TrustQore’s Sebastien Flak explores the intriguing possibilities for inward investment into the African market. He sets out why using fund structures, rather than traditional company setups, can be a more innovative approach.
A December 2024 EY study showed that foreign direct investment (FDI) in Africa continues to demonstrate significant resilience and growth particularly in the renewable energy, food and beverage and business services sectors. In its latest Africa Attractiveness Report, EY Global highlights key regions of interest being North and West Africa along with countries such as Egypt, South Africa and Nigeria, all of which demonstrate “strong investment appeal.” FDI in 2023 reached US$164bn, generating over 200,000 jobs.
Mauritius, with a population of 1.3 million, and itself of course an African country, offers an ideal gateway to Africa. Its strategic location in the Indian Ocean, solid infrastructure, and a multilingual, highly educated workforce make it an appealing base for international businesses seeking access to the African market. It should come as no surprise therefore that it is increasingly used as a bridge to the continent.
While the UN recognises fifty-four countries in Africa, they are not all equally stable or business friendly. Some nations, however, particularly English-speaking countries like Kenya, Tanzania, and Rwanda, along with francophone nations in West Africa, offer sustainable, responsible business opportunities.
Mauritius has long been a hub for international businesses, benefiting from robust double tax treaties and a favourable tax regime. According to the Mauritius Revenue Authority, close to fifty treaties are in force (more than a dozen with African states) with still more under negotiation. A detailed full list may be found at their website www.mra.mu.
Mauritius has a solid regulatory framework that complies with international standards on anti-money laundering, counter-terrorism financing, and criminal activity. Expect to see world class regulatory standards in Mauritius all the while accompanied by a refreshing “can do” attitude amongst its practitioners, banks and regulators.
An increasingly popular tool for investment into Africa, in addition to GBL-type companies, is the use of licensed Mauritius-based fund structures. TrustQore’s fund solutions offer a seasoned cost-effective access to African markets, supported by Mauritius’ strong regulatory framework and a business-friendly environment.
Sebastien Flak explains that, while countries including Cayman, Luxembourg, or Singapore may come immediately to mind when considering such investment structures, Mauritius offers distinct advantages. Fund vehicles provide a regulatory environment, a certain flexibility, including diversification & risk mitigation, and the opportunity for multiple investor classes or joint ventures with local African partners. He says that the options are endless and that funds may be structured in a bespoke fashion depending on several factors. These include the number of investors; the nature and location of the investment being considered and desired future exit routes.
Furthermore, banking such structures in Mauritius are more straightforward than in other jurisdictions, as the country boasts a network of local and international institutions who are familiar with most countries in Africa. TrustQore works with a network of these local and international banks, ensuring easier banking solutions for businesses.
TrustQore employs close to one hundred people in Mauritius making it the largest office in its network. Possessing a deep knowledge of African markets, the team offers valuable on-the-ground assistance. Based in Geneva and willing to travel to meet clients and their advisers across Europe, Sebastien is well-placed to advise on fund structuring options or, of course, traditional company arrangements for clients exploring market entry into Africa.
In future articles, Sebastien and his colleagues will explore fund structures in more detail. In the meantime, feel free to contact him for an initial, no-obligation discussion on leveraging Mauritius for business growth in Africa. As he says, no one client is the same as the next and the possibilities are both endless, and hugely exciting.
Sebastien Flak at [email protected]