Mauritius Bank Account

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. Mauritius has attracted more than 9,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over $1 billion.

Open a Mauritius bank account

Mauritius has adopted a cautious attitude towards banking development, having admitted only in the region of ten 'Offshore Banking Units' (OBUs). In any case, the distinction between 'onshore' and 'offshore' banks has since been removed.

The legal and supervisory regime for OBUs is to be found in the Banking Act 1988, with amendments in the MOBA Act 1992, the Foreign Dealers Act 1994, the Finance Act 1998 and the Financial Services Development Act 2001 (since superceded by the Financial Services Act 2007). The Bank of Mauritius (the Central Bank) is responsible for licensing, regulation and supervision of the banking sector.

Offshore Banking means banking and investment banking business conducted in currencies other than the Mauritius rupee. OBUs may engage in fund administration and portfolio management, and offer treasury, custody and trust services.

OBUs, like Offshore Companies in general, can be formed as companies under the Companies Act 1984 (now the Companies Act 2001), or as branches.

The application process is fairly rigorous, and includes provision of audited financial statements for the past 5 years. The licensing processing fee is $3,000 (at the time of writing), and the annual license fee is currently $20,000.

In March, 2005, the Mauritius National Assembly passed two bills - the Bank of Mauritius Bill and the Banking Bill - designed to give the Central Bank more autonomy and to remove differences between the offshore and onshore banking regimes.

Then Prime Minister Paul Berenger said it was the government's decision to give the Bank of Mauritius real independence. He also made a point of mentioning the statutory basis for banking confidentiality incorporated in the new legislation. Requests for information in future would have to be authorised by a judge of the Supreme Court.

Although the opposition had some criticisms of some aspects of the corporate governance regime set up for the central bank, and of the bank's supervisory procedures, these weren't sufficient to prevent a unanimous vote in favour of the bills.

Under the new law, the Bank of Mauritius offers only one type of banking licence as opposed to the two (onshore and offshore) previously available. The Banking Act clarifies the division of responsibilities for the financial; sector between the central bank and the Financial Services Commission. The Act also annulled the existing Foreign Exchange Dealers Act; in future, such dealers will fall under the aegis of the central bank.

The existing rule that 40% of a bank's directors should be independent, currently forming part of the Rules on Corporate Governance issued in 2001, forms part of the new law. The definition of independent director is: 'having no relationship with, or interest in, whether past and present, the financial institution or its affiliates, which could reasonably be perceived to materially affect the exercise of his judgment in the best interest of the financial institution'.

The minimum capital requirement for a bank was increased from Rs 100m to Rs 200m, but banks were allowed to increase their capital in two stages, from Rs 100m to Rs 150m by 1st July, 2005, and then to Rs 200m by 1st July, 2006.

The new law gives the central bank power to appoint a 'Conservator' to protect the assets of a bank's depositors if 'the financial institution has, or its directors have (i) engaged in practices detrimental to the interests of its depositors, (ii) knowingly and negligently permitted its chief executive officer, any of its managers, officers or employees to violate any provision of the banking laws, any enactment relating to anti-money laundering or prevention of terrorism or guidelines and instructions issued by the Central Bank. The law also enables the central bank to establish a deposit insurance scheme as a protection 'against the loss of part of all of deposits in a bank that will contribute to the stability of the financial system in Mauritius and minimize the exposure to loss'.

Other provisions included a strengthening of KYC rules, laying down that 'every financial institution shall only open accounts for deposits of money and securities, and rent out safe deposit boxes, where it is satisfied that it has established the true identity of the person in whose name the funds or securities are to be credited or deposited'. Banks will also have to rotate their auditors at least once every five years. Source: lowtax.net

Open a Mauritius bank account