The 2021/2022 National Budget presented by Mauritius Finance Minister Renganaden Padayachy in Parliament today, Friday, unveils an interesting pack of measures aimed at the expatriate community. To further boost the economy and attract more foreign investors and professionals to the island, the government will review and improve many policies governing immigration, employment of foreigners and acquisition of properties by non-citizen.
The objective is not only to attract but to retain non-citizens on the island to encourage them to contribute to the local economy.
For example, an Occupation Permit (a combined Work and Residence Permit) which was previously valid for a maximum period of three years for foreigners working here will now be valid for up to 10 years. Dependent children holding a residence permit will now be allowed to stay in the country beyond the age of 24 years. Another interesting measure is that spouses of occupation permit holders will be allowed to work or invest without the need to apply for a separate Occupation or Work Permit.
Furthermore, foreign students will be allowed to work for up to 20 hours a week during their studies in Mauritius and will be eligible for a 10-year Occupation Permit if they choose to be employed here after graduation.
Ki News reproduces below the main measures likely to interest the expatriate community.
- Government will streamline some sixteen different incentives schemes under three certificates issued by the EDB, namely, the Investment Certificate; the Export Development Certificate; and the Premium Investor Certificate.
- The Premium Investor Certificate will allow companies investing at least Rs 500 million to benefit from negotiable incentives, upon recommendation of a Technical Committee and approval by the Minister.
- All businesses will be required to register with the Economic Development Board to avail of incentives and schemes introduced by the Government.
- The Economic Development Board will set up a Business Support Facility that will provide facilitation and advisory services to all businesses in Mauritius.
- The exemption on trade fees not exceeding Rs 5,000 is extended for an additional 5 years, with an amnesty on trade fees and related penalties and interests that were due before 1st January 2020.
- The Business Registration Act will be amended to cater for an electronic Business Registration Card. A fee will be charged for amendment to the Business Card.
- Trade fee will no more be tagged to date of start of business but become due two Financial Years after registration of the business. Part of a Financial Year will be considered as one Financial Year.
Opening of borders
- As from the 15 July 2021, Mauritius will be open to all vaccinated visitors for resort tourism. A tourist will be allowed to leave the hotel after 14 days with a negative PCR test;
- As from 1st October 2021, subject to preconditions being met, all vaccinated tourists with a negative PCR test will be allowed on the Mauritian territory without any restrictions.
Attracting retired citizens
The EDB will set up a special desk aiming to attract at least 50,000 foreign retirees in Mauritius during the next financial year, through a targeted marketing campaign in collaboration with the Mauritius Tourism Promotion Authority (MTPA).
Invest Hotel Scheme amended
To enable the tourism industry to aim at more long-term visitors, the Invest Hotel Scheme will be amended to allow the sale of up to 80% of the units with the possibility for the owner of a room to stay for a maximum of 6 months annually; and reduce the minimum selling price of a standalone villa from USD 500,000 to USD 375,000.
A new pharmaceutical sector
Government plans to create a major new manufacturing industry in Mauritius, that of vaccine and pharmaceutical production. It will encourage private companies to construct purpose-built factories for manufacturing of pharmaceutical products and medical devices as well as for clinical and pre-clinical trials. To this end, developers will be able to benefit from exemption on: Registration duty and land transfer tax; Land conversion tax; and VAT on construction. All companies engaged in the manufacture of pharmaceuticals and medical devices will be eligible to a premium investor certificate. Biotechnology and pharmaceutical companies will be allowed a full tax credit on the costs of acquisition of patents. Companies engaged in the medical, biotechnology and pharmaceutical sector will be taxed at 3% instead of 15%.
Government will provide a seed capital of Rs 1 billion to the Mauritius Institute of Biotechnology for the setting up of a manufacturing plant for the local production of COVID-19 vaccines and other pharmaceutical products. To this end, it will invite renowned pharmaceutical companies and potential investors to participate in this undertaking.
