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INTRODUCTION


Welcome to Adansonia’s second Izindaba for 2019. We hope that you will find the articles contained in the newsletter of interest.


In this edition:


  • Mauritius announces 2019/20 Budget;
  • Mauritius 2020 GDP growth forecast to reach 4.1%;
  • 8th Annual Adansonia CycleTourIleMaurice 2019 – Start thinking about next year…..;
  • Adansonia Roadshow - “Mauritius – Changing Gears to suit a challenging Dynamic Global Investment Landscape”;
  • Adansonia Management Services Limited Invests in a new Fund Administration Platform;
  • Emerging Markets Private Equity Association Global Private Equity Conference in Washington D.C. – Standout Topics;
  • New Kenya-Mauritius Double Tax Agreement Signed; and
  • Mauritian Regulatory and Statutory Updates

Please feel free to forward this newsletter onto anyone who may find it interesting, visit our website www.adansoniaholdings.com for more information on our services, and any comments can be directed to Brendon.jones@adansoniaholdings.com.

MAURITIUS ANNOUNCES 2019/20 BUDGET:


On the 10th of June 2019, the Hon. Pravind Kumar Jugnauth Minister of Finance and Economic Development delivered his budget speech for 2019/2020.


The presented budget, titled ‘Embracing a brighter future together as a Nation’, is aimed at leading Mauritius into the future as Africa’s first high-income country. A key factor in driving the Mauritian economy to new heights will be to aid the increase in purchasing power of Mauritian citizens along with attracting more foreign capital to the country’s thriving financial services sector.


The country’s Global Business and Fiscal regimes have remained relatively unchanged except for slight changes to the Partial Exemption tax regime and the introduction of new rules on Controlled Foreign Companies and Transfer Pricing. These rules will be finalised and published during the year.


For more on the new budget, you can find a link to our Budget Brief below:


https://adansoniaholdings.com/reports/2019/MauritiusBudget2019.html


For the full budget speech, click on the link below:


http://budget.mof.govmu.org/budget2019-20/2019_20budgetspeech.pdf



MAURITIUS UNDERTAKES TO PROMOTE THE REGION TO THE WORLD IN EFFORT TO ENSURE FUTURE AS A SUSTAINABLE INTERNATIONAL FINANCIAL CENTRE (“IFC”) OF SUBSTANCE:


The Economic Development Board of Mauritius (“EDB”) has recently announced a new initiative that will aim to promote the Mauritian Global Business sector to the world. The initiative will raise awareness of the advantages and opportunities that the Mauritius IFC offers, specifically, as the ideal investment platform for Africa thanks to its vast range of Double Taxation Agreements and proximity to the continent. The EDB has also enlisted the services of a recognized global Public Relations firm in their efforts to promote the region’s world-class business environment and fully compliant fiscal regime.


This initiative follows the announcement that a dedicated special Delivery Unit will be formed to help guide the Mauritius IFC in its effort to implement the Mauritius IFC Blueprint 2030, aiming to double the size of the financial sector by the year 2030.


MAURITIUS 2020 GDP GROWTH FORECAST TO REACH 4.1%:


With the Mauritian GDP expected to grow by 3.9% this year according to the International Monetary Fund, Mauritian Finance Minister, Hon. Pravind Kumar Jugnauth, has announced that the nation is expected to grow by 4.1% in 2020.


The country’s unemployment rate is also at the lowest in the last decade of 6.9% with inflation also considerably down over recent years, currently at 1.5%.


Below is a link to the Government’s statement on the economic outlook of Mauritius:


http://www.govmu.org/English/News/Pages/Budget-2019-2020-Embracing-a-Brighter-Future-together-as-a-Nation.aspx


8TH ANNUAL ADANSONIA CYCLETOURILEMAURICE 2019 – START THINKING ABOUT NEXT YEAR….:


This year’s annual round the island cycle tour concluded on the 10th of June and what a tour it was. 27 riders took part in the event which also saw the introduction of the Novare SA Terroir Wine Awards wine tasting event, which saw riders and guests sample 18 previous National Winners of this prestigious award. Our thanks go out to Christo Pienaar (Nuy Winery) and Boela Gerber (Groot Constantia), two of South Africa’s esteemed wine makers who hosted the event (and rode the tour).


Next year we will be hosting the 9th Annual Tour, so be sure to book your spot. Thank you to everyone that joined us to make this wonderful experience even more special. Below is the link the Adansonia facebook page which has some of the photos of the tour


https://www.facebook.com/adansoniaholdings/


ADANSONIA SOUTH AFRICA ROADSHOW – 25TH (DURBAN), 26TH (JOHANNESBURG) AND 29TH (CAPE TOWN) JULY 2019:


“Mauritius – Changing Gears to suit a challenging Dynamic Global Investment Landscape”, will be the theme of a practical 2 hour workshop to be held in Durban, Johannesburg and Cape Town. The workshops are aimed at providing an overview of the changes to the Mauritius offshore environment, some of the impact of using Mauritius as a result of recently introduced South African tax law changes and an update on the legalities of using Mauritius.


