FT Special Report - Mauritius: World Financial Centre

Mauritius strives to shake off ‘tax haven’ tag

Country’s business appeal is based on more than trade treaties

Mauritius rides wave of Asian investment in Africa

Country positions itself as a base for services to China’s richest individuals

Mauritius caught in middle-income trap

Economy struggles with outdated infrastructure and low productivity

Tax change threatens close ties between India and Mauritius

Revised treaty aims to restrict avoidance schemes

Mauritius’s finance chief knows the risks of failing to diversify

Pravind Jugnauth is the man most likely to take over as prime minister

Mauritius offers tax breaks to attract Bollywood movie industry

Government hopes foreign film producers can market scenic island abroad

Realities of being an expat in Mauritius

Lack of suitable housing and prohibitive bureaucracy — it is not all sun and golf

Business traveller’s guide for a long weekend in Mauritius

A guide to some of the country’s top attractions and places to unwind

WEF: Declining Openness a Major Threat to Global Competitiveness

A ten-year decline in the openness of economies at all stages of development poses a risk to countries’ ability to grow and innovate, according to The Global Competitiveness Report 2016-2017, which is published today.

The report is an annual assessment of the factors driving productivity and prosperity in 138 countries. The degree to which economies are open to international trade in goods and services is directly linked to both economic growth and a nation’s innovative potential. The trend, which is based on perception data from the Global Competitiveness Index (GCI)’s Executive Opinion Survey, is gradual and attributed mainly to a rise in non-tariff barriers although three other factors are also taken into account; burdensome customs procedures; rules affecting FDI and foreign ownership. It is most keenly felt in the high and upper middle income economies.

“Declining openness in the global economy is harming competitiveness and making it harder for leaders to drive sustainable, inclusive growth,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

The report also sheds light on why quantitative easing and other monetary policy measures have been insufficient in reigniting long-term growth for the world’s advanced economies. The report finds that interventions by economies with comparatively low GCI scores failed to generate the same effect as those performed in economies with high scores, suggesting that strong underlying competitiveness is a key requirement for successful monetary stimulus.

The report offers insight into how priorities may be shifting for nations in earlier stages of development. While basic drivers of competitiveness such as infrastructure, health, education and well-functioning markets will always be important, data in the GCI suggests that a nation’s performance in terms of technological readiness, business sophistication and innovation is now as important in driving competitiveness and growth.

The Global Competitiveness Index in 2016

For the eighth consecutive year, Switzerland ranks as the most competitive economy in the world, narrowly ahead of Singapore and the United States. Following them is Netherlands and then Germany. The latter has climbed four places in two years. The next two countries, Sweden (6) and the United Kingdom (7) both advance three places, with the latter’s GCI score being based on pre-Brexit data. The remaining three economies in the top ten; Japan (8), Hong Kong SAR (9) and Finland (10) all move backwards.

While European economies continue to dominate the top ten, there remains no end in sight for the region’s persisting north-south divide. Spain improves by one point climbing to 32, however Italy drops back one place to 44 and Greece reverses 5 places to 86. France, the Eurozone’s second largest economy, climbs one place to 21. For all economies in Europe, maintaining and improving prosperity levels will depend heavily on their ability to harness innovation and the talents of their workforces.

There is some sign of convergence in the competitiveness of the world’s largest emerging markets. China, on 28, remains top among the BRICS grouping although another surge by India – which climbs 16 places to 39 – means there is now less of a gap between it and its peers. With both Russia and South Africa moving up two places to 43 and 47 respectively only Brazil is declining, falling six places to 81.

The competitiveness gap in East Asia and Pacific, meanwhile, is widening. Although 13 of the 15 economies covered consecutively since 2007 have been able to improve their GCI score over the past decade, this year sees reversals for some of the larger emerging markets in the region: Malaysia drops out of the top twenty, falling seven places to 25; Thailand drops two to 34; Indonesia falls 4 places to 41 while the Philippines drops ten to 57. A consistent theme for all the region’s developing countries is the need to make inroads into the more complex areas of competitiveness related to business sophistication and innovation if they are to break out of the middle-income trap.

The drop in energy prices has heightened the urgency of advancing competitiveness agendas across the Arab world. With three economies in the top thirty; the United Arab Emirates (16); Qatar (18); and Saudi Arabia (29) there remains a clear need for all energy-exporting nations to further diversify their economies and for much greater effort to improve basic competitiveness among the region’s energy-importing nations.

Two countries in Latin America and the Caribbean make it into this year’s top 50. Chile, the outlier in the region on 33, climbs two places although the gap is closing with the second highest ranked economy, Panama (up 8 places to 42). Next comes Mexico which performs strongly with a 6-point climb to 51. Argentina and Colombia, the third and fourth largest economies in the region, rank 104 and 61 respectively.

One of the most improved nations in sub-Saharan Africa is Rwanda, which rises 6 places to 52. It is closing in on the region’s traditionally most competitive economies, Mauritius and South Africa, although both these countries register more modest improvements, climbing to 45 and 47 respectively. Lower down the ranking, Kenya climbs to 96, Ethiopia holds steady at 109 while Nigeria slips three to 127.

“To me, the interest in economic growth comes from the fact that it is potentially so important for improving human welfare. The Global Competitiveness Report helps us understand the drivers of growth and this edition comes at a time of stalling productivity, the main determinant of future growth,” said Xavier Sala-i-Martin, Professor of Economics at Columbia University.

Maurice, porte d’entrée de choix pour investir en Afrique

Le cabinet d’avocats Eversheds Paris LLP, en collaboration avec le CIAN (Conseil Français des Investisseurs en Afrique) et le Board of Investment of Mauritius, organise un petit-déjeuner sur les atouts de l’économie mauricienne pour investir en Afrique. A l’occasion de ce déjeuner seront évoqués notamment:

• L’environnement juridique, fiscal, politique et réglementaire de l’Ile
• Les avantages de la plateforme mauricienne pour investir en Afrique
• Les étapes concrètes d’un investissement via deux études de cas

Petit-déjeuner dans les locaux d’Eversheds, 8 place d’Iéna, 75016 Paris. Deux entreprises implantées à Maurice apporteront leur témoignage. 