Foreign students allowed to work
Some 3,500 foreign students were studying in Mauritius in 2020 compared to just 600 ten years ago. Government wants international students to think of Mauritius as a preferred destination to study, work, invest and live. International students enrolled in a recognised educational institution in Mauritius will benefit automatically from: A 20 hours per week work permit and a 10-Year renewable Young Professional Occupation Permit upon graduation.
The construction, and expansion of student campuses will be exempted from land transfer tax and registration duty. A concessional 3 percent corporate tax rate will apply to private universities set-up in Mauritius. The 50 Government scholarships for African students will be open to students attending public universities.
Occupation Permit for 10 years
- The validity period for an Occupation Permit for Professionals is being extended from 3 years to 10 years, in line with investors, self-employed, and retired non-citizens.
- Spouses of OP holders wishing to invest or work in Mauritius will be exempted from applying for an Occupation Permit or a work permit.
- The maximum age limit of 24 years for dependents will be waived.
- A new category will be introduced under the Occupation Permit Regime, the 10-Year Family Occupation Permit for those contributing USD 250,000 to the COVID-19 Projects Development Fund.
- Non– citizens holding an Occupation Permit as a Professional will be given the flexibility to switch job without having to submit a new application provided the minimum criteria are met.
- Non-citizens holding an OP as self-employed will be allowed to incorporate a one-man company and employ administrative staff.
Faster processing of application
Where an application for an Occupation Permit requires views and recommendations of a ministry or public sector agency, the latter shall within 5 working days from the date of a request from EDB submit its views or recommendations to the EDB. Where no reply is received within the set time frame, it shall be considered there is no-objection from the Ministry or public sector agency.
Salary of Rs 30,000 for financial services
The monthly salary applicable for an Occupation for professionals in financial services will be brought down to Rs 30,000. However, this will be limited only for fund accounting and compliance services by a company holding a license from the FSC, and the professional will need to have at least 3 years’ relevant work experience. (Minimum eligible salary for other sectors remain at Rs 60,000 per month, except for ICT which is also at Rs 30,000)
No need for Business visa
The requirement for OP applicants to arrive in Mauritius on a business visa to be issued with a permit be waived. A non-citizen will be eligible for an OP irrespective of his visa category when he arrived in Mauritius.
Residence permit for apartment buyers
A non-citizen who purchases or otherwise acquires an apartment used, or available for use, as residence, in a building of at least 2 floors above ground floor, provided the purchase price is not less than USD 375,000 will be issued with a residence permit, including for his dependents, and exempted from the requirement of a work or occupation permit.
Smart OP Card
A Smart Card will replace the current paper-based Occupation Permit. A privilege club scheme will be implemented providing a range of incentives to Occupation Permit holders and retirees, ranging from privilege access to hotels, golf courses, restaurants, private medical institutions, amongst others.
Easy registration of foreign doctors and dentists
The Medical Council Act and Dental Council Act will be amended to facilitate registration of foreign practitioners.
Permanent Residence Permit
Holders of a 10-Year Permanent Residence Permit will have the validity automatically extended to cover a 20-Year period. Holders of a Permanent Residence Permit will be able to renew their permits and they will be given the flexibility to switch category between investor, professional and retired.
Work Permit for maids and carers
The Work Permit will be extended allowing Mauritians and non-citizen residents to bring foreign carers and maids to work in Mauritius. The legislative framework will be amended to include the ministry of Finance in the delivery process of work permits.
A Premium Visa Scheme has been introduced with the objective to encourage eligible foreigners to come for long stay in Mauritius for a period of at least one year with the possibility of renewal.
To make this Scheme attractive and also to avoid any administrative hurdles, a holder of a Premium Visa, spending 183 days or more in the Republic of Mauritius, will be subject to income tax as follows –
(i) the Mauritian-sourced income of a Premium Visa Holder (e.g. emoluments for work performed remotely in Mauritius) will be taxed on a remittance basis, that is in the same manner as foreign-sourced income;
(ii) money spent in Mauritius through the use of foreign credit or debit cards by the holder of a Premium Visa will not be deemed to have been remitted to Mauritius; and
(iii) income brought and deposited in a bank account in Mauritius will be liable to tax except if a declaration is made by the holder of a Premium Visa that the required tax has been paid thereon in his country of origin or residence.
