Asia Pacific

Stock Market Guide to the Mauritian Stock Market

The Stock Market Haven of Mauritius

What could sand and sea have to do with a stock market? Many island territories have used physical attractions to lure economic development, since they lack the conventional infrastructural and material resources which attract industry. Mauritius uses its special political equation with India to leverage company incorporation. This is a window for international investors, and an alternate to direct stock market involvement in India.

No stock operator will be surprised to find that investment and holding companies dominate the Stock Exchange of Mauritius. The island territory’s airline, and companies which live off the local tourist potential, are also listed members of the stock market, but it would be most unusual for an international operator to show any interest in them. This applies to plantation companies and to suppliers of agricultural inputs as well.

Market capitalization of even less than $1 million is enough to meet the easy listing requirements of the Mauritius stock market. The Exchange functions as a private limited company, and has adequate procedures and controls for basic stock market operations. However, it lacks critical mass, and may not remain as a feasible operation if India were to place restrictions on the Mauritius role in the economy of the large and growing sub-continent economy. Since the Indian government loses enormous streams of revenue through the arrangement, the Mauritius route is vulnerable. The benefits for the Mauritius economy are also minuscule, since investors maintain skeleton presences in the territory in order to claim the tax benefits of local residence and incorporation.

It should be said to the credit of Mauritius that it respects democratic conditions, and has none of the abuses of human rights which are common in the neighboring continent of Africa. There are chances of some modern services being established on the island, even if the Indian government wakes up to the present duplicity. However, Mauritius will have to attract a significant new population of technologists, if it is to take a share of the outsourcing pie from the developed world. The island’s government also hopes to compete with other tourist destinations by offering consumer and luxury goods from all over the world at tax-free rates.