On 30 Jun 2023, Onecompliance was pleased to invite Mr. Jean Claude Tsang and Mr. Rajiv to join as our panellist discussed Mauritius, African regulatory landscape for virtual assets investors and business owners.
Mr. Jean Claude Tsang is the General Manager of Redbird Corporate Services. Mr. Tsang is an experienced business executive on offshore business and wealth management and also working as an adjunct professor on business management in the University of Mauritius. Mr. Rajiv Babooram is lead professional from Economic Development Board of Mauritius. Mr. Babooram is an expert on financial services, fintech and fund and has more than 12 years’ experience in trade, investment and promotion Mauritius International Financial Center. Ms. Grace Chen, a regulatory consultant from Onecompliance Consulting moderated and joined this panel discussions.
In June 2023, the US SEC said it was suing Coinbase, alleging that the company had been acting as an unregistered broker, exchange and clearing agency since 2019 requesting that the company be “permanently restrained and enjoined” from doing so. The SEC also alleged that Coinbase never registered its staking service as required by US securities laws. US federal regulator set an example that viewing virtual assets, such as Solana, Cardano and Polygon that should have been registered as securities. It may against some web 3 players concepts that viewing virtual assets as permissionless world to navigate.
Following US’s regulator footsteps on regulating virtual assets, other jurisdictions released their own guidelines on regulating virtual assets. Ms. Grace Chen from Onecompliance mentioned that Singapore MAS on 23 June 2023 just released Singapore framework for digital asset network, within this framework Project of Guardian is set to test the potential of asset tokenisation across more financial asset classes such as asset and wealth management; fixed income; and foreign exchange. Mr. Babooram from EDB of Mauritius agreed that same trend happened in Africa. Mr. Babooram highlighted that Mauritius is positioning itself as the fintech hub of Africa, in view of its political, social, economic stability and conducive business environment
Mr. babooram further explained that In February 2022, Mauritius enacted the Virtual Asset and Initial Token Offerings Act 2021 (VAITOS act) which is a comprehensive legislation to regulate Virtual Assets, Virtual Assets Service Providers (VASPs) and issuers of ITOs. The Financial Services Commission, regulator for non-banking and global business activities is responsible for regulating the Virtual Assets regime.
It establishes a regulatory framework for VASPs and ITOs resting on the VAITOS act, alongside the Financial Services Act 2007, the Financial Intelligence and Anti-Money laundering Act 2002 and the United Nations (Financial Prohibitions, Arms Embargo (UNSA) and Travel Ban) sanction Act 2019.
The virtual assets licenses has five classes of Virtual Assets Licenses namely, broker-dealer, wallet services, custody licence and Market place licence. Since the introduction of the Virtual assets licenses, leading global players have shown an interest to set up in the Mauritius jurisdiction.
“To the date, there are several international applicants already received the in principle approvals granting virtual assets licenses under Mauritius regulatory framework and supervision” said Mr Babooram and “some applicant gained the advisory, wallet, custody, broker and even marketplace licenses” which enable the business can conduct almost full range of virtual assets trade and transaction.
To response the question raised by Grace Chen, Mauritius is not the familiar investment destination to web3, any big name in fintech business already came to Mauritius? Mr. Jean Claude cited the example Mauritius as the financial services hub in South Indian ocean area for more than 100 year. Almost all the major banks have their own subsidiaries in Mauritius and big four all have branches in Mauritius offering tax, financial advice to the clients. Mr. Babooram supplemented that “actually international fund, wealthy families choosed Mauritius as the place to conduct international investment for years“. It arises from the Mauritius excellent geography location, time zone same as Dubai and bilingual language (English and French) advantages and absence of foreign exchange controls. The most important strength for Mauritius is its low tax environment (corporate tax may be as low as 0% in some cases, subject to meeting substance requirements, 3% under the Partial Exemption Regime and flat 15%; For individual, Mauritius has a progressive tax system starting from 0% and capped to 20%. However, it has been observed that investors do not choose Mauritius just because of its tax regime, but rather because of its conducive environment and ease of doing business. Compared with other jurisdictions by latest research of PwC, Mauritius is the only one paralleled with Cayman, Switzerland, Bahamas as the uprising comprehensive legislature on web 3 business.
In the end of the panel discussions, panellists replied the questions asked by attendees such as can web 3 business owner opens bank account in traditional banks in Mauritius? The legislature and political stability of Mauritius and other financial scheme can be used in Mauritius.
Although this webinar only lasted 40 mins, it is an informative session introducing Mauritius as an African landscape in Web3 landscape.
For more information regarding Web 3 licenses, regulations in Mauritius and this webinar recording, please contact grace.chen@1compliance.group.