The island nation of Mauritius, already a top destination for tourists thanks to its exceptional range of lifestyle benefits and high levels of security, is carving a niche for itself as the leading business and finance hub of the Indian Ocean Rim.
Despite a poor global economy, Mauritius continues to attract both capital investors and businesses to its shores, reaping the benefits of radical policy changes. Moves to introduce a range of investor and business benefits, including low corporation taxes of 15%, an attractive 15% personal income tax rate and a bonus of no capital gains tax, have fuelled Mauritius’ success as an emerging market over the past few years. Mauritius is also fast becoming a major centre for offshore banking – already more than 400 financial institutions are represented here – boosting investor confidence.
The island nation continues to rank high in global polls measuring both business climate and quality of life. As Mauritius’ economy grows and more tourists discover its charms, everything from shopping malls and restaurants to state-of-the-art medical centres and private schools are being developed across the island.
Ranking high on the global stage
One-by-one, Mauritius is earning global awards across a range of fields – from business to politics to tourism – strengthening its position as the power hub in the region. Here are just some of the recent honours bestowed on the island:
Easiest place to do business in Africa: The World Bank Doing Business 2009 rankings place Mauritius No. 1 in Africa and second only to Singapore among small island developing states. Mauritius was rated Africa’s top regional reformer in a report that recognises governments which have carried out the most business reforms over the last five years. The World Bank report moves Mauritius up to 24th out of 181 countries measured on investment climate and the ease of doing business.
Most improved investment climate: Mauritius is the winner of the 2009 award for Most Improved Investment Climate, an honour that recognizes excellence and best practices in business and rewards those who have driven Africa’s rapidly transforming economy. The African Business Awards honour is sponsored by the Commonwealth Business Council and African Business magazine.
‘Best quality of living’ city: Mercer’s Quality of Living report ranks Port-Louis tops among 215 African cities based on 10 leading indicators including: economic environment, political and social environment, medical and health, public services and transport, consumer goods, schools and education, recreation, housing, socio-cultural environment and natural environment.
Climate protection: The United States Environmental Protection Agency honoured Mauritius with the coveted Climate Protection Award in 2009 for its efforts in environment protection, including a commitment under the Kyoto Protocol to speed up the reduction of greenhouse gas emissions.
‘Intelligent’ democracy: The Economist Intelligence Unit’s Index of Democracy ranked Mauritius top of the class in the African region for 2008. The Index, which measures the state of democracy of 167 states across the globe, ranked Mauritius 26th in the world. Its overall score of 8.04 has boosted investor confidence.
‘Competitive’ travel and tourism destination: The World Economic Forum’s Travel and Tourism Competitiveness rankings place Mauritius 4th in the African region and 40th globally, recognizing the island’s efforts to implement travel-friendly and business-friendly policies.
‘Most attractive’ offshore destination: Mauritius earned a spot in the Top 25 world’s most attractive offshore destinations in the A.T. Kearney’s Global Services Location Index.
Economic freedom: Mauritius ranks No. 1 in Africa on the Economic Freedom Index, according to The Heritage Foundation and Wall Street Journal. Overall, it ranked 18th out of 157 countries measured.
‘Best run’ government: Harvard University has declared Mauritius the best run out of 48 African countries measured in its prestigious Ibrahim Index of African Governance.
10 reasons to invest in Mauritius
- The world agrees: Mauritius has it all when it comes to welcoming investors, business and tourists. Here’s why:
- Location & time zone: Mauritius is located in a highly accessible location between the South Atlantic Ocean and the Indian Ocean and is in a convenient time zone for ease of business – only 4 hours ahead of the UK, 4 hours behind Asia and 2 hours ahead of South Africa.
- Economic resiliency: Mauritius is one of the very few countries worldwide to boast positive GDP growth throughout the global economic downturn. This continues a growth trend that had seen GDP 5-6% per year, thanks to progressive business and investment policies.
- Open for business: The government’s economic reform policies, including attractive tax incentives for business and investors, are accelerating growth and strengthening the island’s position as a major investment and financial centre.
- Competitive edge: The development of Mauritius as a world-class offshore financial and investment centre for both the private and commercial sectors positions the island to benefit from the emerging African and Asian markets.
- Eye on the budget: The government is committed to a fiscally smart operation, with the budget deficit now at 3.8% of GDP, down from 5.5%.
