January 27, 2023

The reasons to invest in Mauritius

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Just like Mauritius citizens, foreigners living here can invest in real estate. However, there are some takeaways to pay attention to before taking that road. As a Mauritian resident or a person who acquired citizenship through naturalization you may want to understand investment opportunities available for you. Here, you’ll learn about different investment options available in the nation. However, before that, get to know why you should invest in Mauritius.

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Merits of the Mauritius Residence by Investment Program

Some of the advantages of the Mauritius Residence by Investment Program include the following:

  • You can rent out your investment property
  • Your entire family is eligible for residency in Mauritius, including your spouse, parents, and adopted children who are below 24 years old or less. For the other parties to seek employment opportunities in Mauritius, they should have a valid occupation or work permit
  • The presence of international universities and schools
  • Secure and safe environment
  • Economic, social, and political stability
  • A transparent, regulated, and sophisticated financial center.

Most Suitable Investment Plans in Mauritius

If considering real estate investment in Mauritius, you must adhere to government policies regardless of whether you’re a Mauritius citizen by birth or a foreigner. Some of the real estate investment models that foreign investors can take advantage of include:

1. Property Development Scheme (PDS)

The PDS (Property Development Scheme) was RES before 2015. Mauritian citizens, foreigners, and diaspora people from the country can go for this scheme. The investors can develop residential apartments on at least one arpent of land but not more than 50 arpents.

The residential units are luxurious, offering the occupiers commercial facilities and high-class leisure amenities. They also call for daily management services such as security, waste disposal, gardening, and maintenance. 

There is no minimum amount required to purchase a PDS property. However, for non-citizens who want to qualify for residence permit upon the purchase, they must invest at least USD375,000.

2. Integrated Resort Scheme (IRS)

The Mauritian government developed the IRS (Integrated Resort Scheme) to attract foreign real estate investors. The luxury residential program attracts foreign investment while offering foreigners the opportunity to purchase freehold property.

You are free to buy any property under the existing IRS projects based on your budget. However, if you are a foreigner and want to qualify for a residence permit through IRS purchase, the minimum investment is USD375,000.

You will also be free to rent out the property or sell it and become tax resident in Mauritius. Another takeaway is that you won’t require a work permit or occupation permit as a non-citizen if the investment comes with a residence permit.

The Integrated Resort Scheme developments should also abide by these guidelines:

  • High-class leisure, commercial facilities, and amenities
  • Investors build residential estates on a minimum of 10 hectares
  • Contributing socially to neighboring communities
  • Management services such as maintenance and security

3. Real Estate Scheme (RES)

The government established RES (real estate scheme) in 2006, and it comes with a range of investment opportunities. Both citizens and foreigner investors can acquire a villa, duplex, penthouse, apartment, or any other residential property under existing RES projects.

RES projects usually stand on land with a surface area greater than 4221 square meters but less than 10 hectares. Just like IRS and PDS projects, a foreigner will be eligible for residence permit if they purchase an RES property for USD375,000 or more.

They can also rent out or sell the real estate and becomes tax resident. Once they receive the resident permit the work or occupation permit seizes to be a requirement.

4. Investment Hotel Scheme (IHS)

An investor can go for this scheme by financing a hotel project development. It will allow them to sell rooms, suits, and even villas or any amenity as part of the hotel.

The hotel can be on a leasehold or a freehold property that’s 1 hectare or more. All citizens, foreigners, and people living in the diaspora are eligible to invest in this scheme as long as they comply with the terms.

To invest in a stand-alone villa, you need at least US$ 500,000. However, for other HIS units, there are no minimum amount restrictions. The owner of the HIS property or any person acting on his behalf can stay here for only 45 days every year.

If the investment in the hotel unit or villa is USD375,000 or more, then a non-citizen owner will automatically qualify for a residence permit.

5. G+2 Scheme

The G+2 program allows foreigners to acquire apartments situated in condominium developments at least two levels above the ground. The minimum purchase price for a property under G+2 scheme MUR 6 million or an equivalent in other types of currency.

Foreign investors who acquire property exceeding USD 375,000 under this program are eligible for a residence permit. It allows them to reside in the nation together with their dependents as long as they remain the owners of the property.

6. Smart City Scheme (SCS)

Under the SCS scheme, an investor can go for luxurious residential units on freehold land with not less than one arpent. You can also develop commercial and leisure amenities in residential properties. 

The Smart City Projects encourage development of business in different industries due to its cosmopolitan concept. For instance, investment in biotechnology, education, ICT, health, logistics, financial, retirement village, or manufacturing among others.

The owner must provide maintenance, security, waste disposal, and gardening services, among others. The land, however, can be up to 10 hectares; under the RES, you can only develop six units. This scheme allows investors who own at least one arpent of land to combine their projects. The main restriction is that the combined project must stay within the 10-hectare rule. 

As a non-citizen, you qualify for a residence permit if you purchase a property under Smart City Scheme worth USD375,000 or more.

Venturing into Stock Market in Mauritius

Apart from venturing into Mauritius’s real estate market, one can also invest in Mauritius’s stock exchange SEM (opens in a new tab).

And for those who may be wondering whether it is safe to invest in the country or not, we have good news for you.

Mauritius is ranked 33 among 192 countries on the list of Investment Safety Rankings.

This proves it to be among the safest country in Sub-Saharan Africa. Almost everyone is eligible to invest as long as they fulfill the minimum amount required and follow other policy stipulations. However, an investor who intends to acquire a controlling stake in a company will require approval.

