The Role of Mauritius in the Paradise Papers Scandal

The Paradise Papers were the exciting, and unsurprising, sequel to the Panama Papers, an ongoing investigation series in the world of the offshore sector. This time, the Paradise Papers investigation is targeting Mauritius, as it has arguably become a high profile money dumping zone for celebrities and investors.

The Paradise Papers has sparked an international investigation, exposing secret and previously hidden information in the offshore industry. These offshore accounts are where celebrities, wealthy socialites and high profile individuals bury and dump excess money. Since this offshore sector took off around 1989, different governments and high profile investors have tried to give Mauritius a final push to become an offshore hub. 1992 was the year that they finally became a big player in the offshore world, and now over 16000 companies and investment brokers offer Mauritius as an offshore option.

Since it has become a hub, the money received from the offshore sector makes up nearly 5% of the entire country’s GDP, and this number will continue to grow, as Mauritius is ideal for businesses, as it sits at the perfect crossroads between Asia and Africa.

The fact that the offshore sector makes up 5% of the GDP means the country is becoming increasingly dependent on the offshore industry, indicating that the companies, and those who invest, may be more implicated than intended.

Some argue that the offshore sector has been created by the elite to avoid or lessen taxes and to conceal or make money disappear. There is undoubtedly a fine line between tax optimisation and straight up tax evasion. Companies should walk this line very carefully, and be aware of the legalities. The offshore sector has some dark secrets, and so it is an industry that requires a deep understanding, and insight, to ensure it stays honest and legal.