If you wish to attend, please contact Brendon Jones (Brendon.jones@adansoniaholdings.com); before the 19th July 2019 as spaces are limited due to venue size.


https://adansoniaholdings.com/invites/2019/Road_Show_Durban_Invite_25_July_2019.pdf


https://adansoniaholdings.com/invites/2019/Road_Show_Johannesburg_Invite_26_July_2019.pdf


https://adansoniaholdings.com/invites/2019/Road_Show_Cape_Town_Invite_29_July_2019.pdf


ADANSONIA MANAGEMENT SERVICES LIMITED INVESTS IN FUND ADMINISTRATION CAPABILITIES:


In our ongoing endeavour to maintain the highest possible standards, we have recently implemented new systems to improve our fund administration capabilities. Even though the most important aspect of any service is the people delivering the service, it is technology that allows us to take service levels even higher.


We have implemented a new, leading administration system Vantage (www.vantage-software.com) that allows us to provide clients with faster and more efficient levels of service and accuracy. From reporting to managing capital calls, the implementation of this new system will be a step forward for both us and our clients.


For more on our new and improved offering, please contact Managing Director, Zain Madarun, at zain.madarun@adansoniamanagement.com.


EMERGING MARKETS PRIVATE EQUITY ASSOCIATION GLOBAL PRIVATE EQUITY CONFERENCE IN WASHINGTON D.C. – STANDOUT TOPICS:


This past May, the leading minds and players in the world of Emerging Market Private Equity came together in Washington, D.C. to discuss the future of private capital in the developing world. Key themes discussed at this year’s event centred on not only the focus on creating value for Limited Partners and General Partners, but also the impact and importance of private capital in Emerging Markets. With Governments struggling to cover all the bases in terms of socio-economic growth and sustainability, Private Equity could prove the saviour of regions like Africa.


While a broad spectrum of topics were discussed at the conference, here are some of the key topics from the conference:

  • New approaches to long-term investing in Africa:

A panel consisting of seasoned veteran investors from CDC Group, The Carlyle Group, Old Mutual Alternative Investments and more delved into some of the key takeaways from the past investment cycle. They referred to what can be seen as ’impatient capital’. Investors should focus on creating and adding value to portfolio companies as soon as possible to ensure that fund terms are met. The discussion also focused on the inherent impact that creating value as an investor has in a continent like Africa in terms of jobs and skills creation.

  • The Potential of Private Credit:

Another key topic discussed at this year’s conference was the emergence of Private Credit as a viable strategy in Africa and other Emerging Markets. Based on a report released by EMPEA titled ‘Private Credit Solutions: A Closer Look at the Opportunity in Emerging Markets’, three main benefits for investors can be higher returns, lower leverage, and greater downside protection.


This strategy will also see growth in emerging markets due to the limitation of equity dilution. In terms of Africa, the mezzanine and senior debt sectors will specifically see growth opportunities as financial institutions are unwilling to expose themselves too much to the sector whilst the managing of risk is also becoming more manageable.

  • Fund and Co-Investment Terms and Conditions:

Another key topic was the approach of funds investing into Africa regarding the evolution of fund structures and capital vehicles. It was noted by members of the panel that funds should actively focus on addressing the needs like co-investment rights and to have direct stakes in portfolio companies. The panel also discussed the benefits and difficulties of including Development Finance Institutions in co-investment and the importance of aligning the interests and mandates of these institutions with the requirements set out by normal Limited Partners.


Below is a link to a summary of the topics discussed at the conference:


https://www.globalpeconference.com/2019gpecreview/


NEW KENYA-MAURITIUS DOUBLE TAX AGREEMENT SIGNED:


Following the recent annulment of the Double Tax Agreement between Kenya and Mauritius in the first quarter, a new agreement was signed between the two nations during Kenyan President Kenyatta Uhuru’s visit to Port Louis on the 10th of April 2019.


The Double Tax Agreement was one of six agreements signed by the Kenyan President and Prime Minister of Mauritius, Hon. Pravind Jugnauth, however, the exact details of the treaty are yet to be made public.


For more information on the new treaty, link on the below link:


https://mnetax.com/kenya-and-mauritius-sign-new-tax-treaty-following-court-nullification-of-earlier-agreement-33414


MAURITIAN REGULATORY AND STATUTORY UPDATES:

  • Amendments to the Financial Services (Consolidated Licensing and Fees) Rules 2008

The Financial Services Commission (‘FSC’) proceeded with a review of annual fees applicable to licencees. We prepared a summary of the amendments applicable to our clients and circulated same on 19 June 2019. You can access a copy of the communique by clicking on this link.

  • FATCA & CRS Reporting

The reporting deadline for FATCA & CRS reporting is 31 July 2019. In case of any change in your tax residence, we request you to inform the concerned administrator in a prompt manner if you are related to any reportable entity.