- Democracy alive and well: Investors have peace of mind knowing that Mauritius is home to a stable and democratic political environment – and has been for 40 years.
- Sunny and safe: The island is blessed with near-perfect weather, boasts minimal crime and high levels of personal security and is known for its friendly people.
- Focus on tourism: With tourism growth a high priority, insiders forecast a strong demand for villas in the rental market. The government plans to boost the number of tourist visits to 2 million by 2015, up from 1 million.
- Foreign ownership opportunities: Non-residents of Mauritius can buy and own full title to property in Mauritius in approved developments under the Integrated Resorts Scheme (IRS). Still in its infancy, the programme has already seen exceptional growth, with investors enjoying appreciations of 40-50% on IRS properties
- Residency bonus: The IRS programme offers several benefits, including no capital gains and no inheritance taxes and a low 15% income tax rate. Investors also receive a bonus of automatic residence for themselves and their immediate dependents.
Integrated Resort Scheme (IRS)
The Integrated Resort Scheme (IRS) is a government programme designed to encourage foreign investment in Mauritius and to boost the island’s growing tourism industry. Benefits for the overseas investor include:
Automatic residency for the owner and immediate dependents
- Low 15% personal income tax rate
- No capital gains tax if you sell
- No inheritance tax
- Easy flow of funds, thanks to a double tax treaty with 34 countries.
About the freehold property market in Mauritius
A strong economy and investor confidence have allowed Mauritius to weather the global economic downtown on all fronts, including real estate. In fact, the first resales of villas purchased under the Integrated Resort Scheme (IRS) have earned investors double the original selling price.
With tourist numbers on the rise year-round and a very low supply of luxury properties on the island for rent, experts predict that the high-end residential property market will continue to experience strong growth, bringing investors attractive returns that were not available until IRS was introduced.
Integrated resort scheme in brief
Under the Integrated Resort Scheme (IRS), foreigners can purchase freehold luxury properties such as villas, apartments and penthouses located in designated areas and approved by the government’s Board of Investment.
The minimum purchase price is US$ 500,000, with the owner receiving an automatic residency permit. The investor may live there himself, rent the property or sell it with no minimum selling price restriction. Funds from the sale and rental revenue may be repatriated.
Properties under IRS are sold off-plan, with several hundred units in luxurious lifestyle estates already sold across the island. Investors hail from the UK, France, South Africa, UAE, India and other countries.
Because luxury properties are in demand on the island, investment under the IRS programme is expected to bring investors attractive profits. This sector of the real estate market is expected to grow for the next 10 years.
Mauritius makes business sense
Mauritius has primarily been a beach destination but is increasingly positioning itself as a growing business and financial hub. Mauritius offers numerous fiscal benefits along with permanent residency.
Residency permit
A non-citizen who purchases a residential property under the IRS programme will receive a residence permit under the Immigration Act once the property is registered and payment of the fixed duty of US$70,000 has been made to the Registrar General.
The Income Tax Act 1995 defines resident as: Individual: a person who has his domicile in Mauritius unless his permanent place of abode is outside Mauritius or has been present in Mauritius in an income year for a period of, or an aggregate period of, 183 days or more or has been present in Mauritius in an income year and the 2 preceding income years for an aggregate period of 270 days or more.
Company: a company which is incorporated in Mauritius or has its central management and control in Mauritius.
Personal income tax
A resident of Mauritius will pay a rate of 15% on personal chargeable income. Taxable income is described as gross income less allowable deductions and the income exemption threshold.
Gross income includes: salaries, wages, annuity, pension, income from business, income from property, foreign dividends, royalty and interest.
Allowable deductions include: expenses related to the production of income, losses, bad debts, annual allowance (in lieu of depreciation).
A resident of Mauritius is entitled to an income exemption threshold which can deducted from income to arrive at the chargeable income, if any.
Capital gains tax
There is no capital gains tax in Mauritius, except in the case of a land subdivision.
Corporate and other taxation
Companies, trusts, trustees of unit trust schemes and non-resident partnerships are all subject to corporate tax at a rate of 15% on chargeable income.
Double taxation avoidance treaties
Mauritius has concluded 34 Double taxation avoidance treaties (Dtas) and it has several others under negotiation. The treaties aim to reduce the tax burden on foreigners in Mauritius and stimulate investment.
Want to know more?
For a full report about the Integrated Resort Scheme
and about IRS approved property developments, contact
International Luxury Real Estate
+44 20 7095 8701
