The fast-growing and crime-free island nation of Mauritius is a good alternative for high net worth South Africans, says Brenthurst Wealth.
Speaking via the group’s ‘Strictly Business’ podcast, Gavin Butchart, a financial director at Brenthurst Wealth, said that Mauritius is good country for investors looking to diversify, particularly due to it’s attractive tax bracket with individuals and companies paying 15% – with no dividends tax, capital gains tax or estate duties.
The podcast discussed Mauritius, its advantages as an investment destination, as a place to live, and what South Africa can learn from the fastest growing African economy.
Citing a world bank report, Butchart, who lives in Mauritius, said that the country ranks highly for ease of use for doing business.
Advantages of moving to Mauritius include, economic growth, good schooling, low crime rates, and is politically stable, Butchart said, noting also that the country’s unemployment rate is below 7%.
To gain permanent residency, a person would need a minimum of $500,000 (R7 million). “That will get you permanent residency,” Butchart said.
He noted that there are additional means of entering the country – namely a retirement non-citizen permit, and a foreign investor permit.
Popular avenues of investment for foreigners looking to invest in Mauritius, and obtain residency, include:
- Occupation Permit (OP) – a combined work and residence permit that allows foreign nationals to work and reside in Mauritius through an Initial investment of $100,000 in a business activity that should generate an annual turnover of at least MUR2 million (circa $58,000) for the first year and cumulative turnover of at least MUR10 million for the subsequent two years.
- Residence Permit (RP) – a residence permit that allows foreign nationals to reside in Mauritius through the acquisition of a residential property under the Property Development Scheme (PDS) when he/she has invested more than $500,000 or its equivalent in any freely convertible foreign currency.
- Permanent Residence Scheme (PRS) – foreign nationals investing more than $500,000 into the Permanent Resident Investment Fund (PRIF) for a period of 10 years are eligible for permanent residence, along with their spouse and children under 18 years of age. For children over 18, an additional deposit of $100,000 per person is required.
Butchart said that homes prices vary depending on the island. He stressed that non residents are only able to buy into property development schemes.
According to Theo Pietersen, Seeff’s MD in Mauritius, the island country has become highly sought-after by local property buyers, some for residency purposes, but increasingly for holiday/second homes, retirement and relocation.
“Mauritius is fast becoming a second home for South Africans and with the recent changes in the Mauritian government’s property investment legislation, it is now a lot easier to invest in residential and commercial property on the island and there is an increased amount of developments available for SA buyers to invest in, both residential and commercial,” he said.
He added that the country now boasts top-class infrastructure including an excellent banking sector, strong economic growth and a favourable investment and tax climate and is regarded as one of the easiest places to do business in.
Pietersen said that property on the island is also regarded as an excellent investment and if you invest early, you can generally benefit from excellent capital growth.
However, there are limited opportunities to invest, especially in prime seafront developments, he said.
Pietersen said that finance is available from both South African banks as well as in Mauritius at interest rates of 7% to 9%, but with 40% cash deposit requirements.
He added that South Africans tend to invest between MUR 6,500,000 and MUR 20,000,000 which equates to approximately R2,628,000 to R8,100,000.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email firstname.lastname@example.org, or call us on +27 21 763 4240.