MAURITIUS’S Richard Arlove
The Mauritius-based business adviser works with clients from multinationals to family-run firms to build ‘financial integrity’ and navigate the challenges of investing on the continent
Mauritius has taken a reputational beating in recent years, but the government is now making some strides in transparency and good governance. Documents leaked to the International Monetary Fund in 2014 revealed that diamond wealth was siphoned out of Zimbabwe and transferred through Mauritius before disappearing into the endless global maze of secrecy jurisdictions or tax havens. At the same time, the country regularly got bad press as a result of Indian concerns that investors were using a double taxation avoidance agreement (DTAA) with Mauritius to bypass paying taxes in India. In May 2016 India and Mauritius signed a protocol to end the DTAA, and Mauritius has worked to up its transparency game. Richard Arlove, who says the Mauritius-based business services company he runs – ABAX – has been lobbying for reform, is “delighted that Mauritius has recently signed up to the Base Erosion and Profit Shifting agreement” as well as the Common Reporting Standard treaty and all the European Union’s transparency legislation. “All these compliance and reporting rules are important if a financial centre wants to be considered as important.” For Arlove, governance matters all the way down the chain, from financial centre to small companies. He argues it will be key to the next big driver in African economies, the transformation of the huge number of family-owned enterprises into entities with more productive capacity. In particular, he points to the need to bridge a “governance gap” – not reaching for a cousin to run a department or factory, instead putting in place internal controls and professional talent.
ABAX helps clients manage their investments in Africa, with the added benefit of Mauritius’s hybrid legal system that incorporates both the Napoleonic code civil found in francophone African countries and the common law often found in anglophone ones. “We help bring financial integrity to the companies in which our clients invest,” says Arlove. “We can’t mitigate all the risks, but we help with the ones that we can, like foreign-exchange risk.” He is also working to help African innovators protect their intellectual property. “There are Africans who are inventing plenty of things: methods for paying for water, mobile banking and so on. How do we structure companies to help the African entrepreneur protect his intellectual property? Often entrepreneurs don’t think about it,” says Arlove. “And how do you value it. If tomorrow, he wants to exit the company, can he take it with him? Or sell it?”