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The performance of the Mauritian property market

The performance of the Mauritian property market

The Mauritian property market has improved leaps and bounds since allowing foreign ownership, where the first legislation, the Investment Promotion Act, was introduced in 2000. Thereafter, the first Integrated Resort Scheme (IRS) was launched in 2006, and in the last 10 years has seen capital growth over 300%.

With the opportunity for foreigners to invest in Mauritian property, from 2007, this continent has had a growth of up to 160% of US Dollar Millionaires (USDM); making it one of the top 5 performing markets in the world over a period of time. By the end of 2015 there were an estimated 3200 USDM living in Mauritius with a combined wealth holding of $12 billion. The growth of USDM’s within Mauritius by 2025 is seen to expand to about 7200.

Property price growth in 2016 saw 6% growth, with expectations for the next 10 years seeing 40% growth. Over the last 10 years, French foreign property investors have made up approximately 44,6% of the market, the next highest foreign property investors come from South Africa, with around 21,7%. South Africans have always been drawn to Mauritius for numerous reasons, some include that it is only a four-hour flight, the economy is stable and continues to grow, the secure ownership, tax benefits, as well as Mauritian residency.

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Mauritius Board of Investment

Mauritius Board of Investment

Knowing the investment potential that Mauritius offers to foreigners, the government of Mauritius created an investment promotion agency, otherwise known as the Mauritius Board of Investment (BOI). The task of this division is to mandate investment into Mauritius, as well as promote doing business and encourage live-work opportunities within the country.

 

It was reported in May 2016, that the BOI was planning to open a Johannesburg office in the near future. Niramala Mahadeo-Jeetah from the BOI shared with MoneyWeb, “The objective of opening up the office, together with the Ministry of Foreign Affairs, is to create more visibility about Mauritius, about the investment opportunities that it provides and how best the Board of Investment can facilitate investment in Mauritius.”

 

Since its independence in 1968, Mauritius was one of the few African countries to enjoy political stability. Mauritius is a parliamentary democracy with a multi-party system and with general elections are democratically held every 5 years. 

Mauritians highly value democratic norms and practices and no incidents have been reported over the past decades to indicate otherwise. All the successive governments have been strong champions of a market-driven economy where free enterprises can succeed and foreign investment thrives.

Invest in Mauritius, a Rainmaker Marketing initiative, is working with the Mauritius Board of Investment to help South Africans further understand and identify investment opportunities through property purchasing, along with other investment initiatives.

For more information about the Mauritius Board of Investment: http://www.investmauritius.com/

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Invest

Mauritius launches new visa that will allow South Africans to live and work there long-term

Mauritius launches new visa that will allow South Africans to live and work there long-term

In a country that boasts favourable personal tax rates and relaxed emigration requirements, the Mauritian government has announced a new ‘Premium Long-Stay Visa’ programme.

Zainab Bouzaine, an immigration specialist at XpatWeb, said the new visa programme will likely appeal to South Africans who want to work remotely on the tropical island.

It also offers an escape from rising Covid-19 numbers locally or those who want to get a feel for the tropical island to determine whether they would like to retire there eventually, Bouzaine said.

“The Mauritian government isn’t charging for this visa, and there aren’t any commitment fees associated with it.

“South Africans may enter Mauritius on a tourist visa and apply for the Premium Long-Stay Visa once they are there, or you can apply through the economic development board before departure. If you are eligible, can apply for the visa from 16 November 2020,” said Bouzaine.

Some of the requirements for this long-stay visa include not being able to enter the Mauritian labour market, and applicants will need to prove that they have enough income from a source outside of Mauritius to remain there.

Apart from the standard emigration requirements, additional documentation needed includes health insurance and proof of accommodation for the duration of your stay.

Long-stay visa holders will be able to stay in Mauritius for 180 days. It is also important to note that after 183 days, visa holders will become a tax resident of Mauritius, said Bouzaine.

Mauritius and Covid-19

At the beginning of the pandemic, the World Health Organisation identified Mauritius among 13 African countries as being at high risk due to the high volume of international travel, high population density, and long life expectancy (due to the elderly being at greater risk),.

In as little as five weeks, Mauritius brought down its Covid-19 inflection cases from a cluster of local cases to zero cases, becoming the first in Africa to contain the virus’s spread having reporting its first case in March.

The country’s well-developed healthcare system, combined with a timely and decisive national response and strict measures to detect and stem the virus’s spread, has led to the country becoming an African Covid-19 success story.

“The Premium Long-Stay Visa is ideal for retirees who want to get distance from the pandemic, as well as people who do business remotely and have kids that can study remotely.

