Kee Chong Li Kwong Wing, Group CEO of Mauritius International Trust Company Ltd (MITCO), spoke to AfricaMoney on how the island economy took the bold step, against IMF advice, to venture into offshore business, and hasn’t looked back since. Our economic expert also noted that 2014 will be a challenging year for MITCO as the global business major is establishing its presence in key jurisdictions such as Singapore, Hong Kong and Luxembourg, and faces a highly competitive global business industry.

Please comment on some milestones of Mauritius International Trust Company Ltd (MITCO) that you feel have contributed to its dominance in leading management companies for International Tax and Global Estate Planning.

MITCO is one of the first management companies to be licensed by the Financial Services Commission in 1993 to operate in the global business sector in Mauritius. We celebrated our 20th anniversary last year and today, I can proudly say that MITCO is one of the leading service providers in the sector.

It all started back in the 80’s when Mauritius took the bold step against IMF advice to venture into offshore business. The Mauritius Offshore Business Activities Act establishing the legal framework for offshore in Mauritius was finally enacted in late 1992. As former Advisor to the Minister of Finance and Chairman of the Stock Exchange Commission who worked actively in developing the financial services as a new pillar of development, I was totally convinced of the future of the sector. Thus, I decided to set up a management company with professional tax advisers in 1993.

However, I soon realized that MITCO needed an international strategic partner with the experience and international network of offices to compete effectively with other jurisdictions. In 1995, our professional firm tied up with Asiaciti Trust Group and MacIntyreStrater International. Through that network, MITCO forged strategic alliances with service providers in other prime International Financial Centres (IFCs) such as Hong Kong, Singapore, Dubai, Cyprus, Channel Islands, Luxembourg and Switzerland and built up capabilities to serve clients  in the fields of tax treaty planning, global wealth structuring, asset protection and incorporation in various jurisdictions.

Can you please comment on India’s influence on the global business sector in Mauritius?

The liberalisation of the Indian economy in the 1990s brought a phenomenal surge in FDI and FII in India, boosting the global industry of Mauritius owing to our most favourable double taxation treaty with India. Mauritius became the largest investor in India and MITCO rapidly expanded its portfolio of international clients seeking to invest into India through Mauritius.

By 2010, MITCO became a member of the Ciel Group which is one of the leading industrial and investment conglomerates in Mauritius and listed on the Stock Exchange of Mauritius. Ciel Group has operations in a number of African and Asian countries in five sectors namely Agro-Industry and Property, Financial Services, Textile, Hotel & Resorts and Healthcare.

During the past year the financial services cluster of the Group was regrouped into a new holding structure named CIEL Finance, consisting of banking (Bank One), fund management (IPRO), fiduciary and trust services (MITCO), private equity (KIBO) and regional finance (BNI Madagascar).

MITCO now has an outstanding team of multidisciplinary professionals with wide-ranging expertise and solid practical experience in providing value added business advisory services to match the expectations of our international clients, and help them capitalize on opportunities arising anywhere in the world.

What are your expectations from MITCO in 2014?

2014 will be a challenging year for MITCO as we further our international expansion plan after opening an office in the Seychelles and South Africa. Our strategic objective is to expand our product offerings to cope with the demands of sophisticated tax and estate planning requirements of our international corporate and High Net Worth clients. In order to achieve this, MITCO is establishing its presence in key jurisdictions such as Singapore, Hong Kong and Luxembourg. Furthermore, the global business industry has become very competitive but MITCO will continue to focus on its niche markets. Post the September 11 World Trade Center attacks in New York City and the economic meltdown in 2008, the international banking and financial services arena has undergone a drastic sea-change. The international crackdown on money laundering and tax evasion has led to the promulgation of a host of legislations and information exchange agreements. In 2014, there will be further tightening across borders to that effect. For instance, FATCA has become effective as from July this year and more and more countries are discussing about automatic exchange of information. All these external factors will have an impact on the global business industry and business environment within which MITCO operates.

The MITCO Group consists of three professional firms namely Mauritius International Trust Company Limited (MITCO), MITCO Corporate Services Ltd (MCS) and MITCO Limited (MCL) in the Seychelles. Can you please elaborate on the services offered by each?

The rationale behind having the above three professional firms as service providers is to focus on specific client segments and act as an efficient and seamless ‘one-stop shop’ for meeting the needs of international investors.

Mauritius International Trust Company Limited is licensed by the Financial Services Commission of Mauritius to provide services to Global Business Licence Companies, Collective Investment Schemes and to act as corporate trustees for Mauritius trusts.

MITCO Corporate Services Ltd offers secretarial, accounting and tax services to Mauritius domestic companies and societies. It caters for investors who wish to form local companies to carry out business activities in Mauritius.

MITCO Limited is licensed by the Seychelles Financial Services Authority to offer assistance with the setting up of Seychelles international companies and other types of structures.

MITCO provides a range of professional services to private and corporate clients and high net worth individuals and families. What are the main jurisdictions from which your clients hail, and has there been any impact of delayed recovery of the European markets on the trusts business in Mauritius?

Our markets are global and well diversified covering US, Europe, India, China, South East Asia and Sub Saharan Africa. Indeed, the world economic crisis and especially the Euro crisis have had a negative impact on Mauritius and the trust business. However, the emerging markets such as India, China and lately the rising resource-rich Africa have somehow mitigated the impact of the sluggish economic recovery of Europe. Beside the persistence of the economic crisis, the uncertainty surrounding our Double Taxation Agreement with India with the impending coming into force of the General Anti-Avoidance Rules in India in 2017 affected the global business industry in Mauritius and slowed down its growth. Fortunately, we had a vision for diversifying our markets before 2008 by reducing our dependence on India and Europe and by penetrating new markets in Eastern and Southern Africa and Greater China. This is already paying off.

What is the objective behind MITCO being incorporated in Seychelles?

Our decision to establish a presence in the Seychelles in 2009 was primarily driven by our strategy to expand our jurisdictional and product offerings. The objective was not to compete against Mauritius but rather to complement it. Furthermore, our choice for Seychelles was based on its geographical proximity to Mauritius as well as the fact that Seychelles was on the OECD whitelist and was growing as an IFSC at an exponential rate. Besides, Seychelles authorities are known for their pro-active approach to global business and their strategic marketing in emerging countries.

Can you give us your views on how vibrant is the trusts market in Africa, and especially Mauritius?

Africa represents a huge opportunity for Mauritius to consolidate its position as a key International Financial Services Centre and as a gateway to Africa acting as a bridge between Asia and Africa. Moreover, as part of the SADC and COMESA, Mauritius is the logical choice for business people to use as platform for their trading and financial services and also for the new emerging class of High Net Worth individuals as their leading Private Banking and Wealth Management hub in Africa. That said, most of African countries are classified as high risk from a transparency and corruption perspective. Therefore, we have to be prudent in our client selection in order to uphold our reputation as a clean jurisdiction of substance. The authorities have been extremely prudent by adopting best international practices in the laws and regulations to prevent misuse of our jurisdiction. This has resulted in a financial industry that has matured quickly and obtained the status of largely compliant jurisdiction according to the Organization for Economic Cooperation and Development (OECD).

Finally, please let us know your views on the Mauritian economy and the way forward.

Mauritius is making slow progress to transform itself from a low-tech and low-skilled middle income economy into a knowledge-based, services-oriented high income economy driven by technology and innovation. This is going to be an uphill struggle against narrow mindsets, rent-seeking and maladministration. But the bigger the challenge, the greater the rewards!

Edited excerpts from an exclusive interview

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