Mauritius introduced a new range of incentives in the recent national Budget that will effectively make it cheaper and easier than ever for foreign nationals to invest in or live and work in Mauritius, including a reduction in the minimum investment limits and extending the duration of residency permits.
The changes, announced in the Mauritian national budget on 4 June 2020, have been designed to encourage foreign talent and investment to boost the country’s economy. They will see existing residency permits and related procedures simplified and extended, and more flexibility provided in terms of investments.
One of the highlights of the new measures, says Sovereign Trust consultant Ralph Wichtmann, is the halving of the minimum investment required to acquire an Occupation Permit (OP) – a combined work and residence permit that allows foreign nationals to work and reside in Mauritius under the three categories of Investor, Professional and Self-Employed – from USD100 000 (MUR1.7 million) to USD50,000. The USD40,000 minimum turnover and investment requirement for the ’Innovator’ category of the Investor OP is also removed.
The validity of an OP has also been extended from three to 10 years, and the spouses of OP holders will no longer require a separate permit to invest or work in Mauritius themselves. OP holders will also be allowed to bring their parents and dependent children aged under 24 to live in Mauritius.
The Residence Permit (RP) – for retired foreign nationals aged 50 and above – now only requires holders to transfer a monthly amount to Mauritius that is equal to USD1,500 from an account outside of Mauritius, or USD18,000 annually, down from USD40,000 previously. RP holders and Professional OP holders are also now permitted to invest in other ventures without any shareholding restriction.
Work and residence permits will be combined into one document; people who have held an RP for three years will be allowed to apply for permanent residence; and Permanent Residence Permits (PRPs) will also be extended from 10 to 20 years. The spouse of a PRP holder, as well the parents and any dependent children under the age of 24, are also entitled to residency in Mauritius over the same time period as the PRP holder.
There is a further ‘major concession’, according to Wichtmann. The Mauritian government has decided to allow OP holders to buy up to 2,100 sq m of land for residential use within ‘smart city’ schemes, subject to certain conditions being met. Previously, non-citizens could only buy homes in schemes that were specifically designated for foreign buyers.
“The changes to the requirements for the various permits and acquisition of land are clear incentives to make Mauritius more attractive to prospective investors, talented individuals and expatriates wishing to base themselves in Mauritius,” said Wichtmann.
South Africans looking to acquire immediate Permanent Residence in Mauritius by investing in a property scheme will also benefit, with the minimum purchase price being reduced from USD500,000 to USD375,000. This permit is valid for an initial 10 years and is renewable for as long as the investor owns the property.
Again, the spouse and dependent children under the age of 24, as well as the parents of the permit holder, are entitled to residency in Mauritius over the same time period as the permit holder, and it will no longer be required for non-Mauritian citizens and their spouses who hold a residence permit under the various real estate schemes, to also hold an occupation or work permit to invest and work in Mauritius.
However, an important change that investors should to be aware of is that the Mauritian Solidarity Levy will be applied to all Mauritian residents, and not just citizens, said Wichtmann. The Solidarity Levy is an additional 25% tax on qualifying income exceeding MUR3 million (USD75,000) per annum. However, the amount payable as a Solidarity Levy may not be greater than 10% of the qualifying income.
“These changes are aimed to assist the Mauritian economy, especially due to the economic impact that the Covid-19 virus has had and the potential aftershocks that are still to be realised,” said Wichtmann. “These measures will certainly support the Mauritian property market and assist Mauritian global business companies in meeting the economic substance test through the acquisition of Mauritian property.”
As part of Sovereign Trust’s range of services, we assist clients both in applying for the respective permits and, in conjunction with our trusted partners, to assist clients to relocate to Mauritius. This includes assisting clients to identify suitable properties for purchase, as well as opening personal bank accounts.
The Mauritian government also announced several changes for companies based in Mauritius. These include:
- An eight-year tax holiday for companies that manufacture pharmaceutical products, medical devices or high-tech products, provided the company started operating after 8 June 2017;
- The extension of the 15% investment tax credit to all manufacturing companies over three years;
- The full deduction on capital expenditure on electronic, high precision machinery or equipment and automated equipment, in the year incurred; and
- The accelerated depreciation on green technology equipment extended to include equipment and machinery used for eliminating, reducing or transforming industrial waste.
If you would like more information about any of these changes, please contact Sovereign.