 

 

“We also foresee that people who aren’t quite ready to commit to moving to Mauritius will make use of this extended stay Visa to get a better feel of what life on the island could be like,” said Bouzaine.

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Invest

5 steps to buying property in Mauritius as a foreigner

5 steps to buying a property in Mauritius as a foreigner

I don’t have to paint a global picture of what’s going on in the world, but if you’re worried – why not come live here? 

An island that’s one of the ten most peaceful countries in the world with a stable political system, an African success story, one of New York Times’ places where history is being made, and (most importantly) filled with very nice, clever people of all origins and belief systems.

 

Q1: What kind of property am I buying, for whom, and for what?

The reason you’re buying property in Mauritius (budget withstanding) will determine the property’s use, and that in turn will guide the choice of location. The more time you spend in your apartment or villa, the higher the level of comfort, space and storage you’ll need.

If it’s just for a few weeks per year, or if you’ve purchased purely for investment reasons (so that your property will be rented out to holidaymakers), your priorities will be geared towards just how far away the property is from the beach…and little else! If you’re relocating as a family, the proximity to school and pet friendly places becomes more important than, say, the distance you have to walk to the golf course.

If you’re thinking of acquiring a second home – to be used by family and friends several months a year over school holidays, for instance – you’d need a higher level of comfort than the ‘investment’ apartment. You won’t need to think so much about proximity to schools or big malls, and you would therefore focus on things like the size of your garden and of the property (for privacy, space), views and settings, and proximity to the beach with plenty of outdoor activities to enjoy.

Q2: Do I need a residence permit?

Another big question – not everybody wants one! You’ll want a residence permit if you plan on spending more consecutive months on the island than your tourist visa will allow unless you’re in the country under an investor or occupational permit, or a retirement visa. For people who don’t plan on using their residence for more than a month or two, it isn’t always necessary.

To qualify for a residence permit through the purchase of a property, you need to purchase within a designated scheme (IRS/RES/PDS or SC) put in place by the government, and your property must cost a minimum of 375,000 USD + taxes.

If you don’t need the permit, this opens up a few other options. The latter will probably be apartments in G+2 blocks, with a minimum buy-in of only 175,000 USD – all in all, quite a difference depending on your end game.

Q3: Am I willing to go off-plan?

In either of the above scenarios, you’ll be able to either purchase an existing unit or to go off-plan.

The off-plan route has numerous advantages, to name a few:

  • You’ll have the chance, on most developments, to customise your interior to varying degrees – and not just the paint and furnishings but certain structural aspects too.
  • More often than not, you’ll get in at a far better price than if you had to buy an existing property
  • Your payment is staggered over the construction period (usually around 18 months to two years)

Buying a resale property also has its perks: you can walk through what you’re buying, and of course, you don’t have to wait!

Q4: Who am I buying from?

This should actually be top of the list, especially if you’re going off-plan. Make sure the developer you’re dealing with has a solid track record and puts up the necessary guarantees that make sure your investment is protected.

The developed must deliver what you’ve signed up for. So! Do your due diligence, and as with most things, the same rule of thumb applies: “if it looks too good to be true”…

Q5: Can I afford it?

If you are limited by your budget or you aren’t prepared to invest more than a certain amount into your property acquisition here, clearly, you’ll have to make some compromises. Location? Villa or apartment? Killer view or more space? And so on. On average, entry-level units are priced between USD 500,000 and 1.1M, middle of the range you’ll find 1.2 – 1.7M and of course, properties that are 1.8M and up – which don’t compromise very much at all.
Ok, so: you’ve visited a bunch of developments, found something that suits your lifestyle and your pocket…what next? You’ll be happy to know that deciding where to buy was probably the hardest part! The rest is a piece of cake.

If you’re all set and raring to go, here are the 5 steps to acquiring property in Mauritius:

  • First and foremost you’ll need to open an account with a local bank.
  • Next, you’ll have to sign a reservation contract for the unit.
  • Pay a deposit into a dedicated escrow account, for the property.
  • In parallel, you’ll submit your application for permission to acquire property (Either from the Board of Investment or directly from the Prime Minister’s Office) and submit all the relevant KYC documentation, as stipulated.
  • Complete your acquisition by signing the deed of sale…et voila!

So if you want a white sand Christmas, or just the ability to wake up, step outside and head for a nice morning swim before work…we’ll see you soon!

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Invest

Buying Off-Plan In Mauritius

Buying Off-Plan In Mauritius

Main features of VEFA:

  • Buyer owns the land upon execution of the deed sale.
  • Buyer gets the building ownership when the construction works are completed.

Buyers can:

  • Make payments by instalments according to the construction works progress.
  • Contribute to the design plan of their dream home.