Now, if a foreigner wants to invest in the Stock Exchange of Mauritius, they need to create an account known as Central Depository & Settlement (CDS) through an authorized agent in the country. You will use this account to keep your shares, and it is usually similar to a brokerage account.

Everything in this venture is in English, which makes it easy for foreign investors to transact.

Investment Funds in Mauritius

Mauritius is one of the top jurisdictions in the creation and administration of funds in Sub-Saharan Africa. The country is renowned for structuring foreign investments in Asia and Africa, attracting investors and fund managers from different parts of the world.

Some of the things contributing to the booming fund market are favorable tax policies and treaties, flexible and quality legislation, political stability, excellent infrastructure, a reliable time zone, and skilled employees’ availability.

Investments funds in Mauritius structure into different structures.

These include a company, a trust, a protected cell company, foundation, limited partnership, or any other approved entity by Mauritius Financial Services Commission (opens in a new tab) (FSC).

The funds can be variable share capital under CIS (Collective Investment Fund) or fixed share capital, names as private equity funds.

Investors interested in investment funds in Mauritius must apply for authorization through a licensed management company in Mauritius.

Types of Investments Funds in Mauritius

  • Global CIS
  • Professional CIS
  • Specialized CIS
  • Expert CIS
  • Self-managed schemes
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Investing in Mauritius Advantages:

1. Favorable Tax Policies

Mauritius’ government wants to make the country a financial hub for both local and foreign investors. To ensure that this happens, they are encouraging them by offering low tax rates and exemptions. They include no tax on inheritance and dividends, no VAT (opens in a new tab) or customs duties on equipment, tax credits of 80% for Mauritius offshore companies.

Only 15% tax on personal incomes and company profits, and a refundable VAT of 15%.

Comparing these rates with other neighboring countries would prove to you that Mauritius is a tax heaven.

2. Free-Trade Economy

There is no foreign investor who would invest in any country if they feel that their money or wealth is not safe. Mauritius’ government knows this fact. Apart from ensuring paramount asset protection for all investors, they have also embraced a free-trade economy to encourage more people to invest in the country.

In the year 2013, a famous Wall Street Journal ranked Mauritius in 8th place when it comes to economic freedom prevalence. Also, the Board of Investment makes sure that setting a legal business in the country is as easy as possible.

Since the year 1992, Mauritius Free-port became a free-trade for all re-export products. The government has also facilitated opening a new counter in the port area to quicken the delivery of necessary foreign investors’ permits.

All this ensures that Mauritius becomes the logistical and regional zone for storage, distribution, and business conduction, serving south Africa, East Africa, and Indian ocean nations.

3. Social and Political Stability

Mauritius acquired independence in 1968, and since then, the country has always been politically stable. Since the colonization of Britain, the country’s political structure is substantially borrowed from the British Parliamentary model. They follow the democratic principles, separation of powers, executive and judiciary, and legislature. As noted earlier, Mauritian people are also friendly and welcoming.

The crime rate is very low, making it comfortable to invest in Mauritius without fear.

4. It is Strategic Location

Mauritius sits on the crossroad of Asia and Africa in the Indian ocean, and this geographical positioning makes it a reliable hub for commerce. It connects Asia, India, and Africa to other parts of the world. Its time zone, which is GMT+4, is also a convenient factor for business people.

5. Availability of Qualified and Skilled Labor

Mauritius’ literacy rate stands above 80%, and most populations can speak both English and French languages. Also, most young people in the country have an education, making it easy for businesses to acquire the right talents. Apart from studying in Mauritian universities such as the University of Mauritius (opens in a new tab), some will enroll in foreign universities to improve their training.

6. Economic Stability

One of the reasons why most foreign investors consider investing in Mauritius compared to the neighboring countries is its economic stability. The country’s GDP per capita has always been above $15,000, and the government, in collaboration with the Board of Investment, keeps on developing policies and legislation that maintains this standard.

For instance, starting a business within three days and investor protection (opens in a new tab) has greatly encouraged many people to invest in Mauritius.

They have also signed investor-beneficial treaties and agreements to uphold this protection.

These include the Multinational Investment Guarantee Agency, the 1958 New York Convention, and the International Center for the Regulation of Investment Disputes.

7. No Exchange Control

Strict exchange control is one reason why most potential foreign investors avoid investing in a given region — such control may lead to delay or loss of business deals.

Mauritius has put no such rules in place in an effort to encourage investors. It means that an investor is free to transfer dividends, profits, or capital to any other country without a hitch.

Reasons to invest in Mauritius – SUMMARY

As a foreign investor interested in Mauritius citizenship, you can take advantage of the Mauritius Residence by Investment Program. There are different schemes under this program, and we have delved into each of them in-depth above. As an investor, you can determine which scheme suits you best depending on your financial capacity and needs.

What are the best investment plans in Mauritius?

  1. Property Development Scheme (PDS)
  2. Integrated Resort Scheme (IRS)
  3. Real Estate Scheme (RES)
  4. Investment Hotel Scheme
  5. G+2 Scheme

What are the advantages of investing in Mauritius?

  1. Favorable Tax Policies
  2. Free-Trade Economy
  3. Social and Political Stability
  4. It is Strategic Location
  5. Availability of Qualified and Skilled Labor
  6. Economic Stability
  7. No Exchange Control

How to invest in Mauritius?

  1. Obtain a Citizenship Through Foreign Investment
  2. A Passport Through Foreign Investment
  3. Occupation Permit
Steven Author of gostartbusiness

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