The Controversial Mauritian Route to Investing in India

The wife of the chancellor, Rishi Sunak, is a shareholder in a restaurants business that funnelled investments through a letterbox company in the tax haven of Mauritius, in a structure that could allow its backers to avoid taxes in India. The business, International Market Management (IMM), is hoping to build a chain of dozens of restaurants across India, via franchise agreements with the celebrity chef Jamie Oliver and the American fast food brand Wendy’s. The involvement of Sunak’s wife, Akshata Murty, has emerged from an investigation by the Guardian into a range of financial assets held by Sunak and his close family, many of which have not been declared in the official register of ministers’ interests. MM’s tax structure is legal, but controversial. The use of Mauritius as a conduit for capital into India has become notorious. A collection of islands in the Indian Ocean, with a population of 1.3 million, the small state is one of the largest sources of foreign investment into India. By setting up letterbox companies in Mauritius – essentially shell companies with no staff and no trading activity – investors can channel money from Indian businesses to the tax haven. Investments routed through Mauritius are estimated to have cost India between $10bn and $15bn over the last 20 years in lost capital gains tax, dividends tax, and tax on interest and royalty payments.

SOURCE: THE GUARDIAN