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In the global race for innovation, the island economy of Mauritius has taken a significant stride by introducing new permit rules that allow it to attract investment into technology and innovation. 

To enumerate just a few aspects of the latest Finance Act that encourage innovator investors to call the paradise island home: 

• The minimum turnover and investment requirement to obtain an Innovator Occupation Permit (OP) are being removed;
• The duration of an OP is being extended from the previous 3 years to 10 years* to give greater visibility to investors on their future prospects; and
• The application process is being simplified with the Economic Development Board (EDB) of Mauritius being the only agency responsible to determine and recommend applications for the OP.

How Mauritius facilitates investment in innovation

As the strategic planning entity and arm of the Government of Mauritius to boost investment in the economy, the EDB’s Head of Financial Services, Faraz Rojid, explained how they fast track investment projects with a view to transforming Mauritius into a hub for innovation.

He emphasised, “The EDB recommends investment projects facing bottlenecks to a fast track committee chaired by the Hon. Prime Minister, Mr Pravind Kumar Jugnauth. Our vision is to make Mauritius an innovation-driven International Financial Centre (IFC), and offer a well-regulated as well as transparent platform.”

For his part, Samade Jhummun, CEO of the leading body for the financial services sector, Global Finance Mauritius (GFM), noted that successive Budget announcements are generating a lot of investment interest with “new licenses available in areas such as Global Headquartering, Global Treasury Management, Overseas Family Offices, Wealth Management (recently announced) and Peer-to-Peer (P2P) lending, with e-commerce also seeing rising interest.” 

From the perspective of the financial services sector, these are all areas and activities that are ripe for innovation and represent a huge window of opportunity for Mauritius to position itself at the crossroads of financial services and technological innovation – as COVID-19 accelerates the case for the provision of FinTech services across the world.

FinTech investors face opportunities and challenges 

Michal Szymanski, CEO of the Mauritius Africa FinTech Hub (MAFH), noted that there are some opportunities and challenges alike in championing the case of investment in Mauritius as a FinTech hub for Africa. 

He noted that Mauritius offers a great launch pad for FinTech firms coming to the jurisdiction as a market to grow into with “big names having come here looking to be domiciled on the island whose conducive economic environment and political stability has inspired them to set up operations here first before expanding into the African continent.”

Michal also reflected on COVID-19 as having come at a significant period in the innovation timeline of the island economy, where, from a FinTech and economic digitisation perspective, “we are seeing a massive acceleration and there are huge opportunities. The FinTech space has evolved a lot in a short span of time because people are increasingly seeing cash as old fashioned and fast realising that it is time for digitisation.”

From an investor’s perspective, Michal remarked that Mauritius “offers a great environment to build proof of concepts (POCs) and minimum viable prototypes (MVPs) for the local market and then scale them into Africa.”

Into Africa

The FinTech sector was set to grow from USD 200 million in 2017 to US$3 billion by 2020 in Sub-Saharan Africa alone. Whilst the pandemic may impact that projection, armed with an understanding of the enormous potential that Africa offers, Mauritius stands to gain much by positioning itself as the FinTech hub for the booming continent.

With improvements in the scope and application of the innovator investor permit, supplemented by the recent publication of innovation-friendly regulation such as Peer-to-Peer (P2P) lending rules and the guidance on Security Token Trading Systems by the Financial Services Commission – supplemented by the existing Regulatory Sandbox Licence (RSL) regime of the EDB – it appears that Mauritius is well poised to take advantage of growing FinTech opportunities bound for Africa, especially in a post-COVID world.

*Barring an OP for professionals since these are contract bound and determined by the duration of the contract itself