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INTRODUCTION


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


In this edition:

  • EU updates Blacklist of Non-Cooperative Tax Jurisdictions;
  • Mauritius undertakes to promote the region to the world in effort to ensure its future as a sustainable International Financial Centre of Substance;
  • Mauritius finalizes rules on ground-breaking digital asset custodian licence;
  • Adansonia CycleTour Ile Maurice 2019;
  • Mauritus and Organisation for Economic Co-operation and Development create a Regional Centre of Excellence;
  • Join us at the Emerging Markets Private Equity Association Global Private Equity Conference in Washington D.C.;
  • Private Equity in Africa - Unpacking the Trends;
  • Latest on Kenya-Mauritius Double Tax Agreement; and
  • Warnings against ‘phishing’ scams.

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.

EUROPEAN UNION UPDATES BLACKLIST OF NON-COOPERATIVE TAX JURISDICTIONS:


On the 12th of March 2019, the European Commission issued a press release updating its blacklist of non-cooperative jurisdictions in their continued effort to improve global tax practices and transparency.


The list comprises of jurisdictions that do not meet the European Union’s (“EU’s”) requirements in terms of tax transparency, fair taxation and the Organisation for Economic Cooperation and Development’s anti-Base Erosion & Profit Shifting (“BEPS”) standards.


Before the announcement, the blacklist had comprised of 5 jurisdictions, namely: American Samoa, Guam, Samoa, Trinidad and Tobago, and the US Virgin Islands. The list has now been expanded to include Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Marshall Islands, Oman, United Arab Emirates and Vanuatu. These jurisdictions have been added to the blacklist for not having implemented the commitments they had made to the EU by the agreed deadline.


Mauritius has again proven its total commitment to upholding the highest possible standards of tax good governance and promoting itself as a transparent jurisdiction of substance.


Below is a link to the official EU’s communique issued on 12 March 2019:


https://www.consilium.europa.eu/media/38450/st07441-en19-eu-list-oop.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 FINALIZES RULES REGARDING GROUND-BREAKING DIGITAL ASSET CUSTODIAN LICENCE:


In a world first, the Government of Mauritius has officially introduced a new Digital Asset Custodian Licence after recognizing digital assets as regulated financial instruments. The framework for this new type of licence was developed in consultation with the Organisation for Economic Cooperation and Development (“OECD”).


This step forms part of the jurisdiction’s vision to be recognized as a true Financial Technology Hub, not only for Africa, but globally. After a consultation period in which the wider technology and financial sectors were asked for their input and feedback, the new regulations have been implemented from March 2019. The new category of licence is an exciting addition to the country’s already innovative regulations that include a Regulatory Sandbox Licence (put in place to be able to accommodate lines of business that do not yet have dedicated regulatory controls in place) and, also the recognition of Digital Assets as an official financial instrument.


Below is a link to the official Rules as set out by the Financial Services Commission of Mauritius:


https://www.fscmauritius.org/media/70809/44_fs-_custodian-service.pdf


ADANSONIA CYCLE TOUR ILE MAURICE 2019:


As the first quarter of the year draws to a close, excitement is growing for the fast approaching 8th edition of the Adansonia Cycle Tour Ile Maurice taking place from 6th – 10th June 2019. The tour sees riders circumnavigate the island on mountain bikes following a carefully planned route aimed at showcasing our beautiful island paradise in a truly unique light.


Riders will experience the best the island has to offer with stunning views of Mauritius’ breath-taking coastlines, mountains and forests whilst being able to relax and unwind in some of the very best hotels in the country.


Due to some cancellations, there are 4 spots left for this one-of-a-kind Mauritian adventure so if you would like to join us, just drop a mail to coenraadvdm@adansoniamanagement.com.


Below is a link to our brochure for the ride:


https://adansoniaholdings.com/reports/2019/ADANSONIA_CycleTour_Ile_Maurice_2019.pdf


MAURITIUS AND ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT CREATE MAURITIUS REGIONAL CENTRE OF EXCELLENCE:


On 15th March 2019 the Financial Services Commission (“FSC”) of Mauritius, announced the launch of the FSC Regional Centre of Excellence in collaboration with the Organisation for Economic Cooperation and Development (“OECD”).


The initiative aims to further raise industry standards in terms of good governance and the promotion of Mauritius as a leader of the financial sector in Southern and Eastern Africa. As an integral forward thinking International Financial Centre in Africa, the ongoing improvement of internal risk management, licencing procedures and regional research will not only benefit Mauritius but investment flows in to the whole of Africa.


