By Shruti Menon Seeboo
In a crucial period for the nation’s economy, Mauritius Finance hosted an engaging panel discussion on 10 June 2025, delving into the National Budget 2025-26 measures and their far-reaching implications for the Financial Services Sector. The session brought together over 100 industry professionals, including members and stakeholders, for a dynamic roundtable discussion.
The event, moderated by Mauritius Finance Chairperson, Shamima Mallam-Hassam, Managing Director of Trident Trust (Mauritius) Ltd, featured esteemed panellists Ben Lim, CEO of Intercontinental Trust Ltd; Priscilla Balgobin-Bhoyrul, Senior Partner at Dentons Mauritius; Assad Abdullatiff, Managing Director Axis Fiduciary Ltd; and Akshar Maherally, Managing Director of WTS Tax Consulting (Mauritius).
Navigating the Economic Landscape: Initial Reactions and Achievability
Opening the discussion, Shamima Mallam-Hassam set the context: “The new government’s first budget was eagerly awaited, presented in a very challenging economic context where we face a high level of debt nearing 90% of our GDP, a widening budget and trade deficit, and the shadow of a sovereign rating downgrade.” She noted that the budget is anchored on three pillars: economic renewal, a new social order, and fiscal consolidation.
Mallam-Hassam then posed the initial question to Ben Lim: “What is the sentiment after this budget, and do you think that the overarching objectives set by the government are achievable?”
Ben Lim acknowledged the industry’s alignment on the severity of the situation. “Certainly, we are aligned. All stakeholders agree that we are staring into the abyss – we are in a dangerous situation and need to get out.” He underscored the critical 9.8% budget deficit and 90% debt-to-GDP ratio, emphasising the “risk of being downgraded to junk.” While the budget’s objectives – fiscal consolidation, stability, economic renewal, social transformation, and enhancing competitiveness – are certainly achievable, Lim stressed that “you need good governance – you need the government to make sure they have people who can execute those actions.”
Streamlining Operations: The Future of Ease of Doing Business
The discussion then shifted to specific measures impacting the financial services sector, particularly those aimed at strengthening it through greater regulatory clarity and digital transformation. Shamima Mallam-Hassam highlighted the announced unified E-licensing platform, integrated with a centralised KYC repository and AI-powered virtual assistant. She asked Assad Abdullatiff whether this measure would effectively address the long-standing issues of application delays and processing inefficiencies.
Assad Abdullatiff viewed the use of technology as “a very positive step,” potentially reducing duplication and fostering more efficient onboarding. However, he cautioned, “This is not the first time such digital improvements have been announced… the real test will be in execution.” More fundamentally, Abdullatiff argued that “technology alone will not resolve structural causes of the delays.” He pinpointed key issues:
- FSC’s Resource Allocation: The FSC dedicates significant resources to reviewing applications for simple global business companies (GBCs) and authorised companies not engaged in financial services. He recommended the Commission “focus its core licensing mandate” and rely more on management companies for due diligence, as was previously the case, to “free up capacity” for genuinely regulated applications.
- Expertise Gap: Abdullatiff noted an “expertise gap” at the FSC, suggesting that reviewers sometimes lack a “commercial or practical lens.” He proposed industry-led training for FSC personnel to share pragmatic, sector-specific experience, which he believes would resolve delays “not because of complexity, but simply because the people who are reviewing them do not necessarily have the relevant sector specific experience.”
- Lack of KPIs: He advocated for “a clear framework of service level, timelines or performance benchmarks.” Recalling the “do business in three days” promise from 2005, he lamented that “today, people in the room would agree that it takes sometimes a very long time to set up entities.” He concluded that without addressing these root causes, Mauritius risks “ending up with a very sophisticated digital front end layered over an inefficient back end.”
Strengthening Trust: The AML/CFT Framework in Focus
Shamima Mallam-Hassam then directed the conversation to the critical area of AML/CFT, noting the release of the second National Risk Assessment and the announcement of a national roadmap to prepare for the ESSAMLAG mutual evaluation in 2027. She asked Priscilla Balgobin-Bhoyrul about her expectations for this roadmap and Mauritius’ readiness for the evaluation.
