Preface
Leading up to the 2025 VC Fund Manager Masterclass in Mauritius, we explore the history and current ecosystem for venture financing in Mauritius. The country is already well-established as a financial services hub, with a thriving industry and large number of funds domiciled. Over a series of short articles we explore:
- How did Mauritius grow into a fund management hub?
- How is the venture industry performing today?
- What is the future of venture capital and the VC ecosystem in Mauritius and Africa?
Introduction
The financial services sector in Mauritius has a rich history dating back to the 17th century when the island was used as a regional payments and settlements hub by traders. Today, Mauritius stands as one of Africa’s most sophisticated international financial centers, boasting over a thousand funds, a collective AUM in excess of USD 80 billion, and a sizeable number of them from development finance institutions and sovereign wealth funds. This transformation from a sugar-dependent colony to a global fund administration hub represents one of the most remarkable economic evolution stories in the developing world.
Historical Foundations: The Early Years (1968-1990s)
When Mauritius gained independence in 1968, few observers anticipated its future as a financial services powerhouse. Nobel Prize winner James Meade prophesied in the early 1960s that Mauritius’s development prospects were poor, citing the island’s heavy dependence on sugar, vulnerability to terms of trade shocks, and potential ethnic tensions.
While the financial sector was already relatively well developed at independence, the robust economic performance over the last two decades strongly contributed to its further expansion. The Bank of Mauritius, established as the central bank, played a crucial role from the beginning. From the very beginning the BOM focused on creating the framework for a modern financial intermediation system that could allocate resources efficiently to fund development needs.
The foundation for modern financial services was laid early, with treasury bills issued by tender on a monthly basis starting in April 1969, and the central bank providing forward cover for foreign exchange risk as early as 1968/69, recognizing the economy’s openness and dependence on trade.
The Offshore Revolution: 1990s Transformation
The real transformation began in the early 1990s with strategic legislative changes that would reshape Mauritius into a global financial center. Following the economic liberalisation in India in 1991 and the creation of the Mauritius Offshore Business Activities Act (MOBAA) in Mauritius in 1992, there was a rise of activities in the Mauritius Offshore Sector.
The government implemented several key reforms that laid the groundwork for the fund administration industry:
- 1994: The Government abolished the foreign exchange control by suspending the Foreign Exchange Control Act in order to enable free repatriation of capital
- 1996: A deemed foreign tax credit was conceived as a simple and practical approach to the domestic fiscal treatment of foreign investment returns
These reforms created the enabling environment that would attract international fund managers and administrators to establish operations in Mauritius.
The New Millennium: Regulatory Sophistication (2000s-2010s)
In the 2000s, Mauritius embarked on a transformation period with the view of establishing a more stable and reputable financial centre. The most significant milestone came in 2001 with comprehensive regulatory reform.
In 2001, the MOBAA was repealed and replaced by the Financial Services Development Act. Subsequently, in the same year, the Financial Services Commission (FSC) was set up to replace MOBAA, to regulate and supervise all non-banking financial services.
The FSC’s establishment marked a turning point in the industry’s evolution. The vision of the FSC is “to be an internationally recognized Financial Supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre”.
This period saw significant growth in the fund administration sector, with Mauritius positioning itself as a gateway for investments into Africa and Asia, leveraging its strategic location and favorable time zone.
Current Industry Landscape: A Global Hub
Today, Mauritius has emerged as a dominant player in the global fund administration industry. Mauritius is home to some of the most impactful and leading funds from around the world, with impressive statistics that underscore its significance:
- The Mauritius IFC also hosts reputable legal firms, professional services firms and renowned management companies, which collaboratively service nearly 1000 global funds and facilitate operations for over 15,000 companies in the Global Business sector
- The MIFC counts more than 450 private equity funds that are investing in Africa and nearly $40 billion investments in Africa were structured through Mauritius
Leadership Perspectives on Industry Evolution
Dr. Désiré Vencatachellum – FSC CEO on Future Vision
The industry’s future direction is being shaped by new leadership with a clear vision. Dr. Désiré Vencatachellum, the newly appointed CEO of the Financial Services Commission, brings over 30 years of experience in development finance. “Harnessing this strength will be key to advancing our financial ecosystem,” he said, referring to Mauritius’s tremendous potential and wealth of talents.
Dr. Vencatachellum emphasizes the strategic importance of Mauritius’s positioning: “We must shape the FSC that is not only relevant for today’s challenges but also resilient and forward-looking for 2030 and 2050”. He highlights the key role of Mauritius as a dynamic gateway between Africa and Asia.
PwC’s Sharvin Ballah on Market Opportunities
Sharvin Ballah, Partner at PwC Mauritius, provides insights into the sector’s growth potential. In absolute terms, the AWM expansion would be the fastest growing in the Middle East and Africa at a projected 6.9% CAGR. He emphasizes that Mauritius, as a prominent International Financial Centre (IFC), has demonstrated its capabilities to serve that purpose.
Ballah highlights the competitive advantages: Strategically positioned with an advantageous time zone between Africa and Asia, the Mauritian jurisdiction is highly regarded as a favourable business destination with a range of unique offerings for the AWM sector.
