Buying Off-Plan In Mauritius

Buying Off-Plan In Mauritius

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?

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

Ø  The buyer needs to sign a ‘preliminary reservation agreement’

Ø  Once the contract is signed, the buyer must follow with a deposit

Ø  The payment is placed in a special account, usually opened by the appointed notary

Sale contract

Ø  This contract represents the title deed.

Ø  It settles the rights and obligations of the seller until building works are over.

Ø  The buyer can check if the project complies to commitments since he receives the contract one month prior to the signature.

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


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 a strong champion 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

Investment opportunities

Ranked 25th on the Ease of doing business report of the World Bank, Mauritius has more to offer that 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 but also given with expert advice from specialised agencies.

Core inflation measures remain at moderate levels in the country with rare upward momentum. For more detail on the Mauritius’ economic data, see the World bank’s report

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 organised sector-wise. The last few years have seen the amendment (sandbox agreements) of several laws to ease business reducing paperworks and approval requirement time. The smallness of the country makes it very easy to get the right person for expert opinion. Whether one chooses to invest in leading sectors 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 intricacies of various cultures are essential elements to opening doors on various continents.

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