Why invest in real estate in Mauritius?

Situated halfway between Africa and Asia, Mauritius is gradually becoming a pivotal island not only for international business but also as a place to live. The country has built a solid reputation as a reliable and safe investment platform, mainly for the African continent.

In recent years, Mauritius has become one of the favorite destinations for investors worldwide. Indeed, since the Mauritian government implemented certain provisions related to personal and family matters, foreigners can now own real estate properties.

What are the main investment models that allow foreigners to own real estate?

Under a project labeled PDS (Property Development Scheme) by the Economic Development Board (EDB), if you make a real estate investment of 375,000 USD (or equivalent) in Mauritius, you become a Mauritian resident. Beware, do not confuse residence with tax residence! To obtain tax residency from a Mauritian perspective, one of the main conditions is that you need to stay more than 183 days in your Mauritian residence during the financial year ending in June.

The possible investment programs are:

Integrated Resort Scheme (IRS) and Real Estate Scheme (RES)

A non-citizen also has the opportunity to acquire luxury residential properties under the Integrated Resort Scheme (IRS) and Real Estate Scheme (RES). The non-citizen and their dependents are eligible for a residence permit under the IRS, RES, and PDS schemes when they have invested a minimum amount of 375,000 USD. Property owners can rent the property, become tax residents in Mauritius (under certain conditions), and face no restrictions on the repatriation of funds or income from the sale or lease of the property.

Property Development Scheme (PDS)

The Property Development Scheme (PDS), which replaced the IRS and RES, allows the development of a variety of residences for sale to non-citizens, citizens, and members of the Mauritian diaspora. Under the PDS program, a non-citizen is eligible for a residence permit when buying a villa if they invest more than 375,000 USD; or its equivalent in a freely convertible foreign currency.

The Smart City Scheme (SCS)

The Smart City Scheme revolves around the concept of work, life, and leisure. It integrates mixed-use developments in cosmopolitan agglomerations with smart technology and pioneering innovation at their base. The goal is to offer a more peaceful lifestyle through the development of self-sufficient cities. These offer integrated sustainable solutions; ensuring minimal waste and maximum comfort for the long-term benefit of all citizens and future generations, regardless of their social and economic class. Non-citizens can acquire built residential properties including villas, houses, townhouses, apartments, and duplexes.

Ground floor + second floor

Non-citizens are allowed to purchase apartments in condominium buildings of at least two levels above the ground (G + 2). This is with prior approval from the Economic Development Council, provided the purchase price of an apartment is not less than 6,000,000 MUR, or equivalent in any other foreign currency. For any real estate sale, you must also provide a land transfer tax (Land Transfer Tax) amounting to 5% of the property’s value.

The French-Mauritian Double Taxation Avoidance Agreement is particularly favorable to French investors.

The main purpose of this agreement is to prohibit double taxation of income sourced in one state and received by a person fiscally domiciled in another state.

Any natural person domiciled in France is subject to unlimited tax obligations, regardless of their nationality. Therefore, all real estate properties they own, whether located in France or outside France, are included in the taxable base of the wealth tax (ISF).

However, Article 23 of the Tax Convention signed between France and Mauritius (amendment of June 23, 2011) provides that:

“Wealth constituted by real estate referred to in Article 6, owned by a resident of one state and located in the other state, is taxable in that other state.”

Article 6 of said Convention provides:

“Income earned by a resident of one state from real estate (including income from agricultural or forestry operations) located in the other state is taxable in that other state.”

Thus, income from renting a property in Mauritius is only taxable in Mauritius (and therefore at 15%) and not in France.

The choice of the person or legal entity making the real estate acquisition is quite broad, allowing adaptation to the specific situation of each buyer, and thus optimizing the setup. They can purchase real estate by submitting an application to the EDB:

• A foreign national without Mauritian nationality (Non-citizen of Mauritius),
• a Mauritian citizen residing in Mauritius or a member of the diaspora,
• a commercial company registered and incorporated in Mauritius, according to the “Companies Act 2001”, (including in the cases of PDS, IRS, and RES, a Global Business company – Offshore company – managed by a management company approved by the “Financial Services Commission”),
• a real estate civil company whose statutes (Deeds of Formation) have been filed with the “Registrar of Companies”,
• a trust, as long as the administration of the trust is under a trustee approved (a management company or an individual approved by the “Financial Services Commission”),
• more rarely a foundation listed according to the “Foundations Act”. In a Foundation, the Founder puts the assets in the Foundation (like a Settlor in a Trust), and a Council of members manages the affairs and administers the assets of the Foundation like a board of directors managing a company. It can also have beneficiaries (similar to a trust) according to the terms of the Charter.

Implementing a real estate investment project in Mauritius requires not only time but also means, and above all, a good knowledge of the market. We work closely with banks, specialists in legal, tax, and administrative fields, and real estate professionals in Mauritius for several years. Please do not hesitate to contact us for your procedures so that we can provide you with concrete and tailor-made solutions, adapted to your needs and budget.