Madrid Diaries – First few months in Espana

Image result for madrid

It’s been four months since I moved to Madrid. I’ve never fallen this hard for a city before. It’s a weird feeling. Most of it is personal, I feel that Madrid is my very own, carefully packaged, personalized gift from the Universe. It’s like at 31, it’s the answer to my eternal question “So is there more to life than this?”. It’s no secret that 2016 had me dealing with a huge, life-changing blow which annihilated all my life plans and had me questioning everything – divorce. On the bright side, that ordeal made me realize that I had a rock solid support system made up of my family and friends. It also made me re-discover spirituality through meditation. And it forced me to tap into my inner strength, and re-invent myself as a person. There is nothing as powerful as the willingness to rediscover happiness. And just like that, Life gave me a silver lining – a job in Madrid.

I did Learning Spanish 1 at university 10 years ago. At that time, it seemed like an easy way to get good grades and understand Shakira songs. And I absolutely loved tapas and paella. Little did I know that these would actually come in handy 10 years later. With my biligual English/French, and some Hindi speaking skills, I never found communicating in foreign countries particularly difficult, until I came to Madrid. It was strange to realise that there was a whole world out there, about one third of the world’s population according to locals, who did not care the slight bit about hablar Ingles or speak English (Speaking English was discouraged under the dictatorship of General Francisco Franco, so many people from the older generation speak zero English). So, out of need to make myself understood in the bus and in the supermarket, and out of respect for the culture, I am seriously learning Spanish. Even if mi espanol es muy basico ahora (my spanish is very basic at the moment), one of my goals for 2017 is to considerably improve it. It may be close to French but Spanish people speak very quickly and have an accent. And some of the letters (“v”, “c” and “j”) are pronounced differently. It’s lovely to listen to, but without practice it’s hard to adopt. A few useful words I have picked up so far, which Spanish people use often is Vale (OK) and Claro (Of course). Oh and particularly useful for ladies visiting Spain, Guapa means “Pretty” or “Beautiful” šŸ˜‰ .The best way to learn is language exchange groups where you speak English for some time for those who want to learn English and the rest of the time they help you with your Spanish. I have never realized it before, but it took me 15 years of classes, reading, movies, television, and speaking to master English and French. Picking up a completely new language at 31 is proving to be hard, but it’s a welcome challenge. I’ve been telling myself that watching Narcos helps, as half of it is in Colombian Spanish. I don’t think I will be using La Puta de tu Madre anytime soon in my everyday conversation, but it’s fun to decipher the Spanish words in the series. I’ve also resorted to reading to improve my vocabulary and grammar (yes the verbs and tenses are as bad as in French) – bilingual Spanish-English books are very helpful. But the best way is to just go out there and speak to people, and not care about the risk of making a fool of yourself. Spanish people are very nice anyway.

Spain is a world in itself, with rich cultural history. There are many Latin American people in Spain, the obvious consequence of Spain having previously colonized these countries. People love and hate Christopher Columbus, depending on the region.Spain has its very own ski resorts, beaches, party islands, mountains, parks, you name it. Most people have no idea where Mauritius is. And there are not many Indian people in Madrid. So I mostly walk around feeling very exotic, which is something I never felt when I was living in the U.K.

In terms of political history, Spain has got its own issues for example with Basque and Catalan separatists. The country has been “run” by a fragmented parliament for the last couple of years (and has still been able to achieve economic growth). One of the biggest problem the country is having to tackle is the high unemployment rate (20% in 2016). And that is despite the fact that Spain has got many award-winning universities and that the average Spaniard seems to be well educated. According to locals, this is mostly due to the Spanish lifestyle.

“For Spaniards, work is just something that needs to be done in between tapas”. This is something I read in El Pais newspaper, in an article about youth unemployment. True and not true, in my humble opinion. By the way the siesta is a myth, which does not happen in Madrid work life. Madrid is far from a financial capital. Banking may be big, but it’s nothing as compared to a place like London. For those with office jobs, work starts at about 09 00 – 10 00. Lunch is at 14 00 – 15 00 (still getting used to that), and depending on work loads, finishes at 18 00 – 19 00. Then Spaniards usually have a light dinner at 22 00 – 23 00 then go to bed at about 00 00 – 01 00. Madrid is a nocturnal city, going out, having drinks and tapas is an essential part of the lifestyle. The metro is very clean and efficient and runs till 01 00 and even later on Friday and weekends.

Football is a big part of the life of Spaniards, especially Madrilenos. Most people prefer to support Atletico de Madrid or FC Barcelona over Real Madrid as the latter is the obvious winner and it’s no fun to support such a team. When there is a match, roads are closed, the Guardia Civil oversee the crowds on horseback and the atmosphere is electric.

