Mauritius keen to set up shop in GIFT City

livemint.com:

Mumbai: Seven years after losing the tax edge that had made it India's second-biggest source of capital, Mauritius is eyeing a comeback, this time through the GIFT City route. The island nation's International Financial Centre (IFC) is considering opening an office in Gujarat International Finance Tec-City (GIFT City), a top Mauritius minister said. A large Mauritius delegation currently visiting India will meet officials of the International Financial Services Centres Authority (IFSCA) to discuss areas of collaboration, including equivalence between the two.

This would mean easier compliance and tax norms for GIFT City-based entities operating in Mauritius. “It will be a win-win situation. This is the type of relationship we want to establish with GIFT City," said Soomilduth Bholah, the African nation's minister for financial services and good governance, who is leading the delegation on his second India visit this year.

A collaboration could help entities in the two jurisdictions to move capital between them easily. A key objective of the GIFT City collaboration is to attract capital from India to Africa, Bholah said. The island nation also wants to attract services like financing of immovable assets in Africa, intellectual property management and reinsurance from India.

The new business avenues are intended to compensate for the loss of direct investment from Mauritius to India. In 2017, India and Mauritius dropped a tax provision that exempted Mauritius-based entities from capital gains taxes in India. Around the same time, New Delhi also introduced General Anti-Avoidance Rules that compelled investors to show why they situated themselves in beneficial tax jurisdictions like Mauritius besides the tax benefit.