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Challenges and Opportunities for Mauritius as an International Financial Centre: A Strategic Perspective by Nathaniel Tsang Mang Kin, Head of Financial Operations at Stewards Investment Capital

  1. In its 30 years of existence, Mauritius has established itself as an international financial center of renown and substance. How can this momentum be maintained in the face of competition?

Over the past 30 years, Mauritius, as an "IFC", has taken a great leap forward in building something from nothing. But now it's time to muster our energy to make another leap into the future.

In marketing, there's a concept called the "middle ground trap". The essence of the concept is that it's often advantageous to position your product or service as high-end (premium) or low-end (mass market), but always avoid being in the middle ground where you could face intensified competition and struggle to differentiate effectively. This is exactly the state of Mauritius as an international financial center today.


We are neither Delaware, which excels in providing low-end, efficient corporate services, nor Singapore, which has successfully positioned itself as a high-end jurisdiction by offering a solid legal framework and advanced financial services. And we're neither Gibraltar nor Curacao, which have specialized for years in the gaming industry, nor Dubai, which has spent the last 3 years wooing investors and entrepreneurs in digital assets. We're stuck in the middle.


Although we are reputable enough to retain most of the companies that have chosen us as their "IFC" of choice, we have not been able to attract new clients in any significant way. This can be seen from the number of global business companies authorized by the FSC. This number has been declining year on year since the renegotiation of the Mauritius-India DTA in 2019.


To survive and prosper, Mauritius must choose and adopt a business strategy. Whether it's mass offerings, high-end services or specialized regulatory frameworks, we can do it and forge a future for ourselves, under the right leadership.


2. Innovation is essential if we are to offer sophisticated products and services to investors. In this respect, is Mauritius at the forefront of new global trends, or does it still have a long way to go?

In the financial services sector, what we can offer in the way of products or services is limited by the ability of regulators to implement and publish appropriate guidelines. And as a country with limited resources, keeping abreast of the latest changes and innovations in the world is a Sisyphean task.

My personal view is that Mauritius, as a financial sector, needs to focus first on modernizing its civil and banking infrastructure, rather than trying to find the next shiny thing. These two components are the building blocks of the financial sector, and simply focusing on updating them increases our overall efficiency and attractiveness tenfold.


Privacy rhetoric aside, imagine if we were to set up a single centralized biometric database for every resident of Mauritius, whether national or foreign. With such a tool, anyone could open businesses, bank accounts or subscribe to utilities or services in seconds, without the need for paperwork and administration. This is already common practice in some countries.

In Europe and the United States, all banks are subject to "open banking". This means that any authorized third party is allowed to log on to the bank to read account transaction details or carry out a transaction on behalf of the customer. In Mauritius, bank reconciliation is a full-time job for accountants, but in the European Union and the USA, it's the accounting software that extracts bank transactions from the bank programmatically.

We need to stop chasing buzzwords and focus on implementing a solid core infrastructure. We need more technocrats and fewer bureaucrats to run the financial sector.


3. In which emerging markets should Mauritius be more assertive?

Sub-Saharan Africa, South Asia and Southeast Asia. All the growth and greatest opportunities over the next 50 years will occur mainly in these three main regions.


20 years ago, China opened its university doors in Mauritius and thousands of young, enthusiastic dreamers made the leap. Now, when I look at the new generation of entrepreneurs in Mauritius, I see many Mauritians who studied in China. They've learned the culture, built the know-how and relationships to access the world's factory, and built real enterprises and businesses in Mauritius that strengthen the relationship between Mauritius and China far more than intergovernmental agreements.


Establishing a tangible presence and business relationships in these emerging markets won't happen through ribbon-cuttings and black-tie cocktails. It's a long-term strategy that can only be won by establishing a long-term emissary program in these markets.


4. What is your assessment of the efforts of both the government and private institutions to make the International Financial Centre a preferred destination for cross-border investment in Africa? 


I think the government has been very proactive on this front and has been very effective in ensuring that this remains a national priority. This is because most foreign investment in Africa comes from Chinese state-owned enterprises, and diplomacy trumps economic incentives on this issue.

However, I think Mauritius should reconsider its position on China's Belt and Road initiative. With the stroke of a pen, we could control all Chinese investment in Africa and the Middle East, not just sub-Saharan Africa.



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