Madrid has a rich cultural scene with an impressive number of museums, the entry to some of which are free on certain days. Drinks are cheap with a the price of a glass of wine, sangria or cava (sparkling wine) ranging from EUR 2.50 to 5.00. Drinks are meant to be had leisurely with tapas (small portions of food or starters) before the actual dinner. Most of the time the tapas by themselves make me full, so no need for dinner. Free concerts, exhibitions, street artists are everywhere. It is a great place for those who are on a budget and culturally curious. This is why Spain is a favourite tourist destination for lower middle class / middle class Europeans. It is a relatively cheaper destination, and you still feel a real change of scenery.

Another thing I’ve noticed is that Spanish people are very serious about deportes (sports). Parks, gyms and running tracks are everywhere. Spaniards pay special attention to their grooming and physical appearance. I’ve realized that Spanish people have dark hair and chiseled features because of Arab influences. Eye candy everywhere :)) The average Spaniard invests a considerable amount of time in their hobby, whether it is skating / surfing, bailar (dancing, especially salsa), hiking or playing a musical instrument.

Spaniards also love their pets and take them out for walks three times a day. I’ve seen all kinds of dogs from dalmatians, Chihuahuas, huskies (my personal favourtie) and St Bernards. Madrid Ayuntamiento or City Council is very well organised in terms of recycling and cleaning, being one of the justifications of the high rates of local government taxes.

Many people fall in love with the Spanish way of life, explaining the phenomenal number of expatriates in Madrid – Europeans, Americans especially, looking to flee their stressful home cities for a better, more balanced lifestyle. After four months in Madrid, I have to say, I totally get it.

“It is not a sin to tax less”

I have not written in a while. But Financial Secretary Dev Manraj’s speech in the 8th Asia/Africa IFA Conference made me want to write again. Finally, an advocate for the Mauritius IFC speaks out loud and clear. Pity Indian (or for that matter, Mauritian) journalists were not here to listen. “Is it a sin to tax less?” he asks, “It is not because of a few accidents that we have to scrap the motorway,” “Are they protecting their own rights and preventing us from climbing the social ladder?” “When people think we are a rogue nation, it hurts us,” “India can now stand on its own two feet. How? By money coming in through Mauritius, it is Mauritius that helped towards India’s rapid development,” “Don’t kill us off with bad publicity” …

It has never struck me more how much taxation, and all the debate around it, was a political issue. It was highlighted by Dr Rama Sithanen during the conference that it is perhaps not a coincidence that international tax developments / issues such as Base Erosion and Profit Shifting (“BEPS”), Transfer Pricing (“TP”), US FATCA, and GAAR Provisions came at the forefront of global agendas just when most of the G20 countries were crumbling under debt and the financial crisis was unraveling. Below is the Hitchhiker’s take on the so called tax issues international organisations have been lamenting about for the past decade or so.

Will Pay Taxes


The core issue here is globalisation. We live in a global world, intelligent businessmen have figured out that, by shifting production elsewhere, they could enjoy cheaper labour, cheaper land, cheaper facilities, and thus make more profits. The global community became so interconnected that it was soon realised that more cost optimisation could be achieved by shifting profits “offshore”. This can be viewed as an outsourcing of services: secretarial, accounting, management, administration, consultancy. The small jurisdiction gets administration fees, young graduates are happily employed in “finance”, multiplier effect for the economy, the businessman is saving money, everybody is happy. But now, boom! G20 countries are heavily indebted and they realise that their only salvation lies in plugging tax loopholes: making sure that the Taxman is not missing on any collectable cent, and even going to the extent of making the noncollectable cent become tax money due! So the OECD and co. ( which are incidentally funded by the G20 “rich” club ) have started massive campaigns against what they call “aggressive tax planning”.

OECD defines BEPS as BEPS (Base Erosion and Profit Shifting) looks at whether or not the current rules allow for the allocation of taxable profits to locations different from those where the actual business activity takes place, and what could be done to change this if they do. But really, take Google, Apple, Starbucks. How do you allocate profits when the copyright belongs to one country, the manufacturing in another, the customer base in another? Professor Philippe Malherbe asks if sovereign tax rates are still applicable in the global era of today. Isn’t it time to think about some form of “global” tax rate? A utopia, you say? For now, maybe…

In a very interesting slide, Caroline Silberztein quotes ā€œMultinational corporations, stateless incomeā€ by Sinclair Davidson ā€“ RMIT University (Australia): is the corporate tax base really being eroded? The paper shows that corporate income tax rates have reduced quite substantially over time – yet corporate income tax revenue has not: the average OECD corporate income tax rate has decreased from 50.5% in 1983 to 29.6% in 2010; yet, revenue collected from the corporate income tax as percentage of the GDP increased from 7.6% in 1981 to 8.6% in 2010. So what is all the fuss about base erosion?


