Mauritius: Residency And Owning Real Estate In Mauritius

The sun shines and it is hot, the population is reputed for its kindness and hearty welcome, the country is beautiful and taxes are very low. Foreigners can now live in Mauritius, become permanent residents and purchase real estate. In this article, we will go over various possibilities open to non-citizens (of non Mauritius nationality) to acquire permanent resident status, either by working or investing there or just as retirees. We will also go briefly over the salient features of the Mauritius offshore regime.

The recently introduced concept of Integrated Resort Scheme (IRS) enables foreigners to acquire luxury residential property of international standing, with high-class amenities and facilities. Already most of the villas under the multiple schemes underway have been sold out even before completion! The amenities and facilities offered by some of them include golf courses designed by Ernie Els or Rodney Wright, marinas, individual swimming pools, catering, nautical and other sport facilities and wellness and health centres. Day-to-day management services such as security, maintenance, gardening, solid waste disposal and household services are also provided to the residents.

A minimum investment of US$ 500,000 is required, including the land and the construction, which enables the non-citizen, as well as his or her spouse and dependents under the age of 18, to obtain residency. The resident status shall remain valid as long as the non-citizen holds such immovable property. Owners also have the possibility of renting the property during his absence, professional management services being available under certain schemes.

Taxation of individuals is only 15% in Mauritius. There are no taxes on non repatriated income earned abroad, neither capital gains nor inheritance taxes.

Permanent residency status for a period of 10 years is granted after three years of occupation permit to any non-citizen, being an investor, a self-employed or a retired person, within the limits set by the law. Any application will be made to the Board of Investment and shall be processed within three working days. Upon obtaining the permanent resident status, beneficiaries will be eligible to buy immovable property, not only under the IRS but any villa, apartment or even commercial real estate of their choosing in Mauritius.

As a major International Financial Services Centre, the Republic of Mauritius attracts foreign investors, given its strategic location, excellent telecommunication facilities, political and economic stability, the adoption of a forward-looking and business-oriented approach, its dual legal system (Common and Civil law), strategic time zone between Europe and Asia and a well educated, efficient and bilingual workforce. It offers investors with modern products and services best suited for their needs in various sectors such as international commerce, consulting, tax planning, asset protection, wealth management, insurance and securities among others.

Any non-resident wishing to set up a company under the laws of Mauritius, but not active within the island, will incorporate a Global Business entity. It will either hold a Licence Category 1 (GBL1) or 2 (GBL2). A GBL1 benefits from the 33 double taxation agreements (DTA) Mauritius has established; it is taxed at the rate of 15 percent. Through tax credits, the effective tax rate can be reduced to zero percent. There is neither capital gains tax nor withholding tax on dividends and interest paid to non-residents. GBL2 are not subject to any taxation. It is equivalent to the IBC or offshore vehicle type.

The Trusts Act 2001 covers all trusts set up in Mauritius. A trust of which the settlor is a non-resident or holds a GBL1 or a GBL2 and of which all the beneficiaries appointed are non-residents or holds a GBL1 or a GBL2 shall be liable to income tax on its chargeable income at a rate of 15%. However, where such a trust deposits a declaration of non-residence within 3 months after the expiry of the income year, it shall be exempt from the payment of income tax in respect of that income year.

The laws of Mauritius also provide for the setting up of Private Trust Companies (PTC). They allow a greater degree of direct control by the original settlor over the underlying trusts than under traditional trust structures. They also allow for a cost-effective way for high net worth individuals to manage their assets over to future generations.

Mauritius is also a platform for collective investment funds such as mutual funds. As of today, there are more than 350 funds with a net asset base of over US$ 30 billion. The bulk of these investments is directed towards India, the People's Republic of China and South Africa. These funds can also be set up through a protected cell company structure for enhanced protection.

The author is Managing Director of AAMIL Ltd, corporate financial services provider. The Group is also providing trustee and asset management services. The offices are in Port-Louis (Mauritius), Geneva (Switzerland), Victoria (Seychelles), London (UK), Grand-Duchy (Luxembourg) and Mumbai (India).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.