Invest in Mauritius: Why is it now the best time?

22 July 2020

Mauritius is a great place to live all year round with its perfect blend of breathtaking landscapes, quality accommodation, education facilities, healthcare system, sports and recreational amenities and shopping centres. One of the fastest growing african countries, it also offers a plethora of investment opportunities. It has earned high marks on several factors inducing investment in a country: high GDP, political stability, strong regulatory framework, bilingual and skilled workforce, low interest rate, foreign exchange, government policy, ease of doing business, favourable tax system… Several of these factors have been impacted during the recent months and has thus placed Mauritius as an attractive investment hub.

 

5 key factors encouraging investment

 

1. Low interest rate

The central bank of Mauritius has lowered the repo rate, from 3.5 in May 2019 to 1.85 in April 2020. A reduction in the repo rate is  generally synonymous with futur buyers getting loans at lower interest rates with commercial banks. According to the Housing Research Report of the MCB, 50% of property buyers contracted a loan to finance their current residence. Low interest rates therefore represent an ideal time to invest in a real estate property in Mauritius, both for Mauritians and foreigners.

 

2. Favourable budgetary measures (Budget 2020/2021)

Residence Permit holders

  • Permanent Residence Permit has been extended from 10 years to 20 years.
  • The minimum investment amount for a holder of an immovable property to obtain a residence permit will be reduced from $500,000 to $375,000.
  • The validity of the Residence Permit for Retirees will be extended to 10 years renewable.
  • Existing OP holders, who have held the permit for 3 consecutive years will be able to apply for the 20-Year Permanent Residence Permit.
  • Non-citizens who have a residence permit under the various real estate schemes will be exempted from an Occupation or Work Permit to invest and work in Mauritius.

Occupational Permit (OP) holders 

  • The minimum investment amount required for obtaining an OP will be reduced from $100,000 to $50,000 and the permit is now valid for 10 years, with possibility of renewable.
  • There will be no minimum turnover nor investment requirement for an Innovator Occupation Permit. 
  • Holders of OP as professionals can now invest in other ventures without any shareholding restrictions.
  • The minimum salary criteria of Rs30,000 will now be extended to other sectors (previously it was applicable only to ICT professionals). 
  • OP holders can now bring along their parents (as dependents) to live in Mauritius.
  • The spouse of an OP holder will no longer need a permit to invest or work in Mauritius.

 

3. Foreign exchange rate

With the impact of Covid-19 on various sectors of the economy – tourism, textile, manufacturing – there is a shortage of foreign currency resulting in the depreciation of our local currency (Mauritian Rupee). Investing in Mauritius now with foreign currencies such as EUR and USD, will represent huge savings for foreign investors thanks to favourable exchange rates. Buying a property in July 2020 as compared to January 2020, all other things remaining the same, represents a substantial savings of about 10%. A property worth Rs10,000,000 necessits now (July 2020) an investment of $250,000/ €220,800 as compared to $275,000/ €245,100 in January 2020. However it is to be noted that the Mauritian rupee has fundamentally been positive over the last ten years.

 

4. Ease of doing business

Mauritius ranked among the 20 best places (among 190 countries) to do business worldwide and 1st in Africa according to the latest World Bank Ease of Doing Business Report 2020, issued in October 2019. According to the same report, it ranks worldwide as follows on the indexes:

Starting a business – 21st

Trading across borders – 69th 

Moreover several other measures have been announced in the budget 2020/2021 to ease doing business and thus further increasing the competitiveness of Mauritius as an investment hub. The measures include: acceleration of the automation of public services, facilitation of registration of property, reviewing cost and procedures for construction related permits, facilitation of trade and review of port dues, review of our business-related legislations and business rules and alignment with international best practices.

5. Taxation

Mauritius has a favourable tax system and applies a 15% flat tax rate across the board (income, corporate and VAT). Moreover there is no capital gains tax, no inheritance tax, tax-free dividends and the country has also signed a Double Taxation Avoidance Agreements (DTAAs) with more than 40 countries.

In addition, it has also been announced in the budget 2020/2021 that a 8-year tax holiday will be granted for companies engaging in the manufacturing of pharmaceutical products, medical devices or high-tech products (any company starting its operation on or after 8th June 2017).

The prevailing economic condition and all the above mentioned factors have thus placed Mauritius as an even more attractive investment hub. 

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