Uncle Sam

Oh well, what can I say about FATCA? It makes me think of the big octopus state of Uncle Sam spreading its tentacles all over the world. Cumbersome reporting requirements, criminal offense for non compliance, suspicious software being installed all over the world. Soon, the only place one would feel really free from the prying eyes of the IRS would be on Mars.

Tax Havens

First of all, how DUMB are NGOs like ActionAid and Oxfam? Or more importantly, how dumb do they think people are? I have been racking my brain to see the connection between tax havens and poverty in Africa. Say, Mr Rich Guy decides not to pay heed to his tax planner’s advice and pays his taxes to the IRS or to HMRC fair and square. Where in the world is the guarantee that this tax money is going to Africa to “help the poor”, especially when these countries are themselves sinking in debt by the minute? In my opinion, this is a huge PR campaign (of very bad taste) to prepare the world for FATCA, BEPS action plan, and whatever comes next. Mauritius and other targeted IFCs are mere collateral damage in the process.


The issue of substance is a fleeting concept. A walk in Ireland would make you think you are in Silicon Valley. It is not an issue to prove that management and controlĀ emanated from an IFC, especially in today’s era of interconnectedness. Board meetings, place of registration of company, office premises, qualified employees. You name it, the IFC has it. Will the Taxman stop the definition of “Substance” here? Let’s wait and see…

What should Mauritius do?

What does not kill us will make us stronger. The only thing we need is to know where we want to go and have the political will to stand by it. Switzerland or Singapore did not get to where they are today by bowing down to international pressure. The opportunities other than focusing on taxation treaty benefits abound. We must get the fragile balance between sound regulation and competitiveness right. If India decides it no longer needs us, so be it. Africa is rising, and it is starving for capital…

Disclaimer: This post reflects personal views only.

Satyamev Jayate Episode 1 – Female Foetecide


For once, I thanked my Behenjis for their efforts in making me learn Hindi. I just finished watching Satyamev Jayate on youtube and had to use several tissues to wipe tears from my eyes. Objectively, a nice philanthropic effort from Amir Khan. The research and the real life cases of the victims of female foeticide in India were real eye openers for a problem that society has long ignored. How can mother in laws, themselves being women, force their daughter in laws to abort female foetuses? And in much of the cases subject to force or extreme violence? (one of the victims’ mother in law pushed a new born premature baby girl down the stairs to try to kill her, one mother expecting a daughter had her face badly bitten, another one was made to abort 6 times without her knowledge) How can the notion that a male foetus is a much better prospect than a female one be so deeply enshrined in people’s minds that they don’t mind going to incredible levels of cruelty to achieve that goal? I can understand that in the Stone Age, the men were the food gatherers, that they were physically more strongly built than their female counterparts, and that some decades back, only men used to be money makers in families. But hello we are in 2012. In my circle, most of my female friends earn more and have achieved more, or at least as much, as my male friends. At university, and at school before that, it was a known fact that the girls were more academically intelligent than boys. And as for the matter of physical strength, we no longer live in a society where we have to hunt for food. Actually, in my opinion, the whole notion of masculinity is kind of overrated in the time where we live in. And I am not saying that only because I tend towards feminism. I mean, if you ask me to name male actors that portray virility, I would have trouble coming up with more than a couple of names (actually the only two that come to my mind are Sunil Shetty and Daniel Craig). I mean, let’s get real. David Bekham. Ryan Gosling. Leonardo Di Caprio. Justin Timberlake. John Abraham. Shah Rukh Khan. Metrosexual much??? Just have a look at what’s trendy for male models on Fashion TV: nicely chiseled androgynous faces!!

To get back on topic, female foeticide is so cruel it makes my heart ache. And it is an equally alarming practice in China as well. Cheers to Amir Khan for having used his stardom to sensitise people on the subject. Strictly on the TV show, I thought it was well brought together, you can see that lots of research were put into it. True to India, having most members of the audience cry, added a “sensationalisation” aspect to the show, but then again that’s India where people usually cry even at children dance contests. To complete the debate, I would have personally liked to also watch an interview of one of the bad guys, one of the pros of female foeticide. I guess that might have either been too difficult to obtain, or the show’s objective was not to have a balanced debate. But it would have helped its credibility, sometimes most people live in their own cocoon and have trouble believing that such cruelty exists. Well sensational or not, Satyamev Jayate is a must see, and I will certainly watch the next episode.

