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May 17, 2001
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Money > Business Headlines > Report May 17, 2001 |
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MNCs trudge Mauritius route to fund open offersBS Corporate Bureau Funds for US air-conditioning major Carrier's open offer to acquire the widely-held shares (amounting to 49 per cent stake) in its Indian subsidiary Carrier Aircon Ltd, will be routed primarily through Mauritius, a move seen helping it save on tax. Barely six months before it announced the open offer, Carrier had floated a company in Mauritius christened Carrier Mauritius with a capital investment of only $5,000. Observers say that though using the Mauritius route is not abnormal, more and more multinationals are now using the island country to pump in their funds to India thanks to its low corporate tax rates. Two days after Carrier's announcement, Otis Elevator, also of the US, too announced an open offer for its local subsidiary Otis Elevator Co (India) Ltd and its funds will also be coming through a Mauritius subsidiary in concert with the parent and two more arms based in Singapore and Hong Kong. Details of Otis' Mauritius subsidiary could not be ascertained. Carrier's Mauritius arm, a wholly owned subsidiary of Carrier Singapore, at present has an equity share capital of only $5,000. Carrier Singapore will make adequate funds available to Carrier Mauritius as and when investment decisions for such off-shore business activities are decided upon or formalised. Carrier Singapore, on the other hand, was incorporated in 1964. It is engaged in the business of sale, distribution and installation of air conditioning and ventilating equipment and provides after-market service and components. In recent times, most US and European companies have set up subsidiaries in Mauritius only for acting as an investment vehicle. Mauritius has also emerged the largest foreign direct investor. Government data shows that in 2000, Mauritius ranked first in inflows accounting for (38.95 per cent) of total inflows, followed by the US (17.95 per cent) and Japan (8.48 per cent). In terms of origin of investment, an appraisal of approvals since 1991 shows the US accounted for the highest share, followed by Mauritius. But inflows as a percentage of approvals was also relatively higher than other countries. Powered by YOU MAY ALSO WANT TO READ:
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