Mauritius

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Mauritius

New Delhi. Mauritius, a small country in the lap of the Indian Ocean with a population of 1.2 million, is affecting the entire Indian economy today. This country has a deep connection with India in the 18th century due to Indian laborers who went to Mauritius for sugarcane cultivation. But in the last two decades, Mauritius has emerged as the largest FDI country in India. Prime Minister Narendra Modi is on a two-day visit to Mauritius, looking at India’s cultural affiliation and business importance with Mauritius.
All companies invest money in India through Mauritius route and avail tax exemption. The tax treaty with Mauritius is becoming a problem for the Indian government, which is facing the challenge of curbing black money. What is Mauritius route and how 35% FDI of India is coming through Mauritius-
Old Business Relations, Flexible Laws
Dominated by Dutch, French and British traders since the 17th century, Mauritius has developed itself as an economic zone since independence in 1968. The people of Mauritius on the sea route between the western and the eastern world also helped in this. Half of the population here is of Indian origin, due to which business relations with India have been strong. Especially for Indian companies and entrepreneurs, it is quite easy to start a company there, open an office and invest in the rest of the world from there. Many companies of India and abroad have taken advantage of this.
Double Taxation Avoidance Treaty (DTAA)
Mauritius has entered into an agreement with India to protect investors from double taxation, which makes Mauritius even more special in the eyes of investors. Under this agreement, companies filing tax in Mauritius get several types of income tax exemption under Section 90 of the Income Tax Act of India, 1961. India has entered into such agreements with 88 countries but Mauritius took the most advantage of it. There have also been allegations of money laundering in Mauritius under the guise of this exemption. That is why Prime Minister Narendra Modi, who visited Mauritius, has raised the issue of change in double taxation avoidance treaty prominently.
12 lakh population and 4 lakh crore FDI
It is a result of the flexible financial laws of Mauritius and the treaty with India that 35% FDI in India comes through Mauritius. This country with a population of only 12 lakhs has made a total foreign direct investment of Rs 4.06 lakh crore in India during April 2000 to December 2014. In the financial year 2014-15, FDI of about 35 thousand crores has come during April-December. This is evidence of how a small country has become a financial hub due to its simple laws and concessions given to investors.
8 out of 10 companies that bring maximum FDI registered in Mauritius
It is a marvel of Mauritius route’s popularity among investors that 8 out of 10 companies that bring in the most FDI in India are registered in Mauritius. These companies are as follows:
1. TMI Mauritius Limited
2. Cairn UK Holding
3. Oracle Global Mauritius Limited
4. Vodafone Mauritius Limited
5. Etisalat Mauritius Limited
6. CMP Asia Limited
7. Merrill Lynch Mauritius Limited
8. Mauritius company investing in Dabhol Power Limited

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