The real estate market in Mauritius has been open to foreign investors for the past twenty years. Today, despite the many challenges, real estate retains its status as a valuable asset for local and international investors, who are always on the lookout for new opportunities.
A constantly evolving market
The construction and real estate sector represents an essential pillar of the Mauritian economy. It contributes about 12% of GDP and generates about 20,000 direct and indirect jobs.
Since the introduction of the Integrated Resort Scheme (IRS) two decades ago - the first scheme for foreigners - the legal framework in Mauritius has significantly evolved. To support its foreign investor residency programme, the government announced in the 2022-2023 budget speech that foreign nationals residing on the island would be able to buy residential property directly on the local market, without having to join one of the existing real estate schemes. This announcement has not yet been finalised, as it awaits a decree or law, but recent events show how far the authorities have come.
Today, with the Property Development Scheme (PDS), it is becoming increasingly common to see property developments that include both expatriate and local investors, which may share common infrastructure or facilities. Such schemes are permitted under the Civil Code and a collective governing body - Association Foncière Mère, or parent property management association - is usually responsible for their management.
Is real estate a valuable asset?
This is a question that many people are asking themselves during this period of uncertainty. Rising interest rates, inflation and fluctuating financial markets are major challenges for investors; and the same is true in the world of real estate.
The increase of the inflation rate, together with the rise in interest rates and the fluctuation of the financial markets, are no longer subjects that we can ignore, given their influence at all levels: decrease in purchasing power, increase in prices and expenses (building materials and energy).
Real estate is characterised by its appreciation over time and is therefore less likely to be affected by external market fluctuations. In this sense, investment in real estate, accessible to Mauritians as well as foreigners, makes it possible to generate significant capital gains in an open market when the property is eventually sold. Moreover, real estate investment offers a higher potential return (between 3.5 and 9.5% depending on the type of property) than bank savings rates.
This is why many people turn to real estate rental investment, which remains an interesting proposition in the medium and long term, as it allows for monthly income generation, asset accumulation and speculation on a capital gain.
An attractive alternative to diversifying your assets
Real estate represents an interesting supplement to financial investments for individuals and investors, being considered as one of the most relevant means to diversify one's assets. As a tangible asset whose value tends to appreciate over time, it offers security in terms of investment, and thus allows for estate planning. Property investment also allows for potential market speculation by generating a capital gain, or to contribute to the improvement of one's purchasing power, or to prepare for retirement.
At Probus Pleion, through our subsidiary PLEION Real Estate, we serve as experienced advisors, and guide investors looking to position themselves in Mauritius or other attractive jurisdictions. We are impartial towards the range of products on offer and ensure that each investment is tailored to your requirements. Whether it is residential, income generating, mixed use (income plus short term rental) or commercial (office) projects, we will assess your situation and guide you through the buying process.
We also place particular emphasis on long-term support, especially for the effective management of the property or property portfolio. Moreover, we provide ancillary services to meet all of our clients' expectations (construction and/or maintenance monitoring), concierge services ( setting up on delivery of the property, installation, etc.), and administrative management (residence permits, etc.). We work in collaboration with trusted partners, bringing together several activities that allow us to maximise our clients' real estate investments both in terms of structure and finance.
Why choose Mauritius for your property investment?
There are a number of factors that contribute to making Mauritius the ideal country to invest in, including:
· its climate,
· its leisure activities and its diversified landscapes (sea, lagoons and mountains),
· its economic and political stability,
· its development (Mauritius benefits from the same services as European countries in terms of infrastructure and health services),
· the languages spoken in the country (French and English are the most common),
· the time zone (there is little time difference with the main nationalities of investors, first of all Europe, but also South Africa and the United Arab Emirates), and
· the ease of doing business (setting up a company in Mauritius is quick and easy).
The quality and professionalism of property developments are essential components. Thanks to reinforced regulations and protections, such as the future state of completion guarantee and the ten-year guarantee, investors feel reassured to position themselves on a VEFA (sale in future state of completion) property investment. These regulations offer them increased security.
Mauritius is a popular destination for investors due to the diversity of properties on offer, as well as the fairly wide range of investment budgets. In addition, Mauritius has tax treaties with many countries, which offer considerable advantages to foreign investors, including the absence of double taxation on property income. Another advantage of the Mauritian tax system is that there is no capital gains tax on the resale of property.
A leading tourist destination, rental investment is, in this respect, an opportunity for an individual to make their property (appartement, penthouse or villa) available to these tourists in order to generate short-term rental income. Investment in office space is also growing considerably and is still very popular. Mauritius is a business-friendly International Financial Centre with an ecosystem (bilateral and multilateral relations, hybrid legal system) that is attractive to foreign companies, entrepreneurs and investors. Commercial real estate therefore represents a safe investment opportunity with an attractive return.
The island has a welcoming immigration policy. Subject to certain conditions, the government grants residence permits to retirees, self-employed, investors and entrepreneurs. This immigration policy encourages the development of luxury residential programmes in Mauritius.
The island has one of the most attractive tax environments in Africa. Income is taxed at a flat rate of 15%, both for companies and employees, although there are some exceptions, such as for import-export or global business activities. This system is much more advantageous than most countries, which attracts expats from different backgrounds.
If we step back a few years and analyse the transactions, we see a linear positive evolution of the appreciation of the assets. Real estate has always been a valuable investment during crises, and Mauritius has managed to remain attractive by combining all these advantages.