South African investors are increasingly ‘following their money’ to Mauritius as the island emerges not only as a hub for international capital, but an attractive lifestyle destination where people can live, do business and raise their families.
Apart from being the highest-ranked economy in Sub-Saharan Africa for ease of doing business by the World Bank, Mauritius is wooing a growing number of local investors through its relatively close proximity to South Africa, attractive tax regime and laid-back lifestyle, said Vidish Jugurnauth, a director at Sovereign Trust (Mauritius) Limited.
“Mauritius is more than just a ‘jurisdiction of choice’. It’s a country where people can live comfortably, raise their children in a safe environment, retire, invest and do real business. This is what really sets Mauritius apart from other offshore jurisdictions,” said Jugurnauth.
South Africans have long been among the leading foreign purchasers of residential property in Mauritius, according to statistics by the Mauritian Board of Investments. Occupation and residence permits are freely available to foreigners wishing to work, invest, live or retire in Mauritius.
Coreen van der Merwe, managing director of Sovereign Trust, said growing numbers of South Africans are looking at Mauritius as a ‘Plan B’, instead of more traditional emigration destinations like Australia, New Zealand and the UK.
“Mauritius offers one of the most progressive investment environments in the world. Setting up a business there is quick and easy, and there’s already a sizeable community of South African expats, making it familiar and easily accessible,” said Van der Merwe.
Part of the attraction of Mauritius for foreign investors has always been its simple taxation system; there is no capital gains tax, no property tax and no inheritance tax. The corporate and personal tax rate is 15%, while dividends are typically not subject to tax.
Dividends from foreign sources are subject to a partial exemption of 80% from taxes and in cases where Double Taxation Avoidance Agreements (DTAAs) are in place, dividends will benefit from the tax rates agreed between contracting states in accordance to the provisions of the applicable DTAAs.
In addition, there are no foreign exchange controls.
Mauritius’ financial services sector has grown rapidly in the past 20 years, to the point where it now positions itself as the ‘gateway to Africa’, thanks to a well-developed banking sector, sound legal and regulatory framework, well-qualified bilingual workforce, and political and economic stability.
One of the most open economies in the African region, Mauritius has long-standing cooperation agreements with most African and international bodies, including SADC and COMESA. It also has double taxation avoidance agreements in place with 46 countries globally, including 20 African states.