Thème de la conférence : Maurice, plateforme financière pour se développer en Afrique

A new web based solution meets multiple regulatory requirements for KYC

The ID Register is a new online platform which makes the Know Your Client (KYC) process quicker, easier and more cost effective.

The ID Register lets users create a complete KYC profile and share it securely with those who need it, eliminating the need for multiple paper forms that all ask for similar information in slightly different ways

Backed by leading fund administrator, Ipes, The ID Register has been developed in response to the changing regulatory requirements for KYC. The UK Financial Conduct Authority (FCA) has stated, "In order to enable effective competition and promote innovation, it is important that technologies that help firms better manage regulatory requirements and reduce compliance costs are supported."

The Guernsey and Jersey Financial Services Commissions have recently updated their guidance to encourage firms to improve the cost effectiveness of Client Due Diligence (CDD) through the adoption of technology. The GFSC "hopes that these changes [to the Handbook] will give firms the confidence to use new technologies."

Tim Andrews, Director, Ipes says "Financial organisations currently face a number of common problems around customer due diligence. It is currently a manual, paper based process, there is often poor visibility of what evidence is held and where there are gaps. Sharing sensitive documents by email is not secure and requesting the same information time and time again from the same people creates hassle and annoyance."

"The ID Register solves these problems, as well as ensuring compliance with differing regulatory requirements in different jurisdictions. Digital KYC is the future."

Each KYC profile on The ID Register can also be used to ensure compliance with the US Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) legislation. This eliminates the need for further FATCA self-certifications and drives efficient reporting straight from The ID Register data.

KPMG in the Channel Islands has been working with The ID Register to ensure that each profile remains compliant with evolving legislation. Tony Mancini, Tax Partner, KPMG says, "The ID Register is able to combine data with multi-jurisdictional reporting functionality for FATCA and CRS, delivering an efficient, cost effective package that will report the right information, at the right time, to the right jurisdictions."

The ID Register users include leading European fund managers Stepstone, Gilde and TDR Capital.

Stepstone Partner Jason Ment says, "The ID Register is nothing short of a revolution for the investor on boarding process in the private funds market. The investor on boarding process has become more complicated and protracted in response to regulatory change. This frustrates investors and sponsors alike."

"The ID Register is a straightforward solution that seems obvious the moment you hear it - the investor completes a profile covering everything one time, and one time only. The profile is kept up to date. The investor shares the profile with each investee fund. No repetition. No wasted time."

Z/Yen: Global Financial Centres Index 20 (GFCI 20)

London, New York, Hong Kong, Singapore and Tokyo remain the five leading global financial centres. London is one point ahead of New York (on a scale of 1,000 points this is insignificant). Singapore is 42 points behind New York in third place. Tokyo, in fifth place, is 60 points behind New York.

The UK ‘Brexit’ referendum result is not reflected in the GFCI 20 results so far. GFCI 20 was calculated based on data collected up to the end of June 2016 - a few days after the referendum result on 24 June. Looking ahead to GFCI 21, assessments given to London in July and August are significantly down from previous levels. GFCI 21 may show some significant changes. London, New York, Singapore and Hong Kong remain the four leading global financial centres.

All North American centres except Calgary are up in the ratings. Calgary focuses on energy finance and the recent volatility in oil prices is likely to have caused a decline in Calgary’s rating. San Francisco and Boston are second and third in North America – reflecting the growing importance of FinTech. Chicago re-enters the GFCI top ten and Toronto, the leading Canadian centre, is now 13th having been eighth a year ago.

Western Europe remains a region in flux. Luxembourg and Dublin show strong rises in the ratings whilst Geneva and Amsterdam fall. Early indications following the Brexit referendum result are that decision-makers are looking around and considering Luxembourg and Dublin as potential locations if they need to leave the UK. Wealth management in Geneva may be suffering from increased transparency requirements of international regulators. Seven of the top ten Asia/Pacific centres see a fall in their ratings.

Some Eastern European and Central Asian centres prosper whilst others struggle. Warsaw, Tallinn and Riga are now the leaders in this region. Istanbul, Moscow, St Petersburg and Athens continue to languish. Turkey and Russia are both involved in armed conflict. Although geographically removed from the fighting, the financial centres in these countries are clearly affected by the uncertainty this creates.

Australasian centres are doing well. Three of the top five global centres are Asian. Hong Kong and Singapore had some small declines. Sydney and Melbourne both saw solid increases in their ratings.

Offshore financial centres are recovering lost ground. Jersey, Guernsey, the Isle of Man, the Cayman Islands, Bermuda, the British Virgin Islands, and are all up in the GFCI 20 ratings.

Middle Eastern centres decline. With the exception of Bahrain which saw a modest rise, all Middle Eastern centres were somewhat down although Dubai only fell by a single point remaining well ahead of other centres in the region.

Latin America down, Caribbean Up. Sao Paulo, Rio de Janeiro and Mexico continue to struggle. Trinidad & Tobago have entered the index for the first time in 71st place. They have made a concerted effort with their international marketing recently (disclosure: Z/Yen has been paid to assist them on certain aspects).

Mark Yeandle, Associate Director at the Z/Yen Group and the author of the GFCI, said "Changes in perceptions following the Brexit referendum are not yet reflected in the GFCI. However, early signs are that London could see a decline next time round. Which centres may gain from this is hard to predict.”

Professor Fan Gang, CEO of the CDI, said "We are delighted to be working with Z/Yen Group in producing this index. It is a very exciting time for financial centres in China as Shanghai, Shenzhen and Beijing all rose in the GFCI ratings in GFCI 20. Dalian and Qingdao were also seen as performing well in recent editions. We anticipate that Chinese financial centres will rise rapidly in importance around the world.”

The FSC Mauritius issues the Draft Investment Banking Rules for consultation

The FSC Mauritius issues the Draft Investment Banking Rules for consultation

Communiqué

The Investment Banking Rules (Draft)

Comments on Investment Banking Rules

Mauritius Times: An Unending Mess

This continuously weakening stance caused by internal divisions within the ranks of the government is a great disservice to the nation. Were the government meaning business, it would have acted decisively to stop disruptive forces within its ranks. It would have acted about succession to the prime ministership at the appropriate time without opening up the doors to speculation about the pros and cons of the decision. It would not have allowed a PM torn between his Minister of Good Governance and his Minister of Finance to expose a fatal flaw that the opposition is fully exploiting to resurface in popular esteem. All this ends up showing in public that the government is not in control of itself. Such a situation can be extremely damning for the government if it were to endure. 

Mauritius Times

Seychelles: International Business Companies Act 2016

The International Business Companies Act 2016 ("the Act") provides for a strong yet attractive regulatory framework (meeting the international standard, especially the work of the FATF and OECD Global Forum on Transparency and Exchange of Information for Tax purposes ), conducive to continued competitiveness and sustained growth for Seychelles as an International Financial Services Centre. Strengthening regulatory aspects of the law to meet international standards depicts our commitment and adherence to international best practices, particularly in regards to the international initiatives relating to improving transparency which will positively impact the Seychelles reputation in the eyes of the international community.

The major policy changes, amongst other changes, under the Act are as follows:

1. The list of prohibited activities that an IBC shall not undertake has been extended to include carrying on securities business, mutual fund and gambling business as defined under the relevant Seychelles laws unless such activities are licensed or otherwise legally able to do so under the laws of each country in which the IBC carries on such business.   
2. Every IBC will be required to keep a beneficial ownership Register at its registered office in Seychelles (exemption applies for listed IBCs and subsidiaries of listed IBCs).  
3. All IBCs will be required to file with the Registrar a copy of its register of directors. Every IBC shall have a period of 12 months from the Act commencement date to file a copy of its register of directors with Registrar and the filed register will be made publicly accessible after two years following the Act commencement date.
4. Clear provisions have been introduced to prohibit an IBC from issuing bearer shares.  
5. New provisions have been introduced to discourage aged shelf companies. The new Act provides that the first director(s) must be appointed within 9 months of the date of the company’s registration.
6. The striking‐off process has been reduced from 180 days to 90 days. 
7. The new Act provides for Protected Cell Companies, reserve directors, optional registration of the company’s register of members and beneficial owners, optional filing of annual financial statements with the Registrar and disqualification of a director by the Court.
8. The fine under the general offence provision and the fine for making false statements to the Registrar have been increased to $50,000. The penalty fee for failure to keep accurate Register of Members has been increased to $500 and $50 per day thereafter. A new provision has also been included to require the Registrar, before imposing any penalty fees under the Act, to give the person concerned an opportunity of being heard.
9. An IBC will no longer be able to hold bonds, treasury bills and other securities issued by the Government of Seychelles or the Central Bank of Seychelles and will no longer be permitted to hold a lease of property for use as an office from which to communicate with members or where books and records of the company are prepared or maintained. The new Act clarifies that an IBC may own or manage a vessel registered in Seychelles under the Merchant Shipping Act and the vessel may visit or be situated in Seychelles waters, provided that the IBC shall not carry on any business in Seychelles including, without limitation, fishing, charter or tourism business involving the vessel.  
10. The IBC search fee has been reduced from $100 to $10.  
11. A person aggrieved by a decision of the Registrar may, within 90 days of service of notice of the decision of the Registrar, appeal against the decision to the Appeals Board established under the Financial Services Authority (Appeals Board) Regulations, 2014. 

Mark Chudleigh and Alex Potts Author "Offshore Regulators Get Tough"

Sedgwick Chudleigh partners Mark Chudleigh and Alex Potts have authored a white paper, “Offshore Regulators Get Tough”. The paper discusses how the Bermuda Monetary Authority (BMA) and other offshore financial services regulators have been threatening to “get tough” on enforcement actions.

David Cosgrove files for a review of his sanction in Mauritius

In papers filed with the Mauritius Financial Services Commission (FSC) last week, David Cosgrove claims that the regulator has acted “unreasonably and with an improper purpose” in the actions it has taken against him. Cosgrove is applying for a review of the decision by the FSC’s enforcement committee to disqualify him from holding any position as an officer of any licensee of the FSC for a period of five years.

Moneyweb

How to hide it: inside the secret world of wealth managers

They know more about their clients than the clients’ own wives. They are loyal in the face of appalling behaviour. They are the brains behind the most ingenious tax avoidance schemes. And there are more of them than ever

The Guardian

Gowling WLG - French tax authorities reduce trustee penalties for failure to comply with reporting obligations

Until now, Article 1736 IV bis of the French Tax Code (FTC) has imposed very high penalties for trustees who fail to comply with filing requirements imposed by French tax legislation applicable to trusts. Following the decision of the Constitutional Court dated 22 July 2016, French tax authorities have made changes to the penalties applicable for failure to comply with some disclosure obligations, in particular the ones applicable to trustees ("circulaire" of 14 September 2016).

Gowling WLG

Maurice. Lagon bleu et paradis fiscal

Les plages de sable fin ne sont pas le seul atout de l’Île Maurice. L’agence de presse Imaz Press Réunion revient sur le régime fiscal particulièrement favorable qui incite les entreprises et les particuliers à s’établir dans le pays.

Courrier international

Moody's: Wagamama outclasses European high-yield casual dining peers in credit terms

In the European high-yield casual dining sector, Mabel Mezzco Limited's (Wagamama, B2 positive) strong performance and significant deleveraging in the past year mean its credit metrics outpace peers PizzaExpress Financing 1 plc (Pizza Express, B3 stable), Stonegate Pub Company Limited (Stonegate, B2 stable) and Financiere Quick S.A.S. (Quick, B3 stable), says Moody's Investors Service in a new report, titled "European Restaurant Industry - Relative Comparison: Performance and Credit Metrics of Four High-Yield European Restaurant Companies"

FSC Mauritius: Global Legal Advisory Services Licence – FS-1.10

For international law firms interested in establishing regional offices in Mauritius to provide legal advisory and international arbitration services to global business clients. Such law firms will be eligible for a 5-year corporate tax holiday.

FSC Processing Fee: USD 1,000

FSC Fixed Annual Fee: USD 2,500

Application Form

Licensing Criteria

Juristconsult Chambers: We're Moving

Juristconsult Chambers is moving to Ebène as from Friday 23 September 2016

IMF: Leveraging Financial Technology for the Underbanked

More than two billion people worldwide are without bank accounts. Most are poor and only a third of adults in sub-Saharan Africa have access to any kind of basic financial services. IMF Deputy Managing Director, Mitsuhiro Furusawa, says the region is running the development race weighed down by exclusion.

“Access to financial services allows families to smooth out consumption and invest in their futures through education and health. And access to credit enables businesses to expand, creating jobs and reducing inequality,” Furusawa added.

Furusawa is in Dakar to attend a conference designed to promote financial inclusion in West Africa. With less demand for African products, the slower global economy has put added pressure on many African economies, particularly the natural resource exporters, to find ways to reinvigorate growth. Furusawa said financial inclusion is one key for promoting strong and stable economic growth.

There are many reasons for the lack of access to traditional financial services, but Roger Nord, Deputy Director of the IMF’s African Department, says technological innovation within the financial sector, commonly known as Fintech, is perhaps the most promising way to advance financial inclusion.

“Access to formal financial services is often difficult in low-income countries: bank branches are concentrated in urban areas and costs & fees can be high. Financial technology can tackle both problems at once: suddenly financial services are available to anyone with a mobile phone at a fraction of the cost,” Nord said.

And the rapid spread of technology is proving its worth. Sub-Saharan Africa leads in the adoption of mobile banking around the world.

Simple payments to simple savings

In Kenya for example, the mobile banking system known as M-Pesa, that started as a way for mobile phone users to transfer unused air minutes to each other, quickly turned into a cash payment platform. Rather than spending several days traveling by bus to deliver cash to family members in rural villages, one could send money via text message, at a minimal cost.

Local banks have since teamed up with M-Pesa, and started offering users a savings option for unused balances in their M-Pesa accounts—paying interest, regardless of how small the account balance. Meanwhile, user data enables the issuance of micro-loans to those deemed creditworthy.

As a result, more Kenyans are saving and borrowing, and the proportion of the population excluded from financial services has fallen below 17 percent. Kenya is now third in sub-Saharan Africa for financial access, behind South Africa and Mauritius. Other East African countries such as Tanzania, Uganda, and Rwanda are following Kenya’s example, using financial technology to leapfrog traditional banking systems and provide financial services to all levels of society.

The promise of Fintech

Another promising application of Fintech for low-income countries could be to lower the cost of cross-border transfers, thereby addressing the worrisome loss of correspondent banking relationships that many low-income countries have seen in recent years as commercial banks cut back in the face of rising compliance costs. This could provide a significant boost to low-income countries that receive significant remittances from overseas.

The power of financial technology to lower transaction costs and expand access to financial services is not limited to low-income countries in Africa. A recent conference co-organized by the IMF and Singapore Management University illustrated the global potential of Fintech.

In China, the financial services arm of online retailer Alibaba has grown so rapidly that it now surpasses the largest Chinese commercial banks in transaction volumes. India’s biometric identification system, Aardhar, has started to open up low-cost financial services to previously underserved populations. And, in advanced economies, there are a multitude of technology start-ups aiming to revolutionize global payment and settlement systems through the use of digital currencies and blockchain technology.

Meanwhile, regulators are carefully considering the impact of new technology on the stability of the financial system, including on money laundering and the financing of terrorism. The financial technology revolution is likely still some way off, but for low-income countries the benefits are tangible and, as in the case of Kenya’s M-Pesa, already evident. Financial institutions and central banks are quickly adapting to Fintech innovations that will ultimately bring more unbanked into the banking fold, which Furusawa says is essential for the economic development of the region.

The conference in Dakar is co-hosted by The Bank of West African States (BCEAO) and the IMF, and will examine the prospects and policy options for promoting financial inclusion in West Africa.

World Economic Freedom 2016: Mauritius First in Africa

Mauritius tops the rankings in Africa and is placed at the 5th position worldwide with regard to Economic Freedom according to the Fraser Institute’s annual Economic Freedom of the World report released on 15th September 2016 in Canada.

With an average score of 7.98 Mauritius is tied for fifth along with Canada; Georgia; Ireland; and United Arab Emirates and is positioned among the top rated ten countries with an economic freedom worldwide.

Fraser Institute, an independent Canadian public policy research and educational organisation connected to a global network of think-tanks in 87 countries assesses 159 countries and territories based on five areas namely: size of government; legal structure and security of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labour and business.

In this year’s ranking, which is based on 2014 data, Hong Kong is again at the number one position followed by Singapore at number two. The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom.

The report also assesses country’s performance in the above-mentioned categories. According to the report, Mauritius has performed relatively well on the various indices with the following scores: size of government (7.6) rank 36th; legal structure and security of property rights (6.5) rank 42nd; access to sound money (9.6) rank 25th; freedom to trade internationally (8.5) rank 6th; and regulation of credit, labour and business (7.7) rank 39th.

It will be recalled that since its first publication in 1996, numerous studies have used the data published in Economic Freedom of the World to examine the impact of economic freedom on investment, economic growth, income levels, and poverty rates.

This Is Not A Drill: Pizza Hut® Unleashes Latest Cheesy Goodness In All New Grilled Cheese Stuffed Crust Pizza

Grilled Cheese. Good. Original Stuffed Crust® Pizza. Good. Grilled Cheese Stuffed Crust Pizza? REAL GOOD.

In a pizza that needs little explanation, the newest Pizza Hut mash-up combines two of the most beloved foods of all-time – grilled cheese and pizza.

The Grilled Cheese Stuffed Crust Pizza features extra gooey cheddar and mozzarella cheese stuffed in and baked onto the crust. To finish off the grilled cheese crust, it is topped with toasted breadcrumbs and melted butter for the ultimate grilled cheese experience. A large one-topping Grilled Cheese Stuffed Crust Pizza is available beginning Sept. 19 for just $12.99.

"The Grilled Cheese Stuffed Crust Pizza is the perfect combination of a classic grilled cheese and a traditional pizza," said David Timm, chief marketing officer, Pizza Hut. "The result is a delicious, flavorful and indulgent pizza that packs the punch of a gooey, cheesy, crunchy grilled cheese."

Cheese is rapidly becoming one of America's favorite foods. Related, pizza is often ranked as the most popular food in America. To round out the equation, grilled cheese has been pegged as one of the most comforting foods ever imagined. Now, all of these "favorites" can be enjoyed as one.

The Grilled Cheese Stuffed Crust Pizza can be topped with any one of the following fresh Pizza Hut ingredients: Fresh mushrooms, fresh spinach, fresh red onions, fresh green bell peppers, sliced banana peppers, sweet pineapple, sliced jalapeño peppers, Mediterranean black olives, Peruvian cherry peppers and diced Roma tomatoes as well as pepperoni, Italian sausage, premium salami, classic meatballs, slow-roasted ham, hardwood smoked bacon, grilled chicken, beef and seasoned pork. Pizza lovers can customize their pizza with a choice of five sauces, including Classic Marinara, Premium Crushed Tomato, Creamy Garlic Parmesan, Barbeque and Buffalo. They can also top their pizza with a choice of sauce drizzles, including Balsamic, Barbeque and Buffalo. 

FAO: The Shark Fin Soup

In the Seychelles, sharks are considered prone to over-exploitation and population collapse due to their life history characteristics. As highlighted in the Seychelles NPOA Shark 2007, the shark stocks of Seychelles, like many around the world in recent years, have been the subject of concerns to the sustainability of current exploitation. The practice of “finning” in the past was common. But today, shark finning has been shown as a non-sustainable practice. Today, this practice is almost completely abandoned on board. However, Seychellois think that efforts should continue. Seychelles authorities approached SmartFish programme for a support to develop awareness raising on the national situation in Seychelles, where there is still a danger that coastal sharks species that are targeted for finning.

FSC Mauritius: Investment Banking Licence – FS-6.1

An Investment Bank holding an Investment Banking Licence and regulated by the Financial Services Commission (FSC) will be exempt from corporate tax for 5 years in Mauritius. 

An Investment Bank may by way of business engage, in one or more of the following activities:

1. Investment Dealer (Full Service Dealer including underwriting);
2. Investment Adviser (Unrestricted)
3. Investment Adviser (Corporate Finance Advisory);
4. Asset Management;
5. Distribution of Financial Products; or
6. such similar activities as may be approved by the FSC

Application Form
Licensing Criteria
FSC Processing Fee: MUR 100,000 [approx USD 3,200]
FSC Fixed Annual fee: MUR 300,000 [approx USD 9,600]
Minimum Stated Unimpaired Capital: MUR 50,000,000 [approx USD 1.6M]

OIL: The Super Set

Of the various forces that have buffeted offshore financial services in recent years, regulation and emerging demand bases are probably the most significant. These forces have guided investors to particular jurisdictions with increasing regularity, altering – but not necessarily redrawing – the map. Indeed, certain locations achieved a pre-eminence within the industry, and for characteristics that are a direct response to offshore demand, that it calls into question the applicability of the term “offshore.”

OIL Opinion

WISeKey to Launch a Blockchain Center of Excellence in Mauritius to Develop a Blockchain Platform

WISeKey International Holding Ltd, a leading cybersecurity company, during its participation at the Mauritius Investment Board Blockchain event, announced its intention to establish a BlockChain Centre of Excellence in Mauritius to deploy a Trusted Blockchain as a Service platform, to assist the Mauritius Government to create a Blockchain Ecosystem.

WISeKey will work with experts from industry, government, and academia to address businesses’ most relevant blockchain developments with practical, standards-based solutions using available blockchain technologies. This dedicated center of excellence will conduct research, rapid pilot prototyping, co-creation of use cases and IP creation on blockchain technology and platforms. The Mauritius BlockChain Centre of Excellence will recommend a National Blockchain Platform to facilitate enterprises to swiftly adopt and on-board blockchain based solutions and services.

The Mauritius Blockchain Center of Excellence will help position the country as a key and active player in the blockchain space. It will provide access to both policy, technical and business expertise around blockchain. WISeKey will be cooperating with local companies participating at the center on building points of view, proof of concepts, policies, educational materials including addressing all the distributed ledger capabilities across different blockchain schemes (public, consortium and private), with industry verticalization and domain specialization (IoT, transactions, messaging, etc.), underpinned by the best underlying technologies from startups, our key partners and from the community.

Carlos Moreira, Founder and CEO WISeKey said: "We strongly believe that the Blockchain Center of Excellence will disrupt business flows and processes across different industries in Mauritius and will position the country as one of the Blockchain Platforms and Hubs."

WISeKey will be localizing in Mauritius at the development of the WISeID Blockchain which is constantly growing as new blocks are added to it with a new set of recordings. Each WISeID node gets a copy of the WISeID Blockchain and gets downloaded automatically upon joining the WISeID network. Through the WISeID BlockChain app users are always in control of their digital identity stored on their mobile, IoT sensor and or computer and is only the user who determines which identification attributes are shared with social media, credit cards, merchant sites etc. never disclosing the Personal Identifiable Information (PII) if not required or necessary. WISeID uses BlockChain as a public, immutable ledger that allows third parties to validate that the original Identity or Attribute certifications provided by a Third Trusted Party has not been changed or misrepresented. Keeping control of Digital Identity is key to protecting user’s personal data.

The Mauritius Event: The next Blockchain Valley

Organized by Board of Investment (BOI) of Mauritius

The Board of Investment (BOI) is the national investment promotion agency of the Government of Mauritius with the mandate to promote and facilitate investment in the country. It is the first point of contact for investors exploring business opportunities in Mauritius and the region. BOI also assists investors in the growth, nurturing and diversification of their business.

BOI Announcement:

BMPL Ebene Cybercity has today been the scene of a historical landmark in the shaping of our digital economy.

The very first seminar on Blockchain exceeded our expectations with overwhelming appreciation from the audience. More than 200 stakeholders across various sectors, including Banks, Assets Management, Insurance, Tourism, ICT and entrepreneurs from over the world attended the seminar.

As an indication, investments in bitcoin and Blockchain infrastructure have already topped USD 1 billion, and every major bank in the world is increasingly paying attention to this technology.

The seminar saw the participation of renowned international speakers who intervened on diverse themes, namely demystifying Blockchain, developing its ecosystem, its regulatory framework and the potential applications of Blockchain in today’s innovation-driven economy.

Mr. Carlos Creus Moreira, Chairman, CEO & Founder of WISeKey made a clear presentation of Blockchain technology. He highlighted the differences between Blockchain and other technologies such as cloud computing, and expanded on the potential in creating revolutionary solutions which do not exist in the marketplace today.

Mr. Sébastien Couture, co-founder of Stratumn, demonstrated how Blockchain builds consensus around multiple institutions, enterprises and individuals working together by eliminating the role of the middleman and improving efficiency while at the same time improving trust between all the parties.

His colleague, Mr. Anuj Das Gupta, Head of Research at Stratumn, elaborated further on the subject by discussing the potential applications of Blockchain, including in KYC systems and Smart cities. He also suggested that Blockchain technology could be used in diverse sectors such as energy and healthcare.

We also had the pleasure of listening to Ms. Primavera de Fillippi, Researcher at Centre National de Recherche Scientifique, who elaborated on the need for a shift in the regulatory mindset, moving from a bureaucracy base, friction and permission (permission-based rules) to one based on accountability, transparency and innovation (information-based rules) in a bid to reconcile the objectives of providing comfort and security to users while ensuring that regulations do not stifle innovation.

Finally, Mr. Larry Christopher Bates, Chief Security Officer and President of Bitland Global, suggested that Mauritius can become the “Blockchain Valley” through the advent of a cyber-security Hague for international data-houses. He maintained that this will inevitably contribute to economic growth.

Blockchain as a technology is here to stay. The onus remains on us to harness its advantages and leverage them for the benefit of Mauritian businesses, consumers and the Government. In addition, Blockchain KYC’s efficiencies and cryptographic protocols deliver stronger security and faster compliance with reduced operating costs.

The seminar has set the scene for this technological revolution. We now have to develop the Blockchain ecosystem, including devising an appropriate regulatory framework, build the local manpower and encourage both public and private sectors to integrate the technology in their structures to trigger a new phase of efficiency led by the growth of their ventures.

A small country, Mauritius has the potential to rapidly implement Blockchain in day-to-day business.

Far from being the end, this is rather the dawn of a new beginning. We will follow up on this seminar with another one in a few months. The objective is to maintain the momentum, attract more global players and position Mauritius as a trusted and secure platform in the region for the deployment of Blockchain technology.

Already, WISeKey and Bitland have indicated that they are considering setting up operations in Mauritius.

This can only bode a bright future for the next ‘Blockchain Valley.’

Nissin Foods® USA Makes a Historic Recipe Change to Improve its Iconic Cup Noodles® Product Lineup

Today Nissin Foods, the inventor of instant ramen, announced a significant recipe change for its iconic Cup Noodles brand in the U.S. For the first time in its recent history, the beloved noodle brand is taking a step forward in improving its nutritional makeup by reducing sodium, removing added MSG and removing artificial flavors. Celebrating the 45th anniversary of Cup Noodles, Nissin is making thoughtful nutritional changes to its product while maintaining a great taste fans love – all at the same, affordable price.

"Listening to our consumers has always been at the core of what our company, and the Cup Noodles product in particular, was founded on," said Al Multari, president of Nissin Foods USA. "Most recently, we asked our consumers what changes they'd like to see in our Cup Noodles product. They told us that without sacrificing taste, the three most compelling changes we could make to our recipe were: lower sodium, no added MSG and no artificial flavors. This is exactly what we've been able to accomplish. Our consumers rely on Cup Noodles as a convenient, affordable and quality meal to help keep them going – and now, they can feel even better about eating it."

For almost 60 years Nissin has offered innovative, satisfying products with a wide range of flavors. Invented in 1958 by Momofuku Ando, who was inspired by the hungry masses he witnessed after World War II, ramen has become an affordable, delicious quality meal or snack that consumers love. Keeping the importance of taste and cost in mind, Nissin challenged its research and development team to accomplish the task to help address today's modern preferences for this ramen product.

After a series of blind taste tests with people who frequently consume the product, results revealed that consumers liked the new version of Cup Noodles just as much as the current. Nutritional changes include:

• A reduction of more than 20 percent in the sodium content of the three best-selling flavors, and a reduction of approximately 15 percent in sodium content of all flavors
• Removed added MSG (but contains small amounts of naturally occurring glutamates in ingredients such as soy sauce, tomato and red chili pepper)
• Removed all artificial flavors and added natural ingredients (such as turmeric, paprika and lime)

Nissin is committed to providing its consumers with a delicious, affordable meal and is constantly evolving its products to align with consumer preferences. With this recipe change, consumers can be assured that they are receiving a product that meets their expectations of a delicious taste and an improved nutritional recipe.

Consumers can now find the new product on store shelves nationwide. With this new Cup Noodles lineup, the brand will also launch its first-ever U.S. national advertising campaign in November 2016.

Behind-the-Scenes Video of New Cup Noodles Recipe:

Bedell Trust announces completion of management buyout and wins 'Trust Company of the Year' at annual STEP awards

Bedell Trust, the leading award-winning provider of corporate, fund and fiduciary services, is pleased to confirm that the management buyout ("MBO") announced earlier in April 2016 has successfully received all regulatory approvals and completed on Monday 12th September. Backed by leading independent private equity firm Inflexion, the transaction means that with immediate effect, Bedell Trust and Bedell Cristin are now two separate businesses.

Nick Cawley, who will continue to lead the newly independent business as Chief Executive Officer, commented:

"Bedell Trust has witnessed accelerated growth in recent years and we anticipate this growth will continue. From our clients' perspective, there will be no change to the management team or their existing relationship contacts and we remain firmly committed to providing best in class service. Indeed, we believe our MBO will help create an even better platform to further build our offering to clients.

We are delighted to be partnering with Inflexion, who have a compelling background in supporting the strategic aspirations of financial services sector businesses similar to ours and we are confident that we are working with the very best partner.

This next exciting stage of our evolution has only been made possible because of the support provided by the continuing management team of Bedell Trust and the partners at Bedell who both helped build and subsequently grow Bedell Trust into the successful and dynamic business that it is today."

