By Gareth Land of 2Futures, the leading property developer in Mauritius – in partnership with the Economic Development Board of Mauritius.
An overview of why Mauritius has become such an attractive destination for South African property investors.
At 2Futures, we recognise that South Africa already has a top, globally recognised property investment destination: Cape Town. However, as I mentioned in my recent thought leadership, Mauritius has become another leading investment option for South Africans for the past 2 decades looking for alternative opportunities, featuring many attractive attributes (legislative, economic, and lifestyle) that are unique to the country.
- Permanent Residency and Visa requirements: The government of Mauritius has, in recent years, has transformed its policies around foreign investment and attracting new residents to the island, as can be seen in its changes to its residency permits and visas. As laid out by the Economic Development Board of Mauritius, there are multiple options for residency attracting investors who wish to live on the island – including entrepreneurs, retirees, and lovers of the island lifestyle and culture.
Non-Mauritius citizens can buy a house, villa, or apartment in a residential development approved by the EDB for foreign investment and obtain permanent residency in Mauritius with a minimum investment of 375K USD.
Additionally, there is a premium visa scheme that allows international citizens from over 110 countries to live in Mauritius as long-stay tourists, retirees or professionals, with their families, to reside or work remotely from Mauritius. It permits foreign nationals to stay in Mauritius for up to one year with an option to renew.
- Ideal for retirement
These visa requirements have been key attractor for many of our retired (or close to retirement) investors. This alongside the social and political stability, island environment, and overall high standard of living.
- Tax advantages
For many of our entrepreneurial-minded clients, the investment in Mauritius’ real estate sector is often due to the financial benefits. With no council tax, property tax, inheritance tax, or capital gains tax – and an estimated 5 – 7% return on rental investments – both property ownership and the high-return rental market remain highly attractive.
The Bank of Mauritius reported that South Africans are the second-largest group of real estate investors in the country, driven by factors such as political stability, attractive tax regimes, and the desire for a higher quality of life.
As the cliché goes, many property investment decisions revolve around location, location, location. Mauritius offers a peaceful environment, a low crime rate, short travel times to/from South Africa, and wide connectivity to other countries.
From a financial perspective, the tax advantages have been outlined above, and there is an ease of doing business thanks to Mauritius’ transition towards becoming an International Finance Centre and local access to South African banks. Similarly, the widespread existence of an English-speaking social, schooling, and professional environment has helped many of our South African clients to acclimatise and join the growing South African expatriate community here.
Mauritius is a short plane ride from South Africa, providing a significant geographical advantage that influences investors’ decisions.
Naturally, many residential property investors who decide to emigrate usually want to maintain connection to their home country. The fact that Mauritius is a few hours away by plane means it is easy for expatriates to visit South Africa, and for their friends and family to visit them here. For those still doing business with South African partners/clientele, the negligible (2 hour) time difference is also convenient, at least compared to those opting to move to other continents further east/west.
Similarly, flights to Mauritius are significantly less expensive than flying to Europe or other countries that offer similar island/beach lifestyles.
Elaborate on the types of properties that South Africans are investing in and the profiles of these investors
One common trend among our South African clientele has been that many of them are already advanced in their careers, usually above the age of 40, and have the capability to perform hybrid-work, whether they are self-employed or working for a larger entity.
Key customer profiles include (with some overlap):
- Business owners or high-level director/manager/executive level white collar workers, doctors, and consultants (investing in 3+ bedroom apartments and luxury penthouses)
- Families with children (investing in 2 – 3-bedroom properties)
- Retiree couples (usually investing in 2-bedroom properties, allowing them to still host guests)
- Rental Investors (purchasing from studio apartments all the way up to the most luxurious penthouses) depending on the investor’s objectives and budget, we ensure to find the ideal solution.
The Economic Development Board of Mauritius (EDB) has made it easier to secure residency permits, influencing investment decisions.
For anyone deciding to emigrate or even temporarily work within another country, it is vital that the residency or work permit process is efficient and accessible. The government of Mauritius’ decision in 2020 to change its permit and visa legislation has made the island nation significantly more attractive to foreign investors who wish to move to a country (or work within it) that makes the process as simple as possible.
These permit requirements have continued to evolve in recent years, from lowering the minimum investment threshold for residency from 500 000 to 375 000 USD, and the digitalisation of online applications.
EDB Mauritius’ recent Property Market Highlight research explained:
“Over a period of more than 20 years, starting with the creation of the IRS in 2002, seven residential schemes have been introduced through specific regulations under the EDB Act or amendment of the NCPR Act, with the purpose of attracting foreign investment and enhance the image of Mauritius as a premium destination … to settle for business or to take up permanent residence.”
Ultimately, these efforts have attracted a wider variety of investors making their way to Mauritius from across the globe – including South Africa.
Mauritius is aiming to become a regional hub for various sectors, with this diversification influencing property investments.
New business set ups, offices and hence the international teams moving to Mauritius increases the demand on the high-end and luxury rental properties – which we are building. Therefore, even though, as 2Futures, we cannot comment on different sectors’ dynamics in the Mauritius market, we confidently can say that all the business investments to Mauritius increases the demand on the rental properties.
Considering that 2Futures focuses on developed areas (in terms of infrastructure, where there is already top-class international schooling and high-quality medical facilities) mainly in the North and the West, our properties are matching 100% to the newcomers, settling in Mauritius.
Opportunities for smaller investors in Mauritius’ property market
While we have noticed many of our clientele are opting to pursue residency permits by meeting the minimum investment threshold, there are options for those wanting to invest in smaller rental properties. These include studio apartment or 1-bedroom properties – usually still requiring a financial investment of 200 000 USD and above.