In Mauritius, it is possible for foreigners to buy a real estate property developed under the IRS, RES, IHS and PDS schemes and regulated by the government.
The IRS, RES, IHS or PDS programs must be approved by the BOI (Board of Investment): environmental standards, job creation, bank guarantee …
There is a tax treaty with France dated 11 December 1980 to avoid double taxation on revenue and capital.
There's also a United Nations convention against corruption.
Let’s have a look at the different schemes: PDS / IRS / RES / IHS
The PDS system (Property development scheme)
Introduced in 2015, the “Property Development Scheme” is a new high-end real estate development, designed to replace the IRS and RES. Compared to other concepts, it focuses on the integration of Mauritians. Thus, at least 25% of the homes must be sold to local people or the Diaspora (Mauritians abroad).
A real estate project under the PDS scheme must include:
– At least six luxurious homes on a freehold land with a surface area of at least 4220m2 and not exceeding 21 hectares.
– Common areas of quality designed to promote social interaction.
– Premium commercial and leisure facilities in line with the standard of development.
– Daily management services (safety, security, waste collection, housekeping service, etc …).
– Contribution to the welfare of the community.
For an acquisition of more than 500 000 USD, the buyer is eligible for a residence permit ; thus he can spend more than 6 months in Mauritius and become tax resident of Mauritius = enjoy all the tax benefits.
Who can buy property under the PDS scheme ?
– An individual.
– A company registered under the “Companies Act”.
– A society whose statutes were deposited with the “Registrar of Companies”.
– A limited partnership in accordance with the “Limited Partnerships Act.”
– A trust (trustee) whose guardianship services are provided by a qualified administrator.
– A foundation under the “Foundation Act”.
The IRS system (Integrated Resort Scheme)
The scheme was launched in 2002 by the Board of Investment (BOI) to develop luxury real estate on the island and to make real estate acquisition possible to a nonresident. When buying an IRS property of more than $ 500,000, the investor becomes the owner and gets an automatic right of residence in Mauritius. This right extends to the spouse and any dependents.
An IRS property should offer high-end leisure facilities; a golf or a marina, private pools, high quality cuisine and a management service. This service is usually provided by a hotel group on the same site.
Note : for each villa built under the IRS scheme, the promoter must pay a social contribution of 200,000 rupees that will help finance the local projects. The first IRS project (Tamarina) was launched in 2005 on the west coast.
The RES system (Real Estate Scheme).
Quite similar to the IRS but designed for smaller development surface areas. They must be greater than 1 acre or 4 221m2 but should not exceed 10 hectares. We are therefore talking about a human scale project. The scheme was launched in December 2007. As for the IRS, the RES includes the provision of facilites, leisure and various services (security, maintenance, gardening , garbage collection and domestic helpers) within the property.
The RES targets an expanded clientele since there is no minimum price unlike the IRS. However, the residency right is not automatic, but possible when buying a property equal to or more than $ 500,000 or when meeting the conditions for obtention of a residence permit (Contact us for details).
The IHS system (Invest Hotel Scheme)
This scheme was launched in September 2009. It allows the acquisition of rooms, suites, apartments or villas in high class and internationally renowned hotels (5 *).
No minimum purchase price, no residence permit is related to the acquisition but it often offers a very attractive rental guarantee.
Possibility of occupation for up to 45 days per year and financial income. Ability to use overnight stays in other hotels of the group (contact us for more information).
Example: The acquisition offers the possibility to use your days in a hotel of the same group in the Seychelles, the Maldives and many other destinations in the world.
The rest of the time, your property is rented by the operator of the hotel, and generates revenue. Note: All maintenance costs of the property and equipment are covered by the hotel.
Under all these schemes, the revenue generated will be taxed at a fixed rate of 15%.
Why invest in Mauritius
• Firstly, there is a strong demand for tourist residences:
The tourism business is booming: in 2011, there was 980,000 tourists (46% French) against 750,000 in 2005 and 500,000 in 2000. The number of tourists has quadrupled since 1990.
2,000,000 tourists are expected by 2017, so there's a real need for tourist residences.
Mauritius is ranked 4th in countries where it is good to invest in real estate, after Canada, Hong Kong and Switzerland (according to the Telegraph 21/11/2011).
The Mauritian property market offers competitive advantages in terms of price and quality of offers and many more advantages (entertainment, flourishing economy, attractive tax system) that guarantee a sustainable and high value.
The potential capital gain is important because there is a high demand for Mauritian and foreign investors and offers will decrease in a few years.
• There is a political and legal stability protecting investors in Mauritius
Political stability: parliamentary republic since 1992. There are three main parties and total independence of the judiciary.
The legal system protect investors (French and English rights) while controlling investments.
• Mauritian tax is very attractive
According to the Franco Mauritian double taxation agreement dated 11 December 1980 (Article 6) :
" Income coming from a Mauritian property and owned by a French (with a tax residence in France) are taxed in Mauritius. "
The real estate income are taxed according to the Mauritian law, at the rate of 15 % for a French investor who buys a property in Mauritius, and then decide to rent it.
Other advantages :
– Tax rate of 15% on corporate profits
– No tax on capital gains
– No tax on dividends received from a Mauritian company
– No CSG / CRDS
– No tax on real estate gains
– No wealth tax on goods purchased in Mauritius
– No tax on inheritance rights depending on the tax residence of the heirs (Contact us).