Tribulations of an Investor in Mauritius

This article was published in the News of Sunday edition of 12 October 2018. Some of the readers have requested an online version, so here it is. Enjoy the read and send your comments and questions.

By constantly repeating that Mauritius is world hub (for different sectors), many officers and key players seem to have been seduced by their own words. Thinking that this island is the center of the world and that people are racing to come and live here is a mistake. It serves no purpose to do road shows or participate in international salons if authorities maintain their pretentious attitude towards those who finally land here with a view to investing or electing domicile. The abusive use of words such as ‘hub’, ‘centre of excellence’, ‘world class’ should stop until we realize that we have not reached that point yet and that a constant effort is needed, by all parties, private or public.

The first point that authorities dealing with foreign investment and expertise should grasp well is that local professionals are not their competitors but their team players on a global scale, The idea of attracting FDI is first and foremost the creation of wealth through business, employment and economic dynamism in general. At the very base, it somehow means providing business to local professionals. But then, how do we interpret the message when a government website clearly discourages foreign investors from using local consultants? It just demonstrates that some do not really understand the game.

The foreign investor who chooses Mauritius as a business destination is very often (and very soon) confronted to a different reality. There are so many reasons that leads him to frustration and discouragement. Many have abandoned their projects and left the country with a very sour after-taste.

The first obstacle are institutions which have been entrusted with the duty to ‘facilitate’ foreign investment. Many of their officers visibly do not understand the basic strategy and objective of attracting foreign capital and expertise. The investor finds himself sitting in an interrogatory position, with questions from officers who do not understand the fundamentals of business. How do you react when asked to decline the identity of your shareholders when you are in a self-employed activity. By definition, a self-employed does not have a company, he is himself the business. The poor person attempted to answer, but faced an overly pretentious attitude from the officer. There are cases where officers do not understand the scope of intervention of their institution. Companies are requested to ‘amend their shareholding structures’ by an authority having no jurisdiction whatsoever on the business operated by those companies. A knife under the throat, with a clear deadline imposed. No reasons provided. The authority loses its faculty to reply when legal reference and substance behind their request is questioned.

Another example is those officers claiming to operate ‘under their own style’. They request documents in content and form not listed on official checklists and guidelines. Don’t even think to raise the point to the officer. It may result in a ‘refusal’ letter with no explanation whatsoever.

There are different authorities that act in an opposite manner to what is prophesied by the government. The officers believe they hold the key to the island and it increasingly feels that some derive a sadistic pleasure in turning down business applications from foreigners. There will be progress at this level once we understand that Mauritius is in fact in the middle of nowhere, we are not a buzzing metropolis (we are still struggling to have a metro line). We have a limited market, limited infrastructure and limited resources. We still need to realize our ambitions, but we are not there yet.

Unfortunately, the problem lies not only with the authorities. Some major private players also seem to have lost the plot. Banks. Average onboarding procedures takes between 4 to 6 weeks for a business bank account, Maximum number of days a foreigner can spend on the island under business visa is 120 days. Bank account opening is an opaque procedure where feedback seldom circulates back to the applicant. Often it is a one-way (and very frustrating) process where during several weeks the applicant is called to provide ‘additional documents’ in the form and content imposed by the bank officer – but no feedback is provided from the bank.

Within the 120 an investor must register his company, open the bank account, transfer his funds and only then is he able apply for residency permits. Mission impossible. No one seem to understand the risks that the investor bears while investing in a foreign land. He barely has the time to evaluate all the aspects of his project; local competence, available workforce mass, technical & financial feasibility, market and so on. On expiry of the 120 days, there is no other choice than to leave the country and return next year. No one seem to understand this challenge, this race against time. Yet we are all shouting on our roofs that Mauritius is a business place and we feel utterly satisfied.

The tribulations of an investor choosing Mauritius for his projects are many. It would require probably a 200 page to contain everything but still, it all stems up from the wrong attitude Mauritian players have adopted and are still maintaining. No crowd is racing to our island, this is reality. Of course, we cannot afford to leave our doors wide open – but then we owe the duty to communicate our objectives in a clear and concise manner. Once for all procedures should be defined and a coherence maintained, both in the administration and in the mindset of administrators.