Priscilla Balgobin-Bhoyrul expressed relief at the budget’s mention of the impending evaluation, acknowledging the industry’s lingering fear of returning to the FATF grey list. While Mauritius’s technical compliance is robust, she highlighted that the next assessment would focus on “effectiveness.” She welcomed the planned public and private sector training but emphasised the importance of “dialogue between the private sector and the regulator” to prepare for stricter inspections.
Balgobin-Bhoyrul also pointed to areas for legislative alignment, such as the Companies Act regarding beneficial ownership and the criteria for domestic Politically Exposed Persons (PEPs). She questioned why certain entities like general insurers are defined as financial institutions in local law when FATF does not mandate as much, creating “additional regulatory burden on ourselves” without commensurate benefit. She also called for streamlining Customer Due Diligence (CDD) requirements across different professional sectors to avoid “regulatory fatigue.”
Unlocking New Avenues: The Partial Exemption Regime for Virtual Assets
The panel then discussed the partial exemption for Virtual Asset Providers (VAPs) under the Virtual Asset and Initial Token Offering Services Act 2021. Shamima Mallam-Hassam asked Akshar Maherally to elaborate on this measure.
Akshar Maherally described the partial exemption as a welcome measure following the exemption of profits or gains from virtual asset disposal in the Finance Act 2024. He underscored the immediate need for substance requirements to be released and cautioned against overly stringent requirements, given that the existing VASP Act already imposes “extremely stringent” substance rules.
Assad Abdullatiff added that the VAP license has not seen much uptake in Mauritius, a trend observed in other comparable jurisdictions like Jersey, Guernsey, and Cayman, with Dubai being a notable exception. He attributed the low uptake to three main reasons:
- Cautious Regulation: Regulators’ cautious approach led to high compliance burdens, making the proposition commercially unviable for many.
- Lack of Domestic Digital Asset Economy: Mauritius lacks a strong local digital asset ecosystem and anchor players.
- Banking Obstacles: VASPs struggle to open and maintain basic bank accounts, without which even the best tax system is ineffective.
Abdullatiff lauded Dubai’s success, citing its “purpose-built regulatory regime,” a dedicated regulator (VARA), a tiered licensing system, active coordination with financial institutions, and integration of its VASP strategy into a wider FinTech agenda. He recommended Mauritius consider a tiered licensing approach for proportional compliance, genuinely adopting risk-based supervision, ensuring banking support, and leveraging legal and fiduciary strengths for areas like tokenisation and custody solutions.
Balancing Growth with Fiscal Prudence: The Impact of New Taxes
Shamima Mallam-Hassam next raised the sensitive issue of the Fair Share Contribution and Alternative Minimum Tax, drawing parallels to previous levies like the Solidarity Levy and Climate Responsibility Levy, and their impact on investor confidence. She asked Ben Lim about client concerns and whether these measures are deterring investors.
Ben Lim candidly stated, “taxes like solidarity levy or the climate change levy have already eroded business confidence and dampened investment.” He warned that additional taxes “would undermine investor sentiment, especially if business perceives the fiscal environment to be unpredictable and punitive.” Lim highlighted the potential impact on entrepreneurs, suggesting that an individual selling a business could face combined taxes on profits and dividends up to 40%, and earned income up to 60%. “We will probably fall on the higher end of the highly taxed countries in the world,” he asserted, cautioning, “entrepreneurs are mobile. Businesses are mobile… there’s a risk of capital flight.”
Assad Abdullatiff echoed this sentiment, citing the UK’s abolition of the non-domicile status regime, which led to an “exodus of high net worth and ultra-high net worth individuals” to more favourable jurisdictions like Portugal, Spain, Italy, and Dubai. He stressed that Mauritius competes with these jurisdictions, which offer lower tax rates and a “total experience” encompassing ease of doing business, speed, certainty, and cost. “The solution is not to tax more frankly, but perhaps to tax more strategically,” he advised.
