Mauritius Investment, Property, Business and Exports

Through its relatively new Financial Services Sector which has been established as a major pillar of its fragile economy, Mauritius is emerging as a clean, viable and useful financial platform for investment in Africa and India where it is already the leading foreign direct investor after the USA. Mon Choix Ecolodge is pleased to provide a “business and investment guidance service” to its clients during their stay and talk about real estate, tax, double taxation agreements and investment opportunities

INVESTMENT

(We help you invest worldwide with attractive financial benefits)

Jean-Michel de Senneville (ex. Mauritius Trade Representative in South Africa), owner and manager of Mon Choix Ecolodge is pleased to provide a “business and investment guidance service” (for a fee based on the nature and extent of the service) to his clients during their stay and talk about real estate, tax, double taxation agreements and investment opportunities in and through Mauritius where a thriving new Financial Services Sector is fast making the island a clean and strong financial platform for investment mostly in India, Africa and the Middle East.

On the one hand, Mauritius needs foreign direct investment to feed its own development as well as to develop its financial services sector (already contributing some 12,5% to its GDP) by expanding its investment overseas. And on the other, you may well find that you, as the investor stands to benefit from the island's relatively low and flexible taxation.

A large spectrum of investment opportunities exist in Mauritius where international financial experts operating within the parameters set by the Mauritius Financial Services Authority will also be pleased to guide you.

NEWS

1. Conference on "Mauritius Offshore" at Waldorf Hilton in London on 30th March 2010, jointly organized by the Mauritius Board of Investment and Euromoney.

2. Mauritius has recently signed a "Double Taxation Agreement" (Traité de non-double imposition) with Bangladesh and Egypt.

3. The one with Kenya will soon be signed.

4. Negotiations for one are under way with Nigeria and Zambia.

5. Interesting article (in French) on the positioning of the Mauritius Offshore Services by Eco Austral http://www.ecoaustral.com/interieure.aspx?rid=36&srid=179&rubname=OPINION_REGIONAL_BUSINESS_FORUM

Besides, This is a BRIEF of the various ways a FOREIGNER can legally

ACQUIRE IMMOVABLE PROPERTY, RESIDE and WORK in MAURITIUS. (NEWS: It includes the very latest information / criteria decided by Government in March 2010 and applicable as from April 2010)

NOTE: It is important for you to note that the info below has been gathered and presented to you as a guide and a service by the owner and manager of Mon Choix who will not and cannot accept responsibility for the accuracy of the information below. You are therefore advised to seek confirmation from an official source. However, it is good for you to know that this info is presented in such an explicit way as to eliminate any possible misunderstanding which has in the recent past led to much exaggeration from the stakeholders, inconvenience to foreigners and a number of pending court cases where "fraud of law" (the utilization of a law to by-pass another) can be proven. Please note also that the owner - manager of Mon Choix is a qualified Estate Agent and Property Developer who will be pleased to guide you and help you to invest, acquire property, reside and work in Mauritius.

First of all, let us be clear on the fact that a RESIDENCE PERMIT, under whatever scheme, has nothing to do with the right by a foreigner to acquire immovable property on the island.

There is only ONE WAY for the foreigner to be able to do so; and that is after having applied to the Prime Minister specifically for the permission to purchase immovable property and after having received his PERSONAL AUTHORIZATION. It is a fairly long procedure governed by a fundamental piece of legislation known as the Non-Citizen Property Restriction Act (NCPRA).

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However, there are currently TWO approved avenues whereby a foreigner can obtain the Prime Minister's derogation and personal authorization.

(A) The INTEGRATED RESORT SCHEME (IRS) – Investment Promotion Act 2000 - whereby a foreigner must purchase for a minimum of US$ 500,000 a property in one of the luxury government approved IRS developments. The property will be registered under the name of the (foreign) purchaser who will also be given (as well as his immediate family, meaning spouse or common law partner, child stepchild, lawfully adopted child under the age of 18 years, or above the age of 18 years and who is pursuing full-time course at an educational institution) a Residence Permit (which necessitates a separate application to the Prime Minister's Office) as long as he holds the title of ownership of this property. As soon as he sells the property, he (and his family) loose/s his/their Residence Permit. He can however sell his property and buy another one immediately and thereby retain his Residence Permit. Another condition is that for every transaction, the Purchaser pays a Fixed Duty of US$ 70,000 and the Seller a Land Transfer Tax of US$ 50,000 to the Registrar General (Government). It must be noted that a Residence Permit under the IRS scheme does NOT give the Resident the Right to Work (Work Permit). The registered Purchaser can be a Local Company or a Foreign Company (not a Category 1 or Category 2 Global Business under the Financial Services Development Act (FSDA) 2001, nor a Qualified Trustee under the Trusts Acts 2001). The Purchaser has the right to RENT his property through the IRS Management Company and is liable to a 25% Corporate Tax. All applications to purchase made to the Board of Investment is subject to a non-refundable processing fee of Rs 10,000.- per residential property. When effecting transfer of the property in the Purchaser's name, the latter having paid a Land Transfer Tax / Registration Duty of US$ 70,000 (instead of the usual 5% without VAT), he will be liable only for the nominal Transcription Fee and Stamp Duty of Rs 1,200.- The purchaser must also provide for an Agent's Commission of 2% (with another 2% payable also by the Seller) and Notary fees paid fully by the Purchaser. (The Notary Fees consist of 2% on the 1^st Rs 250,000, 1.5% on the next Rs 500,000, 1% on the next Rs 1m and 0.5% on the balance of the purchase price PLUS a Fee of Rs 2,500 and a 15% VAT on the Total).