These amendments will be backdated to take effect as from 1 November 2020.
A 5-year tax holiday is granted on emoluments of an asset manager, a fund manager or asset and fund manager who manages an asset base of not less than USD 100 million and who has been issued with a certificate on or after 1 September 2016. Holders of a certificate issued on or after 1 September 2016 will be exempted from tax on their emoluments for an additional 5 years while new certificate holders will be eligible to a tax holiday of 10 years. In addition, the threshold of USD 100 million in respect of asset base being managed by an Asset/Fund Manager will be reduced to USD 50 million.
Foundations and Trusts
The Income Tax Act will be amended to ensure that foundations and trusts benefitting from a preferential tax regime comply with the OECD standards, including substantial activity requirements.
Tax on Transfer of Leasehold Rights in State Lands for hotels
To enable hotels built on State lands and in financial distress to restructure and attract equity financing, the rate of tax on transfer of leasehold rights will be halved. Thus, the current tax rate of 20% payable equally by the buyer (10%) and the seller (10%) will be reduced to 5% each. This reduction will apply for a period of 2 years starting as from 1 July 2021.
Tax on Transfer of Leasehold Rights in State Lands
The sale of a residential unit in a project developed on State land relating to senior living under the Property Development Scheme will be exempted from the payment of tax on transfer of leasehold rights in State lands.
Sale of Serviced Land
The promoter of a project under the Smart City Scheme is presently allowed to sell one plot of serviced land not exceeding 2,100 m2 to a non-citizen holder of Occupation permits, Permanent Residence Permit or a Residence Permit. The time limit will be extended for another period of two years, that is, up to 30 June 2024 instead 30 June 2022. This measure will be extended to the Property Development Scheme (PDS).
The non-citizen will have to complete the construction of a residential building within a period of 5 years. The total area of all plots of serviced land for sale should not exceed 25% of the land area planned for the construction of residential properties.
Invest Hotel Scheme
Currently, the sale of units in an approved hotel development under the Invest Hotel Scheme is limited to 60% of the total number of units in the hotel. This limit will be increased to 80% of the total number of units. The Invest Hotel Scheme will allow owners to occupy their units for a total period of 180 days instead of 90 days in a year. In the case of owners holding a Premium Visa, there will be no restriction in terms of the number of days that they can occupy their units.
Integrated Resort Scheme (IRS)/Real Estate Scheme (RES)
To create a level playing field with other property schemes and accelerate the sale of a few remaining IRS/RES units, registration duty on the sale of an IRS or RES residential property will be levied at the rate of 5% or USD 70,000 whichever is the lower. Certain provisions of the repealed IRS and RES regulations will be reinstated to enable sale of remaining immovable property in those projects.
No approval is required from the Prime Ministers’ Office (PMO) for disposal of property under the EDB Schemes (e.g. Property Development Scheme, Integrated Resort Scheme) but only for EDB to notify the Prime Minister’s Office of such disposal.
During the Budget presentation, Renganaden Padayachy paid a vibrant tribute to late Sir Anerood Jugnauth, former Prime Minister and former President of Mauritius who passed away on 3rd June 2021 at the age of 91. He said this is a Budget which follows the philosophy of Sir Anerood Jugnauth. “His thinking, his vision, his culture of hard work – of always striving and never letting up – no matter how tough the challenge- and his achievements have left an indelible proud legacy for us and for generations to come. Sir Anerood Jugnauth had a great vision for Mauritius – a vision which he stated in his Budget Speech in 1991 when he expressed wholeheartedly his wish for Mauritius to be “A land of achievers and of achievements.”
“His vision lives on. Together, we will continue to build on his legacy,” the minister concluded.