Below are links to the official speeches made by the Chief Executive and Chairperson of the FSC on launching this initiative:


https://www.fscmauritius.org/media/70840/speech-of-fsc-chief-executive-launching-of-fsc-regional-centre-of-excellence.pdf


https://www.fscmauritius.org/media/70839/speech-of-fsc-chairperson-launching-of-fsc-regional-centre-of-excellence.pdf


JOIN US AT THE EMERGING MARKETS PRIVATE EQUITY ASSOCIATION GLOBAL PRIVATE EQUITY CONFERENCE IN WASHINGTON D.C:


The Emerging Markets Private Equity Association will be hosting its annual Global Private Equity Conference in Washington D.C. from the 13th – 16th May 2019. The conference is the world’s leading event dedicated to exploring private investment opportunities across emerging and frontier markets, convening over 850 industry professionals from more than 70 countries annually.


Adansonia CEO Brendon Jones will be attending the event. You can contact Brendon on brendon.jones@adansoniaholdings.com to set up a meeting.


More on the event below:


https://www.globalpeconference.com/


PRIVATE EQUITY IN AFRICA – UNPACKING THE TRENDS:


With 2018 proving an eventful year in the African Private Equity space, a few clear trends have emerged in how Limited Partners (“LP”) will view and approach possible new investments in 2019. According to Private Equity experts from law firm, Webber Wentzel, the focus will mainly be on three things: exits, leverage and fund documents.


Being able to exit positions at value and harvest profits, as well as doing so within fund terms, have proven tricky in 2018 and will be of high importance to prospective investors in 2019. It is clear that some funds have found themselves holding more assets at the end of the fund life than they had anticipated whilst other funds have not performed as well as expected due to currency and political risks, amongst other challenges. Extending fund terms has also come under more pressure with fund managers needing not only the consent of Limited Partner Advisory Committees but the consent of the investors themselves, with fund managers being penalized on fees.


General Partner’s (“GP”) use of leverage will also come into the spotlight as the use of credit lines to bridge commitments and maximise returns can lead to enhanced investor exposure and liability.


The collapse of Abraaj has also turned the attention of prospective Limited Partners to the need for more LP powers and protections in terms of fund documents. Investing in a fund with GP-friendly documents can lead to situations where Limited Partner Advisory Committees have little say on the conduct of the fund and, where LP’s could end up being liable for certain commitments made by fund managers.


Below is a link to the article written by Webber Wentzel Private Equity experts:


https://www.bbrief.co.za/2019/03/06/private-equity-in-africa-unpacking-the-trends/



LATEST ON KENYA-MAURITIUS DOUBLE TAX AGREEMENT:


On 15th March 2019 the Kenyan High Court ruled that the current Kenya-Mauritius Double Taxation Agreement (“DTA”) will be deemed void due to procedural shortcomings.


Kenya and Mauritius signed the DTA on the 7th of May 2012, which Kenya thereafter ratified on 23rd of May 2014 through a publication in the Kenyan Government Gazette. The treaty was meant to come into effect on the 1st of January 2015 subject to the Kenyan parliament notifying the Mauritian Government on completion of the ratification process. Failure to do so now means that there is no agreement between the two nations and a new agreement will have to be put in place with all procedural and statutory requirements being met from scratch.


The fact that the DTA was never officially ratified, means that the ruling will have little to no effect on current Kenyan companies with structures in Mauritius as withholding taxes and payments, at present, are treated as they would be with any other non-treaty country.


Below is a link to the alert issued by law firm, Bowmans with more detail:


https://reaction.bowman.co.za/rs/vm.ashx?ct=24F76C1BD2E00AEDC1D089A5D52F931AD5BE7BB3D38714DD4CF371647BF8D90DDD78037


WARNINGS AGAINST ‘PHISHING’ SCAMS :


The Financial Services Commission of Mauritius (“FSC”) has released numerous warnings concerning the dangers of ongoing ‘phishing’ scams aimed at obtaining sensitive and private information from businesses and individuals that could lead to severe losses.


These campaigns attempt to trick the recipient into believing that they are being contacted by a trusted third party, often under the guise of a known service provider or institution, in an attempt to defraud the recipient.


Below is a link to an official alert issued by the FSC


https://www.fscmauritius.org/media/3361/alert_on_phishing.pdf


Some phishing attacks can be blatant as in the case of ransomware; others can remain undiscovered allowing assailants to silently move laterally within your network to breach your data and potentially steal intellectual property.


With the help of Perrieri IT Solutions Ltd, our Team can assist in the implementation of Office 365 Advanced Threat Protection to catch threats before they disrupt your organization, keeping your data, intellectual property and users safe from email phishing attacks and zero-day malware.


Anti-phishing policies will verify the authenticity of the domain source against standard frameworks like Sender Policy Framework (SPF); Domain Keys Identified Mail (DKIM) and Domain-based Message Authentication (DMARC) and apply additional measures to detect the spoofing of internal or external domains. ATP blocked 5 billion phish emails in 2018.


For more information, contact Sachin Bhundoo on sachin@perrieriitsolutions.com https://perrieriitsolutions.com