Mauritius | Real Estate

January 25, 2012

Foreign Investors: Are They Welcome?

Of recent incidents involving foreigners living in Mauritius have reopened the debate on the opening of the Mauritian economy and the ease with which foreigners become residents in Mauritius.

Rs 14 billion of foreign direct investment in Mauritius in 2010, and nearly Rs 10 billion in 2011. To date, ten projects IHS (Invest Hotel Scheme), thirty projects RES (Real Estate Scheme) and a couple of IRS projects with a total of 577 villas sold until 2010 ... The real estate sector is in turmoil but the growing number of foreigners on our soil seems to worry Mauritians ... Myth or reality? 

Despite the general perception, foreigners have not yet invaded the island of Mauritius and have not bought our lands. The law is very strict regarding the purchase of real estate by foreigners. These can be acquired only under the IRS plans, RES, or IHS. Investors can also buy a property for their operations, such as a hotel, office, factory, farm, etc.. But the application process is strict and the applicant must convince the authorities about the seriousness and viability of the project. To date, the number of villas or land purchased by foreigners, in terms of area, may represent less than 1% of the total area of the country! The number of investors, professional or retired foreigners living in Mauritius is estimated at about 10,000, which is also less than 1% of the population. For cons, the contribution of foreign investment to GDP is substantial.

Exorbitant price

While the number of brokers is increasing day by day, and anyone with a portion of land on the coast, or even elsewhere, the dream of sell to a stranger at a price bordering on indecency, in fact, none of the land has been sold, although more than half the country is covered with signs "For Sale / For sale". Haroon, a farmer of the North, offers his land to Rs 25 million an acre. He waits for a client ... 20 years.

Dhiren, he hopes to sell its agricultural land of 88 perches in Grand Bay at not less than Rs 15 million. He is still waiting. Like them, they are hundreds of landowners who are waiting get a "rich foreigner" to acquire their land for an astronomical price. The temptation to hit the jackpot because of fertile land have been abandoned. Difficult to explain to them that foreigners are not allowed to buy land anywhere, and also that these prices, they may wait forever. Some, for against, have been luckier! 

Foreigners them are aware of changes in the land market and the real value of land.Speculation is certainly drive up the price, but the land does not sell as fast, contrary to popular belief. While some foreign businessmen have been fooled by paying much more for a marginal field, others prefer to wait and haggle the price. Philippe, a French national, is looking for land to set up a project RES. "With the price they offered me the project will never be viable," he concedes. "In many cases, there are too many middlemen, thus inflating the price." Michel, himself, was offered land to the state in the range of Rs 15 to Rs 90 million an acre! "These people were able to get government land for a pittance, and they want to in turn sell it to foreign investors to 100 times more. 

I think it would have been ideal if the government itself issued a call bids from serious investors and the money would have landed in the public coffers and not into the pocket of an individual. " To Patricia, one of South Africa, it is proposed farmland abandoned in the fields and through the trails impassable for gold. "No question of interest to me," she said. The opening of the economy makes people dream. "Ironically, on the one hand, people complain of too many foreigners coming, while the other, the same people want to sell or rent to foreigners only," she says.

Benefits

Foreign investment in Mauritius are encouraged because they help create new jobs, they bring new technology and knowledge transfer, and also have a multiplier effect on the economy. Everyone is benefiting: rental homes, private schools, restaurants, taxis, shops, supermarkets, equipment suppliers, car dealers, banks and insurance, private health services, etc.. 

Investment in Sustainable Development and in sectors that create wealth, such as manufacturing, agriculture and processing into value-added, is always welcome. Foreign entrepreneurs have invested in several sectors, including real estate, financial services, manufacturing, health, education, ICT and logistics. The more foreigners, the more the economy is. But is that all foreign investment is beneficial to the country? 

About 65% of real estate investment concern, which is an investment "one-off." Consider also the case of IRS villas. A villa can be initially sold to two million dollars but the government affects only 75,000 dollars as registration fee, which amounts to less than 4%! In case of resale, there is no Capital Gains Tax to pay! On the other hand, the government has to find tens of billions to invest in the necessary infrastructure to meet the needs of these projects. 

Thus, it is the taxpayers who have to fork out the cost to increase the supply capacity of water and electricity and road construction. There are also projects that, although they bring in foreign countries also contribute to environmental degradation. Then there are activities that are in direct competition with local entrepreneurs. Although entrepreneurs welcome the competition, many of them complain that sometimes foreigners are better equipped in terms of technology, expertise and finance, and they are more able to be a customer. The local market is very small, some sectors are quickly saturated. 

RES: Beware of Scam 

The RES are not as happy. According to the regulations, an alien has no right to purchase land for a project under the Plan Real Estate Scheme. He must enter into partnership with a land owner. The aim is to give the owner the opportunity to become a Mauritian real estate developer. In practice, the owner gives his land for the project at an agreed price, but it will not receive the money at the end of the project. In some cases, this concept is not well explained to the owner of land. 

Thus, they are likely to have signed a partnership without knowing that a project can take years to achieve. Then you have to wait until the sale of villas. There is also the risk that eventually the profits of the company RES are below expectations! 

Small farmers have been trapped. They offered their land and they must now wait. Another drawback, they can not even cancel the contract without having to face penalties, as in many cases, lack of proper guidance, they do not realize that the contract is often drawn in favor of the foreign investor.Some disputes are pending before the court. They complain that the authorities have not established the necessary structures to educate people who want to develop their land under the RES. 

Sylvie de Maudave-Bestel, Director Gail Gavrill International: "The real draw, despite the crisis"

Mauritius island paradise, friendly atmosphere, good governance, strong and stable currency. These are the strengths of Sylvie Maudave-Bestel, professional real estate, puts forward its plans to sell to foreigners. 

> Who is Sylvie de Maudave-Bestel? 

I am a real estate professional, having operated in the development and promotion of commercial and residential properties for over 27 years in South Africa. So I decided to expand my business and relocating to Mauritius, I focus primarily on projects RES (Real Estate Scheme). I bring my expertise, my knowledge and expertise to help local landowners to develop their property, while adopting a culture of environmentally friendly architecture of the island. Mauritius is an island paradise and is above all its natural beauty, friendly atmosphere and unique beaches in the world that attract customers. We must therefore maintain these assets.

> The real estate sector, especially the RES, is not affected by the global economic crisis? 

Despite a difficult economic situation, lifestyle in Mauritius and the advisability of investing in a tropical island continues to attract foreign investors! Envious of his status as the African country with the best record of good governance, a strong and stable currency, banking facilities and excellent health, Mauritius became the obvious choice, