Mauritius IFC

FINANCIAL TECHNOLOGIES AND

FINTECH PLATFORMS

Discover how Bhumishq empowers financial technologies
and fintech platforms for Africa, Latin America,
ASEAN and intra-IFCs.

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Bhumishq

 

FINANCIAL TECHNOLOGIES AND FINTECH PLATFORMS

The African continent remains the last economic frontier with significant economic potential. However, challenges hinder investments. Fragmentation of markets, regulatory and compliance hurdles, lack of security of investments, scale inhibitions, legal and fiscal complications, long maturity cycles and paucity of exit of capital investments inter alia result in private sector investments not prioritizing if not shying away from African markets.

Nevertheless, opportunities lie in challenges. Legacy free Africa has the opportunity to leapfrog in the digital services segments as a result of the increasing penetration of the internet and smart devices.

Likewise, Africa has embraced the rapid digitalization of brokerage and gaming services with more and more digital payments channels.

Likewise, Latin America offers emerging markets growth potential.

Similarly, ASEAN countries (Indonesia, Philippines, Malaysia, Singapore and Thailand) represent an emerging if not maturing opportunity for Western brokerage, gaming and payment service providers for diversifying their revenue geographies.

The opportunities are in the sectors of brokerage, gaming and payment service providers (e/m payment gateways). All the three segments are under serious costs and regulatory pressures. Therefore, costs optimization rank very high priority for operators and a reputed regulatory umbrella provides confidence for customers.

The opportunity for the Mauritius IFC constitute digital platforms, regulatory set-up, technology and business operations for SPVs for cross-border payments, brokerage and gaming activities. The Mauritius IFC offers unique value proposition and sustainable competitive advantage in the B2B and B2B2B2C services in the digital and financial technologies and fintech platforms and B2B Software as a Service (SAAS) segments within the cross-border payments, brokerage and gaming value chain. The need for localization does not make the Mauritius IFC suitable for B2C business in regulated industries.

The Mauritius IFC has created specific licenses for specific SPVs for cross-border payments, brokerage and gaming activities.

  • Payment Intermediary Service License
  • Investment Dealer License

Moreover, in most cases, the GBL license becomes useful and for larger enterprises, the global treasury activities licenses can be quite attractive.

Regulator

The Financial Services Commission of Mauritius

Enabling laws

Section14 of the Financial Services Act 2007

Key business plan points

  • Introduction and Background.
  • Business objective, strategy and proposed activity.
  • Organisation Chart.
  • Target market(s) and client(s) profile.
  • Mode(s) of financing.
  • Three year Financial Forecasts (Balance Sheet, Profit and Loss Account, and Cash Flow Statement).

Key prudential points

  • Details of the arrangements to be put in place with respect to the day-to-day administration and management.
  • Details of a manual of internal control and compliance procedures.
  • Copy of material contract(s)/agreement(s) to be entered between the Applicant and other party/functionary.
  • Details of arrangements to ensure confidentiality, security and reliability of client(s) information.
  • Copy of any promotional material(s) to be used in connection with the proposed business of the Applicant.
  • Details of an effective complaints handling process in the course of conduct of its business.

Key prudential points

  • Details of the arrangements to be put in place with respect to the day-to-day administration and management.
  • Details of a manual of internal control and compliance procedures.
  • Copy of material contract(s)/agreement(s) to be entered between the Applicant and other party/functionary.
  • Details of arrangements to ensure confidentiality, security and reliability of client(s) information.
  • Copy of any promotional material(s) to be used in connection with the proposed business of the Applicant.
  • Details of an effective complaints handling process in the course of conduct of its business.

Minimum Capital Requirements

Rs.2.0M

Corporate Annual Income Tax

15% except where reduced subject to application to the MRA, in the case of an Innovation Box Regime, the taxation rate will be zero.

Statutory Fees

  • One-Off Processing fees to the FSC: US$ 1,000
  • Annual Licensing Fees to the FSC: US$ 1,500
  • Annual registration fees to the CBRD: US$ 275

A newly set-up company involved in innovation-driven activities benefits from a tax holiday of 8 years on income derived from its intellectual property assets developed in Mauritius.

Existing companies will, henceforth, benefit from the 8-year income tax holiday on income derived from intellectual property assets developed in Mauritius after 10th June 2019.

In order to benefit from the income tax holiday, companies will have to satisfy pre-defined substantial activities requirement in compliance with the Base Erosion and Profit Shifting (BEPS) Action 5 report.

A 5-year tax holiday will be introduced for a company setting up an e-commerce platform provided the company is incorporated in Mauritius before 30th June 2025. The Economic Development Board Act will be amended to allow for the issuance of e-Commerce Scheme Certificate.

Interest income received by an individual from Peer-to-Peer lending will be subject to income tax at the rate of 3%.

Any bad debt and fees payable to the Peer-to-Peer operator will be deductible from the taxable interest income.

No tax deduction at source will be applied to Peer-to-Peer interest income.

A 5-year tax holiday will be granted to a Peer-to-Peer lending operator provided the company starts its operation prior to 31st December 2020.

 

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