical part of petroleum and gas power plants. The

present EU legislation, for example, by now prescribe that all new power

plants are built CCS-ready after 2020 and soon after that all obtainable power

plants will be CCS-retrofitted.

• There is also other physically powerful indication that there will be a

potential marked for CCS. In 2007 Mauritius endorsed a regulation for base

load power creation that includes an Emission Performance Standard (EPS)

of 500 grams per kWh. This prohibits structure of traditional petroleum

power plants without CCS because they would give off more than the EPS

limit.

Trade barrier

• Most trade barriers work on the same principle: the annoyance of some kind of

cost on trade that raises the price of the trade products.

• Trade barriers such as duty on power imports or subsidies for company in

developed economies lead to overproduction and removal on world markets, thus

lower prices and hurt poor-country industries. Tariff also tends to be anti-poor,

with low down rates for raw commodities and high rates for physical processed

goods.

• Some non-tariff trade barriers are specifically acceptable in very restricted

conditions, when they are deem essential to protect health, safety, or hygiene, or

to protect delicious natural resources. Some of non-tariff barrier are not straight

related to foreign economic rules, but on the other hand they have an important

shock on foreign-economic activity and foreign trade between countries.

SUGGESTION

As we know from data that India and Mauritius both have chance for business in

opponent nation. By the recent news in India that they make changes in import export

duty. Both countries have latest technology for creation and allocation and sharing of


electricity in own nation through various station. We should share energy to vast area

of a nation so it should be at lowest cost to industry, companies and household usage.

Conclusion: : The power sector of Mauritius has drastic changes in throughout the

last few years. Mauritius creates energy through solar, wind, coal, hydro, biogases,

kerosene and fuel oil. These are the renewable and non-renewable foundation of

energy. India has potential in renewable source of creation of energy. In Gujarat there

are various private entrepreneurs for energy sector, so they can share easily in

boundary of Gujarat. Mauritius has opportunity for importing for gas and petroleum

plants in various countries.

Webography

• http://www.mcci.org/business_infrastructure_public.aspx

• http://www.oifc.in/Sectors/Infrastructure/Aviation

• http://www.airmauritius.com/conditionsofcarriage.htm

• http://www.icra.in/Files/ticker/Indian%20Aviation%20Industry%20(NEW).pdf

• http://www.airmauritius.com

• http://www.civilaviation.in

• http://www.mauport.com/

gcsr on - gujarat technological university - mauritius.pdfgcsr on mauritius country as partial...

Documents