Those keen on relocating from South Africa to Mauritius will be buoyed by the island’s recent whitelisting by the Financial Action Task Force (FATF). As a result, the island government expects a significant boost in business promotion and tourism.
The global money laundering and terrorist financing watchdog placed Mauritius on its grey list last year. This was due to strategic deficiencies identified in FATF’s Anti-money Laundering and Counter-terrorism Financing (AML/CFT) framework. As a result, the EU followed suit and placed Mauritius on the EU Blacklist on October 1, 2020.
Following its October 2021 plenary, the FATF concluded that they would not subject Mauritius to further increased monitoring. That was after the Mauritius government filed its final progress report in 14 months and the FATF completed a site inspection and met with political leaders.
South Africans moving to Mauritius
The country’s whitelisting by the FATF became effective on October 21, 2021. This bodes well for those interested in moving from South Africa to Mauritius. In fact, it is “such good news all round for Mauritius as a jurisdiction”, notes Tim Mertens, chairman of Sovereign Trust (SA). Sovereign Trust (SA) Limited is part of an international group of 26 offices (in 22 countries) offering retirement solutions from a number of jurisdictions, allowing a “best fit” approach and optimal tax planning. Its personal wealth services help clients to preserve, enjoy and pass on the rewards of their success through a range of international structuring vehicles, including trusts, foundations and companies.
The FATF whitelisting is of particular interest to South African investors relocating to Mauritius. They are increasingly attracted by Economic Development Board (EDB) incentives that make it cheaper and easier to live and work on the island. These include an attractive tax regime as well as Mauritius residency by investment.
Occupation permit for investors moving to Mauritius
The global business company, the authorised company and the domestic company can be set up in Mauritius. “It’s important to understand the differences between the three types of companies before you start setting up your business in Mauritius. You should take expert advice from companies that already have a footprint in Mauritius. They can guide you through the incorporation process, opening of Mauritius bank accounts, accounting as well as residency permit applications for employees who wish to relocate to Mauritius,” says Sovereign Trust (SA) Limited director Coreen van der Merwe.
Last year, Mauritius reduced the minimum investment for a foreign investor to obtain an occupation permit from USD 100,000 (R 1,7 million) to USD 50,000 (R 867,000). This permit is valid for 10 years as opposed to three. Spouses of occupation permit holders no longer require a separate permit to invest or work in Mauritius. Successful applicants may also bring their dependent parents and children to live with them.
Growing community of expats
“There is a dynamic and growing community of expatriate South Africans on the island. The changes to the requirements for the various permits and acquisition of land are clear incentives to make it more attractive to prospective investors, talented individuals and expatriates wishing to base themselves in Mauritius,” says Van der Merwe. “We expect to see more South Africans streaming to the island to live and work.”
Meanwhile, in a November 2021 roundtable lunch hosted by Mertens, the Honourable Mahen Kumar Seeruttun, Minister of Financial Services and Good Governance, unpacked the outlook for Mauritius. “Now that we have satisfied all the necessary compliance standards, it is time to reposition Mauritius as a reputable jurisdiction to do business. Mauritius has a lot to offer businesses and the community in South Africa. We can provide different structures for different categories of businesses,” he says.
The roundtable lunch was part of a high-level mission, organised by the Mauritian Economic Development Board (EDB), and led by the Honourable Mahen Kumar Seeruttun, Minister of Financial Services and Good Governance.
Buying property as a South African
Minister Seeruttun highlighted the island’s political stability and demographic system. Every five years there are free and fair elections, and there is a smooth changeover if ever the ruling party changes. The banking system is strong and well regulated, and there is a hybrid and independent legal system. Procedural law in criminal and civil litigation is mainly English, while substantive law is based chiefly on the French Napoleonic Code. “There is also a pool of good, highly trained professionals in business schools overseas who can provide good advice, and there are big auditing firms and insurance companies in Mauritius. For me, this is one sector with big potential to grow further. Even during the pandemic, this sector was still positive when everything else was crumbling,” he says.
Great tech infrastructure
Mauritius has a good technological structure in terms of connectivity and speed. This ensured that business professionals could continue to work from home while the entire country was in lockdown. “Overnight, we shifted from work in the office to home. Regulators were able to provide all information to clients and continue to work in a normal situation. This is something we want to showcase to South Africans relocating to Mauritius,” says Minister Seeruttun. “Our infrastructure ensures things can be done swiftly and easily. We have the World Bank ranking of 13th worldwide for ease of doing business, and we are first in this region. And we want to keep improving on that. Then of course there is the tropical island lifestyle. Mauritius is a safe place, and you can enjoy a good time there.”
Vaccination campaign ongoing
What aspects are key for South Africans relocating to Mauritius? Ease of application is one thing, and the fact that Mauritius is “next door” to South Africa – just a four-hour flight from Johannesburg. “We share the same kind of weather conditions and the outdoor lifestyle. We offer facilities to buy property. When you invest at a certain level you can own a property in Mauritius within designated projects. Because of the pandemic – and the ability to work from anywhere – we offer the Premium Visa for those who want to come and work in Mauritius, stay for one year, and not pay tax as long as their activities are overseas and revenue is being remitted abroad. Certain cases can be treated on a case-to-case basis as well,” says Minister Seeruttun.
Recovery phase
Meanwhile, the island’s management of the Covid-19 pandemic has been praised by organisations such as the IMF for the strict health measures implemented early in response to the prevailing crisis. In April 2021, the IMF recommended that “during the recovery phase, the authorities should prioritize support measures to further improve competitiveness, enhance diversification, and accelerate the long-term structural transformation to turn Mauritius into a sustainable and resilient economy built on education and technology. The mission welcomed the authorities’ concerted efforts to exit from the FATF and EU Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) lists and encouraged them to keep up these efforts”.
Cautious optimism
The island government closed borders and imposed a total lockdown for three months to stop the spread of the virus. From June 2020 to January 2021, Mauritius was Covid-free and Covid-safe. Still, borders remained closed except for some scheduled flights for stranded Mauritians. Unfortunately, in January 2021 there were a few confirmed cases, and the virus began to spread again.
“Vaccines were not readily available to a small country. Through diplomatic relations with India, China, Russia, and the EU, we sourced sufficient vaccines to begin the vaccination process. We aimed to vaccinate 60% of the adult population by the end of September. That is why we started to relax the measures we had in place. The campaign is ongoing to vaccinate the whole population. We have sourced Pfizer vaccinations for u18s. Borders are open, and figures for tourist arrivals and bookings are very encouraging. Some big hotels are already at over 70% occupancy, which is very promising,” says Minister Seeruttun.
Support for investors moving to Mauritius
“The government intervened to support different industries, which helped to get the social atmosphere right in Mauritius. I felt it was time to start talking to the business community in South Africa about relocating to Mauritius. I wanted to reconnect, and share what we have on offer.”
A free trade agreement with China (a first for an African country) came into effect in January 2021. And the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) between Mauritius and India took effect in April 2021.
With the economy opening up again, how will government maintain its whitelisting to motivate South Africans to relocate to Mauritius? “It’s an ongoing process,” says Minister Seeruttun. “We have the right people, and will keep training them, especially the law enforcement agencies, to stay up to date. Different international agencies provide this kind of support. We have implemented a system to deal with financial crimes and expedite cases when necessary.”
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