Hitchhiker’s Guide to Offshore Industry in Mauritius

ImageMost of you not working in the Offshore industry must have one day wondered, either from a newspaper article, or a fancy money laundering plot in a movie, what does Offshore really mean. Those of you outside Mauritius must perhaps be viewing it with a suspicious and curious mind while those of you in Mauritius must be thinking that working in Offshore must be a great way to earn loads of money quickly. Well… yes and no. This year I will (finally!) have worked 3 years in the offshore industry, and I should be in a better place to tell you more about it. I feel that this should be documented, as I have never read anything anywhere about offshore from the point of view of a critical, curious, gold-digger, not-keen-to-work-too-hard, feel-superior-than-everybody 26 year old point of view…

I started to work in the Offshore industry because it seemed to be making a lot of money back in 2009 and they offered to pay some expensive professional exams for me and I had nothing else better to do. You must understand that, in my opinion, for a young professional in Mauritius, most of the time, from my 5 years working experience, you either choose to do a boring and stressful job and earn loads or risk everything and do your dream job, but then you can afford only a dalpuri (cheapest street meal there is) for lunch (OK maybe I am being a little satyrical, but believe me, this is not that far from the truth from my point of view). So in Mauritius, most ambitious social ladder climbers either opt for working in banks, big financial institutions such as insurance companies, or (here we go!) offshore management companies (OMCs or MCs in Mauritius slang). We have the big huge ones which employ hundreds of people, where it takes you lots of sleepless zombie years (approximately 10) and sucking up to become a manager, and there are smaller ones which employ dozen of employees where they hire people with experience from the bigger MCs at more or less the same pay, but with fancier titles so that these gullible people receive a (false) sense of achievement of having climbed up the hierarchy, but do they really?

So what do all these people actually do all day? Offshore products range from companies (domestic or foreign), funds (open and closed ended), trusts, societes, and more recently in Mauritius, partnerships. The usual team structure in MCs is made up of administrator, senior administrator, team leader, manager, senior manager, head of X Product, Director, etc… And then there might be fancy shared services such as business development, product development, tax planning etc. So what do they DO?? Ok, I am getting to that part! They come to the office at 08 30, get a huge cup of coffee, and set about administering a portfolio of offshore products: filing with the authorities, drafting of financial statements, payment of regulatory fees, liaising with the clients, chasing them to pay their fees, investing the clients money, buying posh villas and maintaining them, holding board meetings with corporate directors and drafting endless minutes of meeting, and in the best case scenario, making sure that everything is financially and legally sound. This can range from really interesting structuring of investments to reallyyyyyyy boring paperwork, depends on the days, really.

So what about money laundering? Well, I would like to point out that money laundering is a serious crime, so we do not do it šŸ˜› We do something called enhanced due dilligence, which means making sure that we know our client, and especially their source of funds. Local regulatory regulations are quite stringent, especially after political and popular pressure from India. But some structures are so elaborate and so spread out across the world that one cannot assure you that they can be 100% convinced of the source of funds in certain cases, but legally it is the very first administrator who cashed in some shady funds without ascertaining the source who is to blame.

Mauritius is a lucky country, we are friends with everybody – Africa because of our strategic position, Europe because of our being past British and French colonies, and most importantly, India, our beloved mother India – because most of our ancestors come from India, we love Bollywood, our grandparents wear sarees and speak broken Hindi dialects, our food, our culture, our TV channels all are very much India-centric. Yes I am coming to it, we have enjoyed the benefits of the India double taxation treaty (DTA) for decades now. I am pretty sure that the offshore industry in Mauritius has largely fed off and developed from the India DTA. This means that Indian people find ways to invest all of their money in Mauritius companies and thus pay much lesser taxes than what they would have paid had it stayed in India. HOWEVER, the Indian government is now realizing how much it is losing in taxes through this DTA, and it is a sure thing that they are going to eliminate it anytime soon.

So what will happen to the Mauritius offshore industry then? It is an industry which has fed off the friendly diplomatic ties and regimes the island has enjoyed since independence. But this is not sustainable, as we will soon witness with the India DTA. What then? Will the thousands of Mauritian youngsters lose their jobs? Maybe… But let’s hope not. We dream of a day that “Mauritius will be to India what Monaco is to France” or what Cayman Islands is to USA or what Jersey is to UK… What about being the bridge between Asia and Africa that we have heard politicians speak about ever since we were kids? Singapore, Marshall Islands, even Seychelles are tough competition. We need to build on expertise, find niches, and grow sustainably. Let us hope that the business leaders will act now.