Tuesday, January 18

Mauritius makes residency even more attractive to South Africans


Mauritius has officially reopened its borders to South Africans, ending the 18-month travel ban on visitors to South Africa. The Mauritius Tourism Promotion Authority (MTPA) openly welcomed South African tourists back to the shores of Mauritius, which is a testament to the relationship between the two countries.

This sigh of relief comes at a time when many South Africans are looking for countries to emigrate or travel to. Whether expanding their businesses, waiting for a retirement on the beach, or planning a fresh start with their families, the island already ticks all the boxes.

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If you are contemplating a permanent move, these points explain why Mauritius is a viable option.

Benefits of obtaining residency in Mauritius

Mauritius offers a stable and diverse economy, low unemployment, thriving trading platforms, and beach views that call for regular sunset cocktails.

Investment requirements decreased

The prerequisites for obtaining any type of residence permit through investment have been adjusted to make residency more attractive. The minimum investment required to obtain a Work Permit (OP) was reduced from $ 100,000 to $ 50,000, while permanent residence permits through real estate investments were reduced from a threshold of $ 500,000 to $ 375,000.

Extended validity permits

Retirement permits were valid for only three years, but have now been extended to ten years. The period of validity of permanent residence permits, as well as work permits, has been extended from ten to twenty years, which represents a substantial adjustment.

Real estate on the island

The idea of ​​owning a vacation home can be contagious. Expats and tourists visiting Mauritius often succumb to the dream of living on the island. Property can be acquired by investing in a freehold property or by applying for a 99-year renewable lease in which title to the property remains in the name of the applicant.

Work on your own or remotely

Even self-employment permits will now only cost you $ 35,000, valid for ten years from the date of issue. For the freelance digital nomad, this creates a dream remote workplace, making it hard to pass up.

These points make the visa application process a rewarding and smooth exercise.

The difficulty of leaving South Africa

While the Mauritian government is committed to streamlining the immigration process, the difficulty arises from disentangling itself from the South African tax network. Depending on the complexities of your circumstances, the exit process can become unnecessarily complex.

For example, on March 1, 2021, the three-year lockdown rule on retirement funds went into effect in South Africa. Those who relied on collecting a lump sum before the expiration date of their conservation funds or retirement annuities to invest in Mauritian properties and therefore ‘buy’ their residence must now be non-tax residents of South Africa for three consecutive years before. gaining access to your retirement savings.

The process of becoming a non-resident for tax purposes is not automatic, it is a formal declaration that must be made to the Sars. It is necessary to fully comply with the Sars to achieve non-residence taking into account that there are consequences of capital gains tax (CGT) with the cessation of tax residence. Being able to objectively demonstrate the permanent intention to stay abroad and not return to SA is the most important requirement.

Making use of financial emigration or applying the Double Taxation Agreement between Mauritius and South Africa is the prudent approach in these circumstances.

conclusion

Mauritius is not only a vacation paradise in the Indian Ocean, it is also only a four hour flight away, making it a hop from South Africa to visit family and friends. Precisely for these reasons, Mauritius meets all the requirements, from competitive business establishment costs, a more discretionary immigration process rather than stringent legal requirements, to a faster route to permanent residence than countries such as the United Kingdom, the United States and even Portugal.

As such, before embarking on or exploring your options on your trip to Mauritius, where the ultimate goal is to obtain permanent residence, it is vital to have clarity about your tax residency status and advice on how to minimize your tax liability when immigrating to Mauritius.

Zainab Bouziane is an expat solutions specialist at Xpatweb; and Reinert van Rensburg is an expatriate tax specialist in Tax Consulting.


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