EDEN IAS

NEWS IMPULSE – FINANCE COMPANIES CANNOT BE SET UP WITH FDI FROM MOURITIUS| 09 OCTOBER

<p style=”margin-bottom: 8px; text-align: center;”><span style=”font-size:14px;”><span style=”line-height:107%”><span style=”font-family:Calibri,sans-serif”><span style=”color:#595959″><b>SOURCE &ndash; Economic times</b></span></span></span></span></p>

<p style=”margin-bottom: 8px; text-align: center;”><span style=”font-size:14px;”><span style=”line-height:107%”><span style=”font-family:Calibri,sans-serif”><span style=”color:#595959″><b>GS PAPER &ndash; 3</b></span></span></span></span></p>

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<p style=”margin-bottom:8px”><span style=”font-size:14px;”><span style=”line-height:107%”><span style=”font-family:Calibri,sans-serif”><span style=”color:#595959″><b>Context</b> – <span style=”background:white”><span style=”line-height:107%”><span style=”font-family:&quot;Arial&quot;,&quot;sans-serif&quot;”><span style=”color:#444444″>The Reserve Bank of India recently said that companies cannot set up Foreign Direct Investment from Mauritius, as they do not comply with norms set by FATF.</span></span></span></span></span></span></span></span></p>

<p style=”margin-bottom:8px”><span style=”font-size:14px;”><span style=”line-height:107%”><span style=”font-family:Calibri,sans-serif”><span style=”color:#595959″><b><span style=”background:white”><span style=”line-height:107%”><span style=”font-family:&quot;Arial&quot;,&quot;sans-serif&quot;”><span style=”color:#444444″>Highlights </span></span></span></span></b></span></span></span></span></p>

<p style=”margin-bottom:16px; text-align:justify”><span style=”font-size:14px;”><span style=”background:white”><span style=”vertical-align:baseline”><span style=”font-family:&quot;Times New Roman&quot;,serif”><span lang=”EN-GB”><span style=”font-family:&quot;Arial&quot;,&quot;sans-serif&quot;”><span style=”color:#444444″>The Reserve Bank banned the FDI from Mauritius due to the following reasons</span></span></span></span></span></span></span></p>

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<li style=”text-align:justify”><span style=”font-size:14px;”><span style=”background:white”><span style=”color:#444444″><span style=”line-height:18.0pt”><span style=”vertical-align:baseline”><span style=”font-family:Calibri,sans-serif”><span style=”font-family:&quot;Arial&quot;,&quot;sans-serif&quot;”>To prevent round tripping. Round tripping is common in countries that enjoys tax havens (such as Mauritius). Here, the companies from home country take the route of foreign investment to enjoy tax havens. In other words, shell companies are created in foreign lands.</span></span></span></span></span></span></span></li>
<li style=”text-align:justify”><span style=”font-size:14px;”><span style=”background:white”><span style=”color:#444444″><span style=”line-height:18.0pt”><span style=”vertical-align:baseline”><span style=”font-family:Calibri,sans-serif”><span style=”font-family:&quot;Arial&quot;,&quot;sans-serif&quot;”>To curb Chinese Investments. Several Chinese companies are using Mauritius to enter Indian market at reduced cost</span></span></span></span></span></span></span></li>
<li style=”text-align:justify”><span style=”font-size:14px;”><span style=”background:white”><span style=”color:#444444″><span style=”line-height:18.0pt”><span style=”vertical-align:baseline”><span style=”font-family:Calibri,sans-serif”>Mauritius was listed in grey list of FATF</span></span></span></span></span></span></li>
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