Legal implications of VEFA

As a former French colony, the legal framework governing real estate in Mauritius is the French Civil Code. It requires that VEFA be binding by a contract. Under the VEFA, the promoter must provide for a GFA (Garantie financière d’achèvement).

The GFA is a financial guarantee which acts as a safeguard for the buyer if the promoter cannot respect his commitments. The GFA can be provided by either the promoter himself or a third party such as a bank.

The Sales contract

  • The VEFA is achieved through 2 distinct procedures each validated by a contract:
  • The reservation contract
  • The buyer needs to sign a ‘preliminary reservation agreement’
  • Once the contract is signed, the buyer must follow with a deposit
  • The payment is placed in a special account, usually opened by the appointed notary


Understanding the VEFA

Investors in the real estate sector in Mauritius are increasingly going for off-plan property acquisitions. This type of acquisition means purchasing a property based on the architects’ drawings as the construction is at its planning stage.

“Buying off-plan” is commonly known as a VEFA (Vente en l’état future d’achèvement).

How does VEFA work?

 

Sale contract

  • This contract represents the title deed.
  • It settles the rights and obligations of the seller until building works are over.
  • The buyer can check if the project complies to commitments since he receives the contract one month prior to the signature.

Payments

According the provisions of Article 1601-3 of the French Civil Code, payments of a property sold under VEFA are thus scheduled :

  • 25% when signing the purchase agreement
  • 10% once foundations are completed
  • 35% upon completion of the roofing
  • 25% when building works are done
  • 5% once keys are handed over

Article by Know House

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Invest

Reasons To Invest In Mauritius

Reasons To Invest In Mauritius

Due to its best practices, Mauritius has built itself a good reputation as a secure and reliable investment hub in terms of good governance, transparency, ethics, economic and political freedom. One of the major pillars of the Mauritian sector is its Financial Service sector. Mauritius provides higher and more value-added financial services due to continuously enhancing its range of financial products.

Attractive Tax System

Mauritius encourages local and foreign companies to set up business as it has a low tax jurisdiction and an investor-friendly environment. The current Fiscal Regimes are as follows:

  • No Inheritance Taxes
  • 80% Tax credits for offshore companies – GBL1 (actual tax rate of 3%)
  • 15% Corporate and Personal Income tax rate
  • 15% VAT (refundable)
  • Tax-free dividends
  • No capital gains tax
  • Exemption from customs duty and VAT on equipment
  • Free repatriation of profits, dividends, and capital

Political and Social Stability / Excellent Living Environment

Since its independence in 1968, Mauritius was one of the few African countries to enjoy political stability. Mauritius is a parliamentary democracy with a multi-party system and with general elections are democratically held every 5 years. 

Mauritians highly value democratic norms and practices and no incidents have been reported over the past decades to indicate otherwise. All the successive governments have been strong champions of a market-driven economy where free enterprises can succeed and foreign investment thrives.

Availability of Qualified Workforce

As at September 2012, Mauritius has a labour force of 596 400. The literacy rate exceeds 80%. The impact of the

The Mauritian economy has expanded at a consistent pace the last four decades, roughly following growth predictions of the World Bank. It is no wonder that the country topples the African continent and some European countries when it comes to doing business http://www.doingbusiness.org/rankings.

Investment opportunities

Ranked 25th on the Ease of doing a business report of the World Bank, Mauritius has more to offer than just sandy beaches. Growth has been led by the service sectors, mainly booming financial services and tourism, with a substantial contribution from ICT, real estate, and retail trade. With major projects underway, Mauritius has international standards and provides secure investment opportunities. There is a series of schemes that are not only tax-free http://www.investmauritius.com/investment-opportunities.aspx but also given expert advice from specialized agencies.

Core inflation measures remain at moderate levels in the country with rare upward momentum. For more detail on Mauritius’ economic data, see the World bank’s report http://www.worldbank.org/en/country/mauritius.

A conducive political climate

Mauritius offers tax holidays, residency, and a very stable political climate. The business community has various institutions it can communicate on procedures, laws, and issues. Business communities are also organized sector-wise. The last few years have seen the amendment (sandbox agreements) of several laws to ease business reducing paperwork and approval requirement time. The smallness of the country makes it very easy to get the right person for an expert opinion. Whether one chooses to invest in leading sectors http://www.investmauritius.com/investment-opportunities.aspx or go for uncharted territory, the BOI and other institutions have been set up to assist investors. Mauritius has had trade relations with Africa, Europe, Asia, and the USA for over 200 years. The fact that Mauritians master 2 international languages and the intricacies of various cultures are essential elements to opening doors on various continents.

Article by:  https://www.knowhouse.mu/reasons-to-invest-in-mauritius