Florencia Kassai, Partner at Inflexion said:

"This is an exciting time for both Bedell Trust and Inflexion. Bedell Trust is renowned for great client service and underpinned by a highly credible reputation and we are committed to supporting Bedell Trust in achieving their strategic aspirations across each of the strongly growing markets in which they operate. This partnership is based on the shared vision of building a business for the long-term, utilising our sector expertise, capital and ambition. We firmly believe Bedell Trust will emerge as the leading player in the corporate services, fund and fiduciary administration sectors".

In addition to completing the MBO, Bedell Trust has also been recently recognised as the 'Trust Company of the Year' at the prestigious 2016/2017 annual STEP awards. This is the second time in recent years Bedell Trust has achieved this award which is seen as one of the preeminent accolades within the global private wealth industry.

Bedell Trust has over 250 employees and operates from Jersey, Guernsey, London, Luxembourg, Dublin, Singapore, Mauritius and Cayman.

Advisers involved in the MBO transaction included:

For Bedell Trust - Macfarlanes and Bedell Cristin (Legal), Wyvern (M&A), Alex Picot (Structuring, Tax), KPMG (Compliance Due Diligence), Cooper Gay (Insurance)

For Inflexion - KWM and Mourant Ozannes (Legal), Deloitte (Financial Due Diligence), Jardine Lloyd Thompson (Insurance)

Offshore Pilot Quarterly (September 2016, Volume 19 Number 3)

Preamble

September’s quarterly mostly comprises extracts from the speech which I gave this month at Jesus College in Oxford when the 26th annual symposium, organised by Offshore Investment magazine, was held. Regular readers will be familiar already with the key themes and thoughts interwoven into the text. History, however, takes a back seat this time, despite my belief, like Winston Churchill had, that “a good knowledge of history is a quiver full of arrows in a debate”.

Despair and Extinction

Every year James Ward puts on the Boring Conference. What are some of the topics? One talk was about sneezing and another about electric hand-dryers. This is most certainly not a symposium about boring things as you have already discovered. James says that the trick to giving a boring speech is that even if the title is breathtakingly bland, like mine, the content shouldn’t be. I will attempt to meet his standards.

In 2013 here in Oxford I quoted Woody Allen, that sage of the cinema, at the start of my talk. I felt it appropriate. Regrettably, I still do. “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly”.

Having said that, the optimism was palpable concerning Brazil three years ago and with the demise of Hugo Chávez that year a ray of light shone momentarily that Venezuela might emerge from the political pit which it had fallen into. Today the Brazilian basket case is all too apparent to see by everyone and rather than the Olympic Games, it is the political fun and games that most Brazilians are focused on. As for Venezuela, that pit has just got deeper.

Argentina, however, appears to have found a saviour and Perú a wise head on old shoulders, but as for Venezuela, Nicolás Maduro, an ardent Hugo Chávez acolyte, who is now president, has not secured a firm political footing; quite the opposite, he seems to be caught in quicksand with just one inevitable result as he flails his arms. The likes of Argentina have cast off the yolk of leftist dogma. Mauricio Macri, a right wing business tycoon, and Argentina’s new president, in the first two months in power had more than 27,000 civil servants fired; duties on mining exports have been removed and state subsidies on essential services have been lifted. We’re talking macri economics versus macro economics. He is sweeping clean after the populist rule by Cristina Fernández and her late husband, Néstor Kirchner. Macri may have been president of Boca Juniors football club in Buenos Aires for 12 years but he has no intention of playing ball with the old political establishment. Further north and for the first time in over a decade a Venezuelan president, in this instance Nicolás Maduro, a clone of Hugo Chávez, is confronting a first ever opposition-controlled parliament. And President Rafael Correa in Ecuador has faced staged mass protests by the country’s indigenous and workers movement.

But despite politics and economics representing a seesaw on the subcontinent, one which has no handles to hold on to, the region continues to play a more international role so understanding the Latin psyche will become increasingly relevant for both businessmen and those foreign professionals who see the subcontinent as a new and profitable frontier.

Machiavelli speaks of the unremitting malice of fortune; certainly the economies across the world have been, and continue to be, hostage to it. None more so than those in South America. It’s biggest economy, Brazil, is experiencing a recession with such a ferocity not known in more than three decades, some say ever, and with the accompanying political pantomime only in the first act, there is no clear end in sight: whose legs are guiding the pantomime horse?

Brazil’s economy is far from solid: more like the consistency of a soufflé with street protestors demanding “More Argentina, less Venezuela”. In June the government reported that GDP had contracted 0.3 per cent in real terms in the first quarter of this year and it is 5.4 per cent smaller than it was a year earlier. The country has an interim president whilst Dilma Rousseff battles impeachment charges which may have been resolved or not before I deliver this talk. Economic and political uncertainty permeates every corner of society. A poll released in April showed that 63 per cent of respondents across this huge country described Dilma Rousseff’s government as “bad or terrible”. 

Michael Temer, the interim president, like President Macri, wants to introduce sensible economic policymaking. Public spending is a challenge, not to mention reforming archaic labour laws and the Byzantine tax code. All very well, but the interim president has himself been implicated in past corruption scandals and who is a constitutional lawyer having been a congressman since 1987. Let’s just hope that his own personal constitution can handle the heat.

In 2015 the economy shrank by 3.8 per cent, its worst annual performance since 1981. Inflation was nearly 11 per cent at the end of last year, a 12-year high, and unemployment reached 9 per cent. GDP is expected to decline by a similar rate as it did in 2015. Unemployment and inflation is expected to continue to rise, just like the anger of the people who, not unlike many citizens in the West, have become acutely aware of the demarcation line between themselves and the rich.

This is a country with a government that needs to refer to a dictionary to grasp the clear meaning of efficiency. A survey in June published by IMD, a Swiss business school, placed Brazil last out of 61 countries in the efficiency of its government, and behind, would you believe it, not only war-torn Ukraine, but venal Venezuela.

