Mauritius Board of Investment: Make Mauritius a Home for Business - Raju Jaddoo
Mauritius is known for its sugar cane industry and as an idyllic holiday destination. For international businesses, however, Raju Jaddoo, MD of The Mauritius Board of Investment, tells CEO that the country offers so much more.
The world is a competitive marketplace for international investment and offshored outsourcing work. Any country wishing to take a seat at the table must make a concerted effort to carve out a competitive advantage. Until now, countries with the lowest labour costs – and sufficient infrastructure – have sucked in funds. However, as international companies look more for value rather than just cost reduction, countries like Mauritius can compete in certain markets against big players like India and China.
‘Mauritius has always been known as an investment destination. It is not a market that opened up recently, like countries in the Middle East or Africa. The erosion of the sugar industry was a shock, so we look at how to do business in the future – domestically and internationally,’ says Raju Jaddoo, managing director of The Mauritius Board of Investment.
‘We must make Mauritius an easy place to invest.’ The Mauritius Board of Investment’s goal is to make the country a competitive platform for global businesses and attracting international investment and new talent by improving the investment climate and encouraging innovation.
Specific initiatives have worked well. Income tax and corporate tax are now 15% – the lowest rates ever in Mauritius. Dividends are tax-free, and there is no capital gains tax. The process of starting up a new business takes a matter of hours. ‘There is plenty of access to talent. We have made it easy for investors and self-employed people, who can get a three-year residential and work permit after three days. After three years they can get permanent residence.
Since the start of that scheme in 2006 we have seen lots of international companies move people here,’ Jaddoo remarks. The strategy is certainly working. The International Monetary Fund and the World Bank rank Mauritius as the number one place in Africa in terms of the ease of doing business.
Mauritius is developing many industries. The cane industry is turning towards power generation through biofuels, and sugar refining is replacing raw export. Property management and tourism are booming, while manufacturing is recovering through textiles. The financial sector – closely linked to the IT sector – now benefits from a new securities act and efforts to bring in more work in Islamic finance.
'We are making the economy resistant to external economic shocks,’ explains Jaddoo. ‘In the last two years there has been more foreign direct investment than we have seen in the last two decades. We have reinvented ourselves.’
Outsourcing, including BPO, started relatively recently in Mauritius but is growing strongly. The 3,000 employees in the outsourcing sector three years ago have swelled in number to reach 10,000, focused on high-value rather than large-scale deals. ‘It is a bi-lingual country, and we have trade links with Europe, India and the US, so we are able to export services as well as goods.
It is unrealistic for us to export services in domains where companies need large numbers of people at low-cost. We have a small labour pool of highly qualified people with specialist knowledge.’ Accenture, Infosys, SAP and Oracle are already active in Mauritius, mainly for finance and accounting work. ‘If we create partnerships to leverage these major players then we can tap into new sectors. The government has an empowerment programme to train people already in the outsourcing sector, and we have a large pool of finance graduates,’ says Jaddoo.
The new sectors include knowledge process outsourcing, especially in the legal sector. ‘We have the open-minded, hospitable, service-orientated culture that suits the needs of international companies,’ explains Jaddoo, who has every reason to be optimistic about his country’s prospects in the international business world.