Tax and Regulatory Framework: Competitive Advantages
Mauritius offers one of the most attractive tax regimes for fund administration globally:
- There is no capital gains tax in Mauritius and no withholding tax on dividends and interest
- As a result, 80% of the foreign-source income derived by a Collective Investment Scheme (CIS), Closed-End Fund (CEF), CIS manager or CIS administrator are exempted from income tax
- Recent enhancements include the announcement to increase the partial exemption to 95% for Collective Investment Schemes (CIS) and Closed End Funds (CEF)
The regulatory framework is comprehensive and internationally compliant. Mauritius’s financial services sector upholds corporate governance and international regulations through the overarching Financial Services Act (FSA) and oversight by the well-established Financial Services Commission (FSC).
Innovation and Technology: Embracing Digital Transformation
The industry is embracing technological innovation to maintain its competitive edge. Automation and fintech innovations are shaping the future of admin services. Automation has led to increased efficiency in the calculation of NAVs, financial reporting, and compliance monitoring.
Mauritius has also moved to accommodate emerging asset classes. The FSC has recognised such digital assets as constituting asset-class for investment by sophisticated and expert investors, Professional CIS, Expert Funds and specialised CIS.
Challenges and Opportunities: Looking Ahead
Despite its success, the industry faces challenges from global regulatory changes. The new amendments to the double taxation agreement are likely to constrain the growth of Mauritius’ offshore sector. Critics note that the financial sector has not transformed beyond providing basic services like fund administration, unlike more diversified financial centers such as Singapore.
However, industry leaders remain optimistic about future prospects. Expectations and hopes are higher than ever before with the Global assets under management (AuM) targeted to rebound by 2027, with expected revenues of up to US$622.1 billion, of which 50% is forecast to be generated from private markets.
The African Connection: Strategic Positioning
Mauritius’s role as a gateway to Africa remains central to its value proposition. Besides its location and strong network, Mauritius offers excellent connectivity to conduct and facilitate business with the emerging African market.
The government has actively promoted this positioning through various initiatives, including the creation of a Mauritius Africa Fund (MAF) in 2013, a public entity with a budget of $11 M to assist Mauritian companies to invest in Africa.
Regulatory Excellence and International Recognition
Mauritius has achieved recognition for its regulatory standards. Globally, the island stands out as one of the very few countries which are compliant with all the 40 recommendations of the FATF, placing significant emphasis on anti-money laundering and counter-terrorist (AML/CFT) measures within a robust framework aligned with international norms and best practices.
Economic Impact and Future Strategy
The fund administration and management industry has become a cornerstone of Mauritius’s economy. It transformed itself from a country with a per capita income of US$260 in the 1960s to one with a per capita income of more than $10,000 in 2021.
In 2015, the Ministry of Financial Services, Good Governance and Institutional Reforms was created and the Government has since then embarked on a strategy to further graduate Mauritius as a full-fledged International Financial Centre.
Conclusion: A Sustained Success Story
The evolution of Mauritius’s fund administration and fund management industry represents a remarkable transformation story. From its origins as a colonial trading post to becoming noted as the gold standard for fund management and administration, Mauritius has demonstrated the power of strategic vision, regulatory excellence, and adaptive governance.
As Dr. Vencatachellum noted, Mauritius has tremendous potential and is home to a wealth of talents. With over USD 80 billion in assets under management and a regulatory framework that continues to evolve with global standards, Mauritius is well-positioned to maintain its leadership in the global fund administration industry.
The industry’s future success will depend on continued innovation, regulatory adaptability, and the ability to serve as an effective bridge between international capital and emerging market opportunities, particularly in Africa. As the sector looks toward 2030 and beyond, the foundations laid over five decades of strategic development provide a strong platform for continued growth and evolution.
Invitation: Upcoming Fund Manager Masterclass
We are thrilled to be hosting the first ever VC Fund Manager Masterclass in Mauritius October 28th – 30th. Read more and sign up today.
Sources and References
- Mauritius International Financial Centre. “History.” Accessed July 2025. https://mauritiusifc.mu/our-ecosystem/history
- Mauritius International Financial Centre. “Fund and Asset Management.” Accessed July 2025. https://mauritiusifc.mu/global-funds
- Financial Services Commission, Mauritius. “About Us.” Accessed July 2025. https://mauritiusifc.mu/government-agencies-regulators/financial-services-commission
- PwC Mauritius. “Asset and Wealth Management revolution: Central Hub in Mauritius.” https://www.pwc.com/mu/en/about-us/press-room/asset-and-wealth-management-revolution.html
- AllAfrica. “Mauritius: Deputy Prime Minister Meets Newly Appointed CEO of Financial Services Commission.” July 24, 2025. https://allafrica.com/stories/202507240623.html
- AFSIC. “The Role of Fund Administrators in Mauritius.” July 5, 2024. https://www.afsic.net/the-role-of-fund-administrators-in-mauritius/
- U.S. Department of State. “2024 Investment Climate Statements: Mauritius.” January 4, 2025. https://www.state.gov/reports/2024-investment-climate-statements/mauritius
- International Monetary Fund. “Mauritius: A Case Study.” Finance & Development, December 2001. https://www.imf.org/external/pubs/ft/fandd/2001/12/subraman.htm
- DTOS Group. “Budget Highlights 2023-2024 ‘To Dare & To Care’.” June 15, 2023. https://www.dtos-mu.com/budget-highlights-2023-2024-to-dare-to-care/
- The Conversation. “Mauritius’ next growth phase: a new plan is needed as the tax haven era fades.” November 14, 2024. https://theconversation.com/mauritius-next-growth-phase-a-new-plan-is-needed-as-the-tax-haven-era-fades-231008