The 2018-19 budget presented by the prime minister included as one of its priorities, to enhance the economic growth in Mauritius, by attracting high net worth foreign investors and their families to the country.
This budget now allows foreign nationals to benefit from enhanced existing schemes and also the introduction of new incentives provided that they satisfy certain defined criteria and after due diligence has been carried out on them by the relevant authorities. All of the schemes below will be managed by the newly named Economic Development Board (EDB) which used to be known as the Board of Investment (BOI).
The first scheme which has been introduced will offer to foreign nationals the opportunity to acquire Mauritian citizenship by making a non-refundable contribution amounting to USD 1,000,000 to the Mauritius Sovereign Fund (intended to be used as capital for the development of financial technology activities). In respect to the spouse and dependents of the main applicant, an additional contribution of USD 100,000 per family member will have to be effected.
A further scheme was introduced, similar to the citizenship scheme, however, this incentive offers foreign nationals the possibility to acquire a Mauritian passport again by effecting a contribution of USD 500,000 to the Mauritius Sovereign Fund. Similarly, additional contribution of USD 50,000 would have to be effected per passport. This scheme will make the foreign nationals to be recognized as Mauritian nationals but not Mauritian citizens as per the first proposed scheme.
Other Foreigners Schemes
It has been proposed that in addition to the schemes already in place, the Foreign Manpower Scheme will be established and will be managed by the EDB. The scheme is to be established in order to attract talent in sectors such as Artificial Intelligence, Biotechnology, smart agriculture and the Ocean Economy, amongst others. With these type of permits, the employer will have to contribute the equivalent of one-month salary per foreign national being recruited.
The non-citizen retired permit is a scheme which is already in place, however it was proposed that a new package of fiscal and non-fiscal facilities be put in place. In addition to acquiring an apartment, the permit holders will also be exempted from payment of customs duties on the import of personal effects up to a value of MUR 2,000,000.
All the above schemes will become in force in the near future, however stakeholders are still awaiting additional clarifications from the EDB.
We welcome the introduction of the new schemes, however, we note that they will be competing with similar residence and citizenship schemes offered by other countries.
We note that in this regard the level of investment required in order to benefit from the schemes is on the high side compared to that offered by competing jurisdictions. When we note that some of the competing schemes offer a EU passport, it is evident as to the extent of competition for this type of benefit. Nevertheless, the price gap between the Mauritian requirement and other jurisdictions requirement for obtaining a passport is minimal and we have to bear in mind that given the high investment requirement, the applicant benefits from visa exemption for entering several countries such as those within the Schengen Union and many others.
Further, Mauritius is an island where investors can acquire the villa of their dream, on the beach, and by being so located in the middle of the Indian ocean, the island can be said to be strategically located, only a few hours away from mainland Africa, Australia or Asia.
Finally, by obtaining a Mauritian passport or Mauritian citizenship, the applicant benefits from a taxation rate of only 15% compared to various other countries where tax rate can be 40% and above.
Let us have a look at a few jurisdictions which offer similar schemes, such as the benefits offered via the Portugal’s Golden Visa Program, which comes with the Schengen Visa and Portuguese citizenship, and a lowered entry level of a EUR 500 000 investment in real estate, the USD 1,000,000 Mauritius donation sounds rather expensive.
Similarly, the Cypriot Government has established a number of incentives and one of these is a citizenship-by-investment program that grants full Cypriot citizenship to those that invest more than EUR 2 million in real estate and who meet certain other requirements. Successful applicants gain the right to live, work and study in all 28 EU member countries.
Finally, if we look at the Malta Individual Investor Program (IIP), which offers high and ultra-high net worth individuals and families worldwide citizenship in an EU Member Country. In this case main applicants applying to the Malta Individual Investor Program must make a non-refundable contribution to the National Development and Social Fund amounting to €650,000.
Despite some competition with other jurisdictions, we consider the new schemes to be a good initiative from the Mauritian government and those should attract many investors who wish to live and invest on the island and also benefit from our low taxation rate and at the same time be based only a few hours away from 3 main continents.