With the current political and economic climate contributing to some of the highest levels of uncertainty seen for decades, many South Africans are considering emigration. But leaving South Africa can be a massive and costly undertaking, involving asset disposals, wealth transfers, exit taxes, complex residency applications, new registrations, employment, accommodation and schools – and there's always the risk that you or your family won't settle well in the country you're immigrating to.
The Mauritius Premium Visa provides a way for those who are considering emigration to experience what it would be like to live outside South Africa without having to go through the 'full' process.
The Mauritius Premium Visa
The Mauritius Premium Visa was created in response to the Covid-19 pandemic when the traditional tourism sector on the island was effectively closed due to travel and quarantine restrictions. It allows international visitors and their families to stay in Mauritius for up to 12 months to work remotely, retire or simply enjoy a longer holiday.
The Premium Visa is valid for a period of one year and is renewable. A Premium Visa is required by those who intend to stay in Mauritius for a period exceeding 180 days in a calendar year. For those staying for less than 180 days, a tourist visa can be granted on arrival to Mauritius. Foreign nationals staying in Mauritius under a tourist visa can apply for a Premium Visa during their stay in Mauritius.
Applications for the Premium Visa are open to those currently in Mauritius on short-stay visas and those based internationally who wish to relocate to Mauritius for the long term. Applying for a Premium Visa is a simple online process. An application will be processed within 48 hours and the e-visa will be issued via email. The Premium Visa is issued free of charge and there is no processing fee. (Premium Visa Application).
Premium Visa tax benefits
The Premium Visa is highly beneficial because specific provision has been made in the Mauritius Income Tax Act to enable holders to effectively pay little to no personal income tax once Mauritian tax residency is obtained.
Section 73B (1) of the Income Tax Act states: "Where an individual holding a premium visa derives income for work performed remotely from Mauritius that income shall be deemed to be derived by him in Mauritius when it is remitted to Mauritius." In other words, regardless of how much income is earned through remote work, only the portion that is remitted back to Mauritius will be taxable in Mauritius.
Section 73B (2) of the Income Tax Act states: "Where a holder of a premium visa spends money in Mauritius through the use of his (or her) foreign credit or debit card, the amount so spent shall be deemed not to have been remitted to Mauritius." In other words, funds accumulated in a foreign account can be expended free of tax in Mauritius provided it is spent via a foreign debit or credit card.
Section 73B (3) of the Income Tax Act states: "Where the holder of a premium visa deposits money in a bank account in Mauritius, he / she shall be liable to income tax on such deposits unless a declaration is made to the effect that the required tax has been paid on that income in his country of origin or residence." In other words, any income accumulated before Mauritius tax residency is established that has been taxed in its country of source can be remitted tax free to Mauritius.
Once the holder of a Premium Visa has spent 183 days in Mauritius, they will become a Mauritian tax resident. These provisions allow a Mauritius tax resident holding a Premium Visa to work remotely from Mauritius and manage their spending in such a way that all significant expenses are paid on foreign cards. If the funds remitted to Mauritius remain within the tax exemption limits – between USD8,000 and USD16,000 depending on the number of dependents – no tax will be due in Mauritius or elsewhere.
Mauritius as an immigration destination
Mauritius may not be the first name that springs to mind when South Africans consider emigration, but it does offer many benefits that more traditional destinations, such as Australia and the UK, cannot provide.
- It is far closer to South Africa – Mauritius is only a four-hour flight away if you want to pop back to visit family and friends in South Africa (less time than the drive from Joburg to Durban).
- The time zone in Mauritius is GMT+4, just two hours ahead of South Africa, which means it is very feasible to work remotely for a South African company while living in Mauritius.
- Mauritius is generally cheaper than other popular immigration destinations and the Rand still has some spending power when converted into Mauritian rupees.
- Mauritius personal tax rates are significantly lower than South Africa and far lower than other popular emigration destinations, and as explained above, a Premium Visa holder working remotely from Mauritius can pay no tax in Mauritius or elsewhere if they manage their finances correctly.
Beyond the Premium Visa
It is unlikely that the Premium Visa regime will be available long-term, and it is unlikely that current visas will be renewable indefinitely because the associated benefits are so great that it could undermine other residence programmes in Mauritius.
When a holder can no longer renew their Premium Visa, they will have two broad options: leave Mauritius and return to South Africa or elsewhere; or shift into one of Mauritius' permanent resident schemes.
Mauritius offers several highly competitive routes to permanent residency that can broadly be categorised into:
- Residency by Investment
- Residency by Occupation
- Residency by Profession
- Residency by Retirement
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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.