For the first 11 years of the millennium, the Republic of Mauritius dominated foreign investment in India, contributing 39.5% of the total. That number remained the same in 2011, holding at 36%. It comes as a surprise that India, one of the favorite destinations for foreign investment, receives such a high percentage from a small island in the middle of the Ocean. Clearly, the reasons are not part of traditional economic competitiveness. There is first a demographic motivation: 68% of Mauritius’ population is of Indian origin. It is India’s greatest African diaspora, forced to migrate by the English to work the sugar plantations. The Indian population remained in Mauritius after it gained independence in 1968, but it maintains extremely close cultural, economic, and family ties with the homeland. Nevertheless, the primary cause of such a high share of investment is a bilateral agreement between the two countries. The DTAA (Double Taxation Avoidance Agreement) stipulates that capital gains be taxed in the country of fiscal residence of the investing company. Since the government of Mauritius does not impose any kind of capital gains tax, a massive amount of money poured in to the island, to take up residence. Many multinational corporations took advantage of the tax situation in Mauritius, but the flow has often come directly from India. There is also the illegal exportation of currency, through under-invoicing of exports. New Delhi has recently started negotiations with Port Louis, because the missed income from capital gains taxes has reached worrisome proportions. The Indian government is under pressure to impose restrictive measures to curb tax evasion, favorable treatment of multinational corporations, and widespread corruption, but talks with Mauritius have stalled in the face of the size of the phenomenon and the fragility of an Executive office unable to conclude such a delicate negotiation. The island is also a platform for India to invest in Africa. Mauritius has built itself a transparent legal system over the years that has made it a preferred destination for investors, without protecting itself through opaque systems like more famous tax havens. An independent judicial branch, an invaluable knowledge of English, and a consolidated democratic system have all allowed Mauritius to count itself among the most advanced African societies, with an financial management capability that is difficult to go without.