South Africa – the second largest source of real estate FDI into Mauritius

The inflow of foreign investment into real estate activities in Mauritius almost doubled in 2022, jumping from MUR8.9 billion in 2021 to reach an estimated MUR15.4 billion (USD34.5 million), according to figures released by the Bank of Mauritius.

Real estate activities accounted for more than half the estimated MUR27.7 billion foreign direct investment into Mauritius during 2022, and more than three-quarters of this total were directed into Real Estate Schemes governed by the Mauritius Economic Development Board (EDB) – the Property Development Scheme, the Smart City Scheme and the Invest Hotel Scheme.

In terms of foreign direct investment flows in Mauritius by geographical origin, South Africa was the second largest source of funds accounting for MUR3.1 billion in 2022, behind only France with MUR5.4 billion, and ahead of the United Arab Emirates with MUR2.2 billion and the UK with MUR1.3 billion.

The Property Development Scheme (PDS), which has replaced the Integrated Resort Schemes (IRS) and Real Estate Schemes (RES), allows the development of a mix of residences for sale to non-citizens. The EDB maintains a list of approved developments.

A foreign investor is eligible for a Residence Permit upon the purchase of a qualifying residential property under the PDS scheme when he / she has invested more than USD375,000 or its equivalent in any freely convertible foreign currency. Non-citizens with a Residence Permit under PDS will be exempt from the requirement to obtain an Occupation or Work Permit to invest and work in Mauritius.

The property can be purchased through a trust, company, foundation or in an individual capacity. If the property is purchased through a structure an individual can be nominated to become the permit holder.

The holder of the Residence Permit is entitled to residency in Mauritius for as long as the property is owned. Dependents, comprising the spouse, common law partner of the opposite sex, children and parents are also eligible for a permanent residence permit.

The ‘Smart City Scheme’, which was introduced to encourage the development of mixed-use developments in conurbations with smart technology and pioneering innovations, has also been amended. The threshold for investment has been reduced from USD500,000 to USD375,000 to qualify for a Residency Permit. The EBD maintains a list of approved developments.

It was further announced in this year’s Budget in June that the current restrictions governing property acquisition by non-citizens outside the PDS and Smart City schemes are to be relaxed.

Foreign nationals who are the main holder of a Residence Permit or Occupation Permit will now be permitted to purchase a single residential property in Mauritius outside the pre-established schemes provided that the price of the property exceeds USD500,000 and the area does not exceed 1.25 acres. The transaction will be subject to the payment of an additional registration duty of 10%.

Residence permits will also be granted to retired non-citizens and their family on the acquisition of a property in a PDS project relating to senior living provided that the acquisition price exceeds USD200,000 and the non-citizen is aged over 50. The status of resident will remain valid for as long as the buyer holds the property.

The government also announced that the introduction of a new Sustainable City Scheme, in addition to the Smart City Scheme, where it is expected that there will be new regulations and a lot more sustainability requirements. Non-citizens will be able to acquire a residential property in a sustainable city and be eligible for a residence permit for a minimum acquisition price of USD375,000. The status of resident will remain valid for as long as the buyer holds the property.

For foreign nationals who do not have USD375,000 to invest, Mauritius offers a number of alternative residency routes via a rage of Occupation Permits – Investor, Professional or Self-Employed – while retired non-citizens over 50 years in age can apply for an initial ten-year Residency Permit provided they have a pension or investment income from outside Mauritius of USD1,500 a month or USD18,000 per year that is paid into a Mauritian bank account.

Mauritius offers several benefits to South Africans considering relocation. Despite being an island in the middle of the Indian Ocean, Mauritius also offers a high standard of living, a modern infrastructure, and is only a four-hour flight from South Africa, which means that emigrees can more easily maintain their existing social connections and regularly visit family and friends.

While both countries share a warm climate and immense natural beauty, Mauritius offers an improved quality of life. It consistently ranks high in global indices for safety, education and healthcare, while the crime rate is significantly lower than in South Africa. Mauritius is a multicultural society, with English and French being widely spoken, makes it easier for South Africans to integrate into the vibrant expat community on the island.

The island also offers several attractive tax benefits. Mauritius boasts a low corporate tax rate of 15% and does not impose capital gains tax or inheritance tax. It has signed numerous double taxation treaties with countries, including South Africa, to prevent individuals and businesses from being taxed twice on the same income.

Mauritius also offers the Premium Visa, which allows foreign nationals to visit for a long stay as a tourist, a retiree or a professional who is willing to come with their family and work remotely from Mauritius. It allows a non-citizen to stay in Mauritius for a period exceeding six months up to one year with an option to renew.

“Careful planning and research can pave the way for a successful move. South Africans looking to relocate to Mauritius can use the Premium Visa to explore the potential of Mauritius and familiarise themselves with all the different entry options,” said Richard Neal, Managing Director of Sovereign Trust (Mauritius) Limited.

As a South African expat who has been living and working on the island for the past 18 months, Richard has first-hand experience of the transition from South Africa to Mauritius.

“You need to realise that life is a bit slower on the island but that everything you need is readily accessible,” he said. “It takes a bit of time to become accustomed to the safer and less confrontational living environment. Not once have I felt threatened or much less unwelcomed in Mauritius. Everyone gets along and just wants to have a good time.

“With offices in both South Africa and Mauritius, Sovereign is perfectly placed to assist South Africans with obtaining the appropriate visas and advising on the full range of investment and real estate options that are available for non-citizens,” he added.