Opening up to the world: Mauritius attracts expats with new permits regime

Mauritius has repeatedly shown the world its innate ability to adapt to the fast-changing global economic landscape by moving away from a sugarcane monoculture economy to a well-diversified economy comprising agriculture, textile manufacturing, global businesses, financial services, and now FinTech, with ease. In the process of such economic re-invention, the island economy has continuously pursued local and foreign investment, know-how and foreign talents to its shores.

As announced in the National Budget 2020-21 on June 4, the criteria for work and live permits have been reviewed to make it easier for foreign professionals to consider relocating to Mauritius, hence addressing the skills gap. An ageing population and a reduction in total number of inhabitants last year for the first time in half a century is clearly exacerbating the issue.

Following the Budget, its key implementing omnibus legislation, the Finance Act has been passed by the National Assembly on 4 August 2020 and has enacted a host of economic measures, including changes to the permit rules and the Immigration Act. All these changes are geared towards further opening up the economy. These measures have come into effect as from 2 September 2020 with the accompanying guidelines recently issued by the Economic Development Board (EDB) of Mauritius.

Why were these new residency rules needed?

Our population has remained relatively stagnant at slightly more than 1.2 million over a number of years, mostly as a result of an ageing population. Attracting people to live and work in Mauritius should create a virtuous cycle of increased spending and improved infrastructure. This should be a welcome boost to the economy given the lifestyle that would normally be associated with expatriates.

This relaxation of the permits rules essentially stems from a recognition that not opening up our economy further to foreign labour and skills will hamper the country’s economic development. In the global race for skills and talents, we face tough competition from all developing and even developed economies. Most developed and developing countries around the globe have realised that talents and skills are key resources and while some, especially developed countries, have intrinsic advantages given the better quality of life, developing countries have put forward a lot of benefits – tax or otherwise – to entice expatriates.

For a number of years now, there has been a dearth of skills in Mauritius. In addition, and to continue growing, our economy needs critical mass in terms of the number of people actually living in the country.

The changes to the occupation permit rules, as announced in the recent Budget, represent a step in the right direction to address these twin challenges of skills shortage and critical mass.

How professional OP holders will benefit under the new permit regime?

The National Budget 2020-2021 reiterated the country’s commitment to attract investment in specific sectors such as pharmaceutical, high-precision manufacturing, and food processing and put measures in place to attract foreign talents to supplement the limited pool of skilled workers in these areas. Accordingly, the Government is extending the low minimum salary requirement of MUR 30,000 for Professional Occupation Permit (OP) holders, initially applicable to the erstwhile sectors of focus such as ICT and BPO, to these other strategic sectors as well.

Further, OP holders will also be eligible to invest in any business provided they are not employed in the business, are not directly involved in the management of the business, and do not derive any salary of employment benefits from the business. Moreover, they would also be eligible to hold shares in a business in Mauritius, provided that they are not the majority shareholder.

To further incentivise foreigners to relocate to Mauritius, professionals having an occupation permit and perceiving a minimum salary of MUR 150,000 for the last 3 consecutive years would be eligible to apply for permanent residency.

How the new permit regime benefits retired non-citizens?

Similar to a professional occupation permit holder, a retired non-citizen may also invest in any business provided that he/she is not employed in the business, does not manage the business, and also does not derive any salary or employment benefits from the business.

By extending the possibility of investing in businesses in Mauritius, the new permit regime offers retired non-citizen a great avenue to combine relaxation and pleasure with a business objective. It ensures a safe investment in a stable and welcoming country with a conducive and business-friendly environment.

Existing retired non-citizen OP holders will also have the option of applying for permanent residency if they have a valid OP for the last 3 years and have transferred at least USD 54,000 in freely convertible foreign currency during the last 3 years.

How OP holders as investors benefit under the new permit regime?

The COVID-19 pandemic has had and will continue to have serious repercussions not only for people’s health but will also result in significant adverse impact upon businesses and the global economy. And Mauritius will not be spared.

One of the focus areas for the Government is to attract productive foreign direct investment in high value sectors, and several incentives have been put in place to ease the process of attracting such investments in the country. For example, the minimum investment required to apply for an Investor OP has been reduced from USD 100,000 to USD 50,000 and the minimum annual turnover required brought down to MUR 4 million annually.

Moreover, the validity of the OP for an investor has been extended from 3 to 10 years, eliminating the administrative burden of renewing the permit after every 3 years and also providing a strong message of confidence from the government.

The minimum investment amount for an investor to obtain the status of Permanent Resident or for a holder of an immovable property under an existing scheme to obtain the status of resident has been reduced from USD 500,000 to USD 375,000, together with a minimum annual gross income of at least MUR 15 million for the 3 years preceding the application.

Non-citizens to acquire land and property with ease under new residency rules

Until now, the two options available to foreigners to acquire residential property in Mauritius were through the Property Development Scheme (PDS) and through purchasing apartments in condominium developments of at least two levels above ground (G+2).

However, the new threshold of USD 375,000 for acquisition of property does not reference the (G+2) criteria, leaving it open to question whether the latter scheme is still applicable or has been made redundant by the new property acquisition rules that prima facie facilitate both acquisition of property by OP holders as well as ease the attainment of permanent residency status via the property investment route.

Smart City projects are being promoted as a vital component of the country’s vision to modernise and, at the same time, strengthen the foundation for economic growth and create new job opportunities. Under this thrust, RP, OP or Permanent Residence Permit holders will be able to acquire one plot of serviced land not exceeding 2,100m2 for residential purposes within smart cities until 30 June 2022. As two crucial conditions governing such sales, the total area of all plots of serviced land for sale should not exceed 25% of the land area planned for residential properties, while any construction of residential building by non-citizens must be completed within 5 years.

Allowing foreigners to acquire land for residential purpose within a smart city makes it the right platform for industrial, business and residential purposes. This will help in attracting key talents as well as innovation-driven know-how and investment to the country.

How can expatriates leverage the new permit regime to relocate to Mauritius?

The existing and new measures will help expatriates to facilitate the process of relocating with family to our shores in more ways than one.

The EDB as the sole agency and one-stop-shop responsible for determining and recommending OP applications will certainly help reduce the processing time for such applications. Also, allowing the holders of a permit to bring their parents to live in Mauritius will ease the number of applications required to be processed and reduce uncertainties that had been there in the past for the applicants.

Besides, the framework does not only simplify the application process but also enhances the ability of expatriates to find a suitable home for their families under the new property acquisition route, and helps provide a channel to  better and more quickly integrate them into the Mauritian society.

Local players such as Management Companies, educational institutions and real estate agencies are well poised to help the expatriate community throughout the planning, transition, and adaptation phases, as well as with assisting them to develop social and business opportunities.

Opening up to the world

With the new residency rules, Mauritius offers more flexibility than ever for expatriates seeking to live and work here coupled with an ideal time zone to carry out business operations across the world.

Finally, a clear mandate of the residency regimes being put in place is to improve quality of labour as well as to tap into the potential of undeveloped and underdeveloped sectors such as high precision manufacturing, ICT, Food processing and pharma.

Ultimately, by lowering the barriers to entry for non-citizens wishing to work and live in Mauritius in terms of minimum salary requirements, investing in local businesses, ability to bring dependent parents, and right to purchase property, the decision to live and work in Mauritius will become easier for expatriates than ever before.

Kevin Bessoondyal

Head - Business Development