When Mark Twain visited the Mauritian capital, Port Louis, in 1896, a proud resident told him that “heaven was copied after Mauritius.” It seems a defensible assertion. With its verdant mountainsides fringed by yellow sand, it looks very much a jewel in a turquoise sea.
More tourists become acquainted with the charms of this Indian Ocean paradise each year, but some of the same features that attract them – the country’s remoteness and small size – have, in years past, been a hindrance to its economic development.
That’s changed dramatically over the past 20 years. No longer just a sugar exporter and tourist hideaway, Mauritius now boasts a booming information technology sector and acts as an important gateway to Africa for investors from around the world.
The Stock Exchange of Mauritius has returned 54.9% over the past five years, and there are a number of intriguing opportunities among its 38 listed stocks.
So, just how do you go about opening a brokerage account there?
I emailed each of the ten brokers who are licensed to trade on the Stock Exchange of Mauritius. I asked them if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found the five brokers listed below to be particularly helpful and responsive.
|Broker||Minimum Initial Deposit||Account Opening Form||Research Sample|
|Axys Stockbroking||No minimum required||Here||Here|
|CMB Stockbrokers||No minimum required||Here||Here|
|MCB Stockbrokers *||No minimum required||Here||No recent online research|
|Newton Securities||No minimum required||Not available online||No recent online research|
|Ramet & Associes||No minimum required||Not available online||No recent online research|
* MCB Stockbrokers charges an annual “account maintenance” fee in the amount of MUR200.00 (about $7.00). None of the other brokers listed here charges such a fee.
The cost of trading on the Stock Exchange of Mauritius is lower than any other African exchange that I’ve encountered. Commissions and fees are assessed on a sliding scale that is standard across all brokers. For transaction amounts less than MUR3,000,000 (roughly $103,000.00) you will pay 1.25% of the total trade value when buying or selling a stock. That’s a globally competitive rate.
Opening a Mauritian Brokerage Account
Now let’s walk through the process of opening an account with a Mauritian stockbroker and buying your first shares.
Step 1: Complete the CDS Account Opening Form
The Central Depository and Settlement Company (CDS) records the ownership of Mauritian securities via electronic accounts. When you ask a broker to open a trading account, they will send you a copy of the CDS Account Opening Form. After completing and returning it to your broker, you will be assigned a CDS account number. This number will accompany every Mauritian stock trade you execute, allowing the CDS Company to keep record of all your holdings in the country.
Step 2: Complete the Broker’s Account Opening Form
After your first email to the broker requesting information on how to open an account, they will also send you a blank account opening form, which is sometimes referred to as the “Know Your Client” or KYC form. Sample forms from a few of the brokers may be found in the above table. The form typically requires disclosure of your passport number or other ID number, your address, and asks for your preference regarding collection of dividends and payment of fees.
Step 3: Collect certified copies of your passport and a recent utility bill or bank statement.
Take your passport and a utility bill (not older than 90 days) to a notary and ask them to make certified copies. This will cost $5.00 or $10.00 per copy. The utility bill or bank statement will serve as your proof of residence. Note that cellphone bills are not acceptable for this purpose.
Step 4. Mail the original CDS form, account opening form, certified copy of your ID, and certified copy of your utility bill or bank statement to your broker.
You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation.
Step 5. Wire Funds to Your Brokerage Account
After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.
Step 6. Submit a Trade Order
You’ve done your research and found a stock that you’d like to buy. What now?
While some brokers will request a signed trade mandate form, for most brokers, all you need to do is send an email to your broker with your trade instructions. Keep in mind that some shares listed on the Stock Exchange of Mauritius are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.
Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes four business days in Mauritius, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.
An Important Note on Dividends
It is not possible to have stock dividends deposited directly into a Mauritian brokerage account. You must instead opt to receive a Mauritian Rupee denominated dividend check or open a Mauritian bank account to collect the dividends. Because the teller at your local Wells Fargo branch will probably laugh in your face if you ever try to cash a Mauritian Rupee denominated check there, your best option, unfortunately, is to open a Mauritian bank account.
Your broker should be able to assist you in connecting with a reputable bank and to help facilitate the account opening process. The CDS Company will be informed of your local bank details and will route all of your dividends there.
Follow these steps and you’re all set to begin investing in Mauritian stocks. That wasn’t too bad, was it?
The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.