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* This content is brought to you by Brenthurst Wealth
By Gavin Butchart *
More South Africans are considering real estate investment and offshoring in Mauritius as the island continues to introduce changes to make it an attractive investment and residence choice, against the backdrop of the collapse of real estate investments on national soil.
Mauritius has started to ease restrictions with a phased approach and opened its borders last week to vaccinated travelers (for now, excluding South Africans) and will open more from October 2021 to travelers fully vaccinated, subject to a negative PCR test 72 hours before boarding, welcome vacationers, residents, investors and returning travelers to the island.
Unlike the local market, where property values ​​have largely stagnated and declined in many regions, in 2018 property prices in Mauritius were 133% higher than in 2010 and continue to grow.
The recent 2021/2022 annual budget presented by Dr the Hon. Renganaden Padayachy, Minister of Finance, Economic Planning and Development in June 2021 also seems to support the decision to ease the entry of foreigners and their families on the island with the Economic Development Board (EDB) qualifying this budget of “Better Together†and could potentially open up a whole new world for Mauritius and foreign investors.
Here are some of the highlights from the recent budget speech.
Gross direct investment (inflows) for 2019 was 21 billion rupees while for the first 3 quarters of 2020 (January-September) was 9 billion rupees, largely contributing to real estate and financial and financial activities. insurance. In terms of markets, France and South Africa represent the main sources of foreign direct investment flows, led by the United States, the United Kingdom, Switzerland, the UAE and India.
Mauritius lost 17.9 percentage points of GDP growth, contracting 14.9% in 2020. International projections for the country are optimistic, with a strong recovery expected in the medium term. The African Economic Outlook, released in March 2021, forecasts GDP growth of 7.1 percent on average for the next two years, while the IMF’s WEOs, released in April 2021, estimate a growth rate of 6.6. % for the year 2021.
Despite a depreciation of the rupee, the headline inflation rate for the year ending 2020 stood at 2.5% with a consumer price index of 106.1 in December 2020, while inflation overall for the 12 months ending May 2021 was 1.8%. The IMF’s WEO, published in April 2021, plans to resume an upward trend in the inflation rate to 2.6% in 2021.
A new strategy will be adopted by which Mauritius seeks to attract new talents by modifying the various permits offered to foreigners in association with the EDB and the MTPA to make Mauritius the preferred destination for retirees and long-term tourism.
The challenge Mauritius is currently facing is a stagnant population in recent years with a fertility rate of 1.4% and an aging population. This has resulted in a labor shortage and the country has no other choice to open up the skills and market strength to foreign nationals to invest, work and live in Mauritius. There are currently around 6,400 active occupancy and residence permit holders in Mauritius, representing only 4% of the resident population compared to Singapore (37%), New Zealand (22%) and Luxembourg. (47%).
Below are some proposed changes to Mauritius immigration laws which make it much more attractive to attract new talent, new investors to start / continue life in Mauritius.
|
Occupancy permit holders |
Current | Offers |
| OP was valid for 3 years (renewable) | Period of validity of the extension for Professionals from 3 years to 10 years. | |
| The same was proposed in the 2020/21 budget | Exemption from the application for a PO or a work permit for the spouses of PO holders investing or working in Mauritius. | |
| New proposal – The current restriction is 24 years | Removal of the maximum age limit of 24 years for dependents. | |
| New proposition | 10-year family occupation permit
for those who contribute $ 250,000 to the COVID-19 Project Development Fund. |
|
| New proposition | Implementation of a privilege club program (privileged access to hotels, golf courses, restaurants, private medical institutions, among others). | |
| New proposition | Non-citizens with a work permit as a professional will be able to change jobs without having to submit a new application provided the minimum criteria are met. | |
| New proposition | Non-nationals holding a PO as self-employed will be allowed to set up a sole proprietorship and to employ administrative staff. | |
| New proposition | The requirement for PO candidates to arrive in Mauritius with a business visa to be issued with a permit to be lifted. | |
| New proposition | A non-national who purchases or otherwise acquires an apartment used, or available for use, as a residence, in a building of at least 2 floors above the ground floor, provided that the purchase price does not not less than USD.
375,000 will be issued with a residence permit, including for their dependents, and exempt from the requirement of a work or occupation permit. |
|
| Permanent residence permit | Current | Offers |
| New proposition | Holders of a 10-year permanent residence permit will have the validity automatically extended to cover a period of 20 years. | |
| New proposition | Holders of a permanent residence permit will be able to renew their permit and will be able to change category between investor, professional and retiree. |
| Young Professional Permit | Current | Offers |
| New proposition | International students enrolled in a recognized educational institution in Mauritius
automatically benefit from: § A work permit of 20 hours per week. § A 10-year young professional occupation permit renewable after graduation. |
| Foundations and Trusts | Current | Offers |
| Extension | The Income Tax Act will be amended to ensure that foundations and trusts benefiting from preferential tax treatment comply with OECD standards, including substantial activity requirements. | |
| Tax holiday Asset / Fund manager | Current | Offers |
| Extension | Holders of a certificate issued as of September 1, 2016 will be exempt from tax on their emoluments for an additional 5 years while new holders of certificates will benefit from a 10-year tax holiday. | |
| New proposition | In addition, the $ 100 million threshold for the asset base managed by an asset / fund manager will be reduced to $ 50 million. | |
| Other taxes | Current | Offers |
| New proposition | Construction of factories specially designed for pharmaceutical and medical devices
manufacturing and clinical and preclinical trials: § Exemption from registration duties and property transfer duties. § Exemption from the land conversion tax. § Exemption from VAT on construction. Premium Investor Certificate for the manufacture of pharmaceuticals and medical devices to all companies. Full tax credit on patent acquisition costs for Biotechnology and Pharmaceutical companies. Companies engaged in the medical, biotechnological and pharmaceutical sector will be taxed at 3% instead of 15%. |
|
| Clarity on Premium Visa | Non-Mauritian nationals holding a Premium visa doing remote work from Mauritius and having stayed in Mauritius for 183 days or more will be taxed at 15% in Mauritius only if the income has been paid into a bank account at Mauritius. If income exceeds Rs 3 million during a fiscal year, an additional individual solidarity levy will apply from 10% to 25%, beyond 15%, unless a declaration is made by the holder of the visa that the income was taxed at source. |
Brenthurst Wealth has partnered with well-established developers in Mauritius, offering attractive commercial and residential projects specifically for South Africans looking to invest in the real estate sector without fear of expropriation of land and a high quality of life. Brenthurst’s branch in Mauritius, Brent Wealth, office offers a full investment service and can help you with permits, business structures and real estate investments.
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