Akshar Maherally provided clarity on the Fair Share Contribution (FSC) and Alternative Minimum Tax (AMT), confirming that entities holding a Global Business License (GBL) and those enjoying tax holidays are exempt. Maherally raised a critical concern from an OECD perspective: “Does this exemption constitute a preferential tax regime for GBLs, as opposed to the domestic companies?” He suggested this could be a “source of concern from a harmful tax practice perspective for the OECD,” given Mauritius’s membership in the Inclusive Framework.
Unlocking Potential: Enhancing Wealth Management and Family Office Propositions
On a more positive note, Shamima Mallam-Hassam addressed the announced setup of a dedicated licensing framework for wealth management and family offices, asking Priscilla Balgobin-Bhoyrul about the right approach to enhance this proposition.
Priscilla Balgobin-Bhoyrul expressed her happiness at this long-awaited development. While acknowledging potential confusion with the new fiscal regime, she was “extremely hopeful that this is the right direction,” emphasising the need for accompanying “fiscal incentives.” She highlighted past inconsistencies, such as treating single and multi-family offices in the same manner, and imposing a USD 5 million AUM requirement on single-family offices, calling for legal clarity. Balgobin-Bhoyrul envisioned Mauritius positioning itself to attract ultra-high-net-worth individuals and family offices through dedicated desks at the regulator and EDB, looking for “interesting investments in Africa.”
Ben Lim echoed this, stating that the government’s move “signals a clear ambition for Mauritius to attract wealth managers and be a competitive jurisdiction for family offices.” However, he stressed the importance of balancing revenue needs with growth objectives, warning that “higher taxes could block the effectiveness of efforts to attract private wealth and family offices, if not fully calibrated.” For the family office regime to truly succeed, he called for clear tax policy, stability, targeted incentives, and a compelling value proposition compared to other International Financial Centres (IFCs).
Championing the Future: “Innovative Mauritius” and Economic Diplomacy
Finally, the discussion turned to Mauritius’s strategy to position itself as an innovative and globally competitive jurisdiction, focusing on the “Innovative Mauritius” brand championed by the EDB and the enhanced role of embassies in economic diplomacy. Shamima Mallam-Hassam asked if these measures would boost the visibility of the Mauritius IFC, which has historically suffered from image issues.
Priscilla Balgobin-Bhoyrul welcomed “economic diplomacy” and the budget’s positive rhetoric on sustainability, innovation, and AI. Balgobin-Bhoyrul asserted that this strategy requires ambassadors worldwide promoting the financial sector and a new brand image to shed the “tax haven or flow island” perception. She emphasised the need for financial services to be a key pillar in every trade mission.
Assad Abdullatiff acknowledged the EDB’s crucial promotional role for the Financial Services sector but called for the government to “invest in deepening the sector expertise within the EDB,” ensuring dedicated personnel who understand the sector’s intricacies and promotion strategies. He also advocated for a dedicated budget for financial services promotion, recalling the effective, high-impact missions led by the FSPA in the early 2000s. Abdullatiff concluded by reiterating his earlier point: “execution is the key.”
Conclusion
The Mauritius Finance panel discussion underscored a shared understanding of the challenging economic realities facing the nation. While acknowledging the government’s bold steps in the National Budget 2025-26, panellists offered critical insights and strategic recommendations. The consensus was clear: while the ambition to consolidate fiscally, enhance competitiveness, and innovate strategically is welcome, the devil lies in the details of execution. Success will hinge on bridging the gaps between policy intent and practical implementation, addressing structural inefficiencies, ensuring fiscal measures do not stifle growth, and strategically investing in a robust, globally visible “Innovative Mauritius” brand. The panel highlighted an urgent call for closer collaboration between government and industry to navigate these complexities and secure Mauritius’s future as a leading and resilient IFC.