I’ll be returning to general developments but as wealth generation is today’s focus I want to look at wealth creation in Latin America. To do so requires a glance at history to understand that much of the wealth in Latin America is rooted in old wealth created by and concentrated in a few families. I have included an essay entitled “Latin America: into the mainstream” in my working papers which will give a taste, a feel of this vast region’s people via its history, past isolation and culture.

The countries comprising Latin America, not dissimilar to Europe, bar less languages, are distinct. Just like Cinderella’s ugly sisters, therefore, one size of shoe does not fit everyone, anymore than it does in Europe.

A Proud People

Latin America has left obscurity behind with a new sense of strength and confidence. The controversial Cecil Rhodes who looks down upon us from Oxford’s Oriel College and is the founder of the country where I spent my youth, said that “to be born an Englishman is to win first prize in the lottery of life”. Students have protested about the era he represents and their protests are but one more symptom of the current awareness of the chasm between the prosperous and the poor which has created a bias and suspicion regarding offshore centres and their uses, especially concerning taxes.

The peoples of South America share Rhodes’ sentiment in the love of their own particular country, if not his imperialism. Of course, we all share universal values and so Latins are not aliens from another planet. Their basic objectives and needs are just the same as ours; it is only that their priorities may differ to some extent from our own. 

According to Julius Bär, Latin America is the fourth largest wealth region in the world. The middle class has expanded along with the region’s economies and this new base of consumers has meant profit for the wealthy enterprising businessman.

In 2014 the population of billionaires grew by 38 per cent, from 111 to 158; that was the fastest rate than anywhere else in the world, including Asia. A large number live in Brazil, Mexico, Chile and Peru, in that order. Carlos Slim from Mexico, the telecommunications tycoon with heavy investments in real estate and a variety of industries, was once the richest man in the world, but he still heads the Latin American list.

It is important to consider each country’s governance – even if politically the picture is good. Latin America, for example, has issues surrounding transparency, legality and fairness. Investors - be they individuals or multinational companies from abroad – have to accept the differing levels of enforcement of those three factors across the region. In particular, for commercial or industrial enterprises it is possible that any litigation that arises could take years to resolve. In this regard, Brazil remains near the bottom of the World Bank’s index for ease of doing business in Latin America; already its complex tax code and labyrinth of regulation presents a daunting challenge. Brazil has been known to have had, for instance, over 23,000 changes in its tax system in one year.

At the end of the day, for the South American businessman, his objectives and needs usually come down to protecting his assets and ensuring that his wealth remains in the family while agreeing with Anton Chekhov that every person lives his real, most interesting life under the cover of secrecy. The Common Reporting Standard is, therefore, an anathema, a threat to this code of secrecy.

If there is an unwillingness to place much reliance on governments, there is an equal degree of scepticism regarding the law. In looking at the justice systems it is perhaps wise to remember the words of the Greek statesman and poet, Solon: “Laws are like spiders’ webs: if some light and powerless thing falls into them, it is caught, but a bigger one can break through”. That sounds appropriate when considering America’s co-operation with the Common Reporting Standard. [Please see September’s Latin Letter].

Business (Not) as Usual

The fall out between the United Kingdom and the European Union reminds us that Latin America doesn’t claim sole rights to enormous sudden political shifts. Old-order politics, not just in Latin America, are being increasingly criticised and shunned by electorates. Similarly, citizens worldwide are expressing resentment over tax dodgers, voicing loudly their aversion to evasion which has often been linked with the very wealthy, a group during this period of changing political and social trends, seen to be the real benefactors of liberal capitalism and which because of that, have made the Panama Papers poisonous, a subject I have included in my conclusion. The average CEO in the US earns 335 times the wage of the average worker.

What of external affairs that affect Latin America? America’s populist leanings concern Latin America. Meanwhile, China – and it is both China and the US relations with Latin America that carry most weight – continues, as it always has, to maintain its impassive Sphinx-like stance. The rise of China in Latin America versus the weakening of the US influence that is closer to just treading water, is common talk these days but we should remind ourselves that the region with its population at over 600 million is an important trade area for US-based companies with US producers exporting over three times as many products there than to China. If you exclude Mexico, Central and South America have purchased over 50 per cent more goods from the US than China.

Conversely, it has traditionally been South American commodities that the Middle Kingdom has centred its relationship on. This, however, is changing.

It should be remembered that Canada (first) and Mexico (third) are America’s leading trade partners and together count for around 40 per cent of US global commerce. In Mexico’s case, it is responsible for about 60 per cent of all US trade with Latin America.

Last year, before Brazil’s fall from grace, the two Latin countries which were the economic powers in terms of GDP were Mexico and Brazil; Colombia can be included, with reservations, due to its encouraging economic development and expanding economy.

Brazil with its continental size and a population exceeding 200 million is an attractive trade partner whereas Mexico has two advantages: its proximity to the US and the key role it has in the North American Free Trade Agreement with the US and Canada. The tres amigos, a Spanish spin on describing the countries’ leaders, met this June in Canada when President Obama was emphatic that a Trump presidency would not derail their crossborder ties. This was the US president’s final NAFTA summit meeting.

A day before the summit, however, Donald Trump lambasted the NAFTA treaty, calling it a disaster. No friend of Mexicans, threatening a wall, reminiscent of former East Germany, to keep them out, Trump has had his style of politics likened to that of dictators such as Hitler and Mussolini, who were also showmen, although far more dangerous, who also exploited the impoverished and disgruntled, and said what their audiences wished to hear. Mexico may be America’s next-door neighbour but, ironically, it could wind up being, philosophically, more distant from it than Chile’s Tierra del Fuego if a president Trump followed through on his threat and goes after NAFTA.

Going to Shell in a Basket

“Politics and Principles: A Man’s Need to Blush”, which is the title of this month’s Latin Letter, contains the essence of the remainder of the speech and will help you understand the significance of these words written by Adam Szubin, acting undersecretary for terrorism and financial intelligence, Department of the US Treasury: “But there is a money laundering method that is less exotic yet every bit as dangerous: shell companies incorporated in the United States”. It is a method, of course, ideally designed for tax evasion as well.

Offshore Pilot Quarterly (independent writing for independent thinkers) has been published since 1997 by Trust Services, S. A. and is written by Derek Sambrook