@JumpCrisscross: "A portfolio of stocks and bonds held in a Mauritian entity costs a few tens of U.S. dollars of extra accounting costs to do taxes on a year; a portfolio in India held by a foreigner can easily cost hundreds of dollars for an American investor to comply with."

Yea, it's got nothing to do with extracting the maximum amount of revenue out of the host country whilst managing to avoid giving anything back in taxation :]