The Mauritius Finance (Miscellaneous Provisions) Act 2020 (the Act) was passed into law after receiving the President’s assent last month. While the Act introduces a number of wide ranging changes, which we consider in detail elsewhere, in this article we only consider the changes relating to Mauritius Residence. The purpose of these changes is to reduce and where appropriate remove barriers to encourage the economic activity of non-Mauritius citizens to take up residence and to pursue business activities.
Residence
To increase the attractiveness of Mauritius as a leading global destination for residence and citizenship the following changes have been made to the Immigration Act.
- Under the Permanent Resident Program the capital investment in residential property acquired for personal (family) use has been reduced from USD500,000 to USD375,000. The other existing conditions for residence remain unchanged and are set out in our information sheet Mauritius Residence Overview available on request.
- The validity of an individual’s permanent residence permit has been extended to 20 years, from the previous 10 years, with the validity of an occupation permit from 3 years to 10 years which covers both investors and self-employed individuals. In cases where an individual has held an occupation permit for 3 years or more before 1 September 2020 could qualify for permanent residence if the criteria of the Economic Development Board Act are met.
- Furthermore, the parents of a holder of a residence permit or occupation permit will be granted resident status.
- The regulations affecting retired non-citizens who are holders of an occupational permit or residence permit, have been relaxed to allow investment in any business providing the individual is not employed in the business or manages the business and does not receive a salary or employment benefits from that business.
Other Changes – Solidarity Levy
As a brief résumé, personal taxation of a resident individual’s income is at a flat rate of 15%, on Mauritius-source income and such foreign income that the individual remits to Mauritius. An individual would not be subject to tax on capital gains, inheritance, wealth, gift and real property, nor withholding tax on dividends.
To become tax resident requires the individual to be physically resident in Mauritius for a minimum of 183 days each calendar year.
The good news is the Act has not changed the tax position significantly from the existing highly advantageous position enjoyed by foreign residents.
A new Solidarity Levy has been introduced at the rate of 25% on income in excess of MUR3million (approximately USD 73,500). However, the levy is subject to a cap that provides that the levy shall not be more than 10% of the individual’s net income. The calculation of the net income, includes dividends received from Mauritian resident companies but excludes any lump sum payment as commutation of pension or compensation for injury or benefit or compensation on death. The levy will be withheld under the existing PAYE system.
It is hoped that the Solidarity Levy, which has been introduced as a result of the economic impact of Covid, will be no more than a temporary measure.
For more information about Citizenship and Residence services in Mauritius, or elsewhere please contact Simon Huxford: s.huxford@rosemont-mc.com or request or Citizenship and Residence e-brochure.
Subscribe to our newsletter and don’t miss our news.