|
 Mauritius
is putting the rich first when it comes to expanding the tourism and
hospitality sectors in a strategy that focuses on exclusivity.
But to offset criticism in a country where the gross domestic product
per capita is below $7,000, the government is also promoting training
and social programmes with the help of international developers to provide
more than just low-grade work.
To boost international real estate interest, there is the integrated
resort scheme (IRS), allowing foreigners to obtain residency if they
spend a minimum $500,000 on a property at several developments under
way across the island. Incentives are also offered to encourage construction
in sectors including offices to hospitals to biotech.
“We want the local community fully integrated with these developments,”
says Rama Sithanen, deputy prime minister and finance minister. “We
are encouraging outsourcing to SMEs, talking with fishermen and planters
and helping with training and economic empowerment.”
The IRS was born about five years ago, allowing former sugar estates
to convert into luxury resorts with hotels, spas, golf courses and other
leisure amenities along with residential villas and properties sold
for between $1m and $4m. Mauritius ended its restrictions on property
purchases by foreigners and streamlined residency, tax, work and other
bureaucratic legislation.
“Apart from being a beautiful place, Mauritius is friendly and
offers safety, democracy and the rule of law,” says Xavier Luc
Duval, tourism minister. “Coupled with the growth in tourism, the
IRS offers good investment and rental prospects.”
The Board of Investment has approved 10 projects, representing about
3,500 units. High prices and careful approvals are intended to prevent
any flooding of the market.
“We are promoting aesthetic beauty while at the same time retaining
our cachet and reputation for hospitality,” says Raju Jaddoo, managing
director. He says the government will make about 25 per cent from the
sale of each villa, mostly from the developer. “The government
will get between $150,000 and $200,000 straight away and paid at source.”
This includes land transfer and registration costs.
Buyers and developers are enticed by Mauritius’s flat 15 per cent
tax rate and no capital, inheritance or withholding taxes. The downside
is that some facilities, such as shops nearby, have yet to be developed.
The developer must also provide an environmental and social impact
study and pay about $6,000 per villa into a social fund. This money
can be held in an account controlled by the developer but must be spent
in accordance with the study and under scrutiny from outside auditors.
“If the money was transferred to the government, then all sorts
of rules to do with things like procurement would have to come in,”
says Mr Jaddoo.
Anton de Waal, chief executive officer of the Villas Valriche resort
that is under construction, says its social fund has four pillars: to
raise awareness; employment and training; infrastructure such as water
provision; and a venture capital fund to boost entrepreneurship in fields
such as arts and crafts.
Property buyers are mostly from Europe but also from South Africa,
India, Russia, Australia, the United Arab Emirates and the US and appear
to be hooked by the resorts’ exclusivity and modern-colonial design.
Banyan Tree Corniche Bay, for example, is designed by the UK-based
Foster and Partners, which is using local materials and the resort will
be car-free and use electric vehicles.
The Anahita resort is close to completion and has sold 143 properties
out of 320. Seamus Moore, sales manager, says a lot of time was spent
educating buyers about the complex paperwork that is needed to obtain
residency and to prevent money laundering.
“It’s a lengthy process and some people even spoke of invasion
of privacy, but I don’t agree,” he says. “Financial intelligence
and controls are needed and there’s no way round that.”
Local Mauritians keen to develop small plots of land but with few other
resources are being encouraged under the Real Estate Scheme run by the
Board of Investment. Sellers are put in touch with developers and potential
buyers include diaspora Mauritians and foreigners who wish to buy for
residential or business purposes.
“This is more suited to professionals rather than people in the
luxury market and we wanted to give opportunities to people in Mauritius
to leverage their land,” says Mr Jaddu. “Lots of Mauritians
have made money in the UK property market, for example, and we want
to encourage them to come and give us a helping hand.”
|
