Forged by volcanic activity, the island of Mauritius is located in the Indian Ocean approximately 2 000km off the southeast coast of the African continent. This popular tourist destination attracts visitors from around the globe was in fact uninhabited until 1638 when the Dutch Republic established a colony on the island. The Dutch named the island after Prince Maurice van Nassau. Although the Dutch abandoned the island in 1710, due to its strategic position in the Indian Ocean in relation to trade routes to the East, the French took over the island and established a colony five years later. A power struggle for the island ensued between the French and the British, with the French formally surrendering in 1810. The terms of the surrender allowed the settlers to keep their land and property, along with the use of the French language, and the law of France in criminal and civil matters. In 1968, Mauritius became an independent state and following the adoption of a new constitution, it became a republic within the Commonwealth in 1992.
Mauritius is known for its blissful beaches protected by coral reefs, clear lagoons and array of holiday resorts. But for investors, it offers so much more. While Mauritius is arguably one of the most popular holiday destinations in the southern Africa region, this country whose economy relied heavily on sugar production and export, has, in recent years transformed itself into one of the most successful economies in Africa.
In recent years, Mauritius has become hot property, thanks to its government’s wise decision to invest time, resources and money into changing and innovating the way in which it attracts and conducts business, both locally and internationally. This initiative has enabled the country to showcase itself as much more than just beautiful beaches and friendly people ideal for a tropical island holiday.
The Mauritian economy achieved success through gradually diversifying into the textile industry and then into the services sectors such as tourism, property development and finance.
Attracting foreign capital has always been a major objective in the country's economic development strategy, and therefore numerous advantages including tax incentives have been offered to foreign investors. So in addition to a strong, diversified economy are the fiscal benefits such as a flat 15% corporate and personal tax rate, the absence of inheritance and capital gains tax, no foreign exchange controls, trade barriers or quotas and no restrictions on capital repatriation. Furthermore Mauritius has a strong financial and off-shore sector; a stable political environment; modern and reliable IT and telecommunications infrastructure and a comprehensive legal framework, among others.
“Today Mauritius is truly a crossroad of international trade, having been colonised by the Dutch, French and British in turn. It also has a history that is heavily influenced by India, Africa and China with a multicultural and cosmopolitan population of around 1.2 million inhabitants,” says James Bowling, CEO of Monarch&Co, a company that specialises in citizenship through investment programmes. “The Mauritian government is closely modelled after the Westminster parliamentary system and the island is ranked highly for democracy as well as for economic and political freedom. It also ranks extremely highly in terms of business and quality of life, with an abundance of new facilities being developed all over the island from shopping malls, restaurants, office and factories to private schools and state-of-the-art medical centres.”
Bowling notes that over the past few years Mauritius has seen sound economic growth and has proven itself as an extremely successful emerging market. This has resulted in the island attracting a high level of investor interest through their Permanent Residency by Investment Programme. “The lifestyle offering and strong economic growth have enticed many investors to look at Mauritius as the next step in diversifying their investment portfolios and benefiting from what the country has on offer,” says Bowling.
According to Bowling there are three options for investors to choose from to qualify for the Residency Programme in Mauritius. The first option is the Permanent Resident Scheme (PRS), which is an ideal option for high net-worth individuals who want to stay in a country that is both versatile and potentially tax advantageous. The second is the Integrated Resort Scheme (IRS), which requires the purchase of a luxury residential property of international standard whilst the third option is the Real Estate Scheme (RES), which is targeted towards investors, retirees and professionals who want to invest, work and live in Mauritius or alternatively have a holiday retreat or second home on the island. In order to qualify for the Permanent Residency Programme, investors are required to make a minimum investment of US$ 500 000. In addition, Bowling notes that applicants must have no criminal record, be in excellent health and have a high personal net wealth.
So just what benefits are investors really seeing from their investment in Mauritian property? Bowling points out that not only is this a Dollar-based investment, but the SADC Property Allowance makes it an easy international investment option for South Africans. Added to this, Mauritius is one of very few global countries that continue to exhibit strong GDP growth and the country's economic performance has been further accelerated by a strong emergence of the financial services sector.
“There is no doubt that South Africans continue to find value - with sound investment potential - in residential property on the idyllic island of Mauritius,” says Bowling.
“Investors who wish to acquire immovable property in Mauritius under a residency scheme will be required to make an application for the status of resident in accordance with the Immigration Regulations 1973, in respect of themselves, their spouse and children. Once this application has been approved, a residence permit will be granted, allowing the applicants to reside in the country with no minimum stay requirements,” he notes. “The Residency Programmes offer South African investors the opportunity to become a resident of Mauritius, which enables them to enjoy both the economic and lifestyle benefits that the island has on offer,” Bowling concludes.