(B) The REAL ESTATE SCHEME (RES) – Section 28 of The Investment Promotion Act 2007 - whereby a foreigner can invest any amount in one of the government approved RES developments. The property will be registered under the name of the (foreign) purchaser. Unlike the IRS scheme, a Residence Permit does NOT accompany the purchase and ownership of a RES property. Another condition is that for every transaction, the Purchaser pays a US$ 25,000 Registration Tax and the Seller a Land Transfer Tax of 5% (on Registration) to government. The registered Purchaser can be a Local Company or a Foreign Company (not a Category 1 or Category 2 Global Business under the Financial Services Development Act (FSDA) 2001, nor a Qualified Trustee under the Trusts Acts 2001). The Purchaser has the right to RENT his property through the RES Management Company and is liable to a 25% Corporate Tax. All applications to purchase made to the Board of Investment is subject to a non-refundable processing fee of Rs 10,000.- per residential property. When effecting transfer of the property in the Purchaser's name, the latter having paid a Land Transfer Tax / Registration Duty of US$ 25,000 (instead of the usual 5% without VAT), he will be liable only for the nominal Transcription Fee and Stamp Duty of Rs 1,200.- The purchaser must also provide for an Agent's Commission of 2% (with another 2% payable also by the Seller) and Notary fees paid fully by the Purchaser. (The Notary Fees consist of 2% on the 1^st Rs 250,000, 1.5% on the next Rs 500,000, 1% on the next Rs 1m and 0.5% on the balance of the purchase price PLUS a Fee of Rs 2,500 and a 15% VAT on the Total).

As a RES project CANNOT be on Leased Land from Government (“Pas Géométriques” on the SEASIDE), there is very little chance to find a scheme on “Private Property” directly on the sea.

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TOURISTS

... are allowed a maximum cumulative stay of 6 MONTHS, provided they hold a Return Ticket and they can prove that they have sufficient funds to look after their needs.

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RESIDENCE PERMITS & WORK PERMITS

... are granted to foreigners under FOUR schemes (and cancelled if the conditions have not been fully met after 3 years of operation).

(A) As an INVESTOR ... meaning a person (association, société, partnership or company) intending to (a) make an initial investment of at least US$ 100,000 and (b) carry out an economic activity generating an annual turnover exceeding Rs 4 million. An Investor is granted a Work Permit.

(B) As a SELF-EMPLOYED ... meaning a person who invests at least US$ 35,000 and is engaged in a professional activity generating an annual income exceeding Rs 600,000.- A Self-Employed is granted a Work Permit.

(C) As a PROFESSIONAL ... meaning a person employed by a company (société or partnership) under a contract of employment with a basic monthly salary exceeding Rs 75,000.- A Professional is granted a Work Permit.

(D) As a RETIRED NON-CITIZEN ... who makes an initial and annual transfer to his bank account in Mauritius of at least US$ 40,000.- A Retired Non-Citizen is NOT granted a Work Permit.

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COMPANIES

... (Local or Foreign) with a Foreign Director and/or Shareholder CANNOT purchase and hold immovable property in Mauritius.

(Note: In terms of the Budget Speech of 18 Nov'09, “Companies listed on the Mauritius Stock Exchange and having minority foreign shareholding “will” be allowed to acquire immovable property without prior approval.”

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RENTAL OF PROPERTY

Just like a Tourist rents a room in an Hotel, he is allowed to rent any other type of residence anywhere on the island. Although the Tourist would not be expected to rent a residence for more than the time he is allowed to spend in Mauritius (i.e. A maximum of 6 months per year) in terms of his Entry Visa (as stamped in his Passport), he can (in practice) have a 5-year contract with an option for renewal. However, if the matter is brought to Court and depending on the period of the contract, one would have to prove that the “lease agreement” is not in fact a “disguised purchase agreement”.

It is also worth noting that the LESSEE is legally bound to deduct 5% of the monthly rental and remit this amount on behalf of the LESSOR to the Mauritius Revenue Authority.

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The SALES PROCESS for IRS and/or RES

On request, we supply our clients with a detailed step-by-step process and we do guide, advise and accompany him/her from the time the Prospective Purchaser arrives in Mauritius until the Property is legally transferred and Registered in his/her name, including, site visits, location plan, site plan, choice of villas, floor plans and working drawings, structural alterations, schedule of finishes, common facilities, special facilities, conditions of sale, professional financial/Tax service, most beneficial Tax structure, company registration (if applicable), reservation agreement, deposit, bank account, power of attorney, Notary, Board of Investment, application to own property, application for residence permit, etc...

To experience the comfort and peace of Mon Choix, discover the real, authentic island and fully enjoy your Mauritius Holiday and Water-Sports at a most competitive rate, contact: dodoisland@intnet.mu

Mon Choix is Mauritius Island's (Ile Maurice) first internationally graded ecolodge at Vallée des Prêtres near Port Louis business, shopping & leisure centre and the sea. COPYRIGHT: A.R.Jean-Michel de Senneville. Underwater pictures are by courtesy and Copyright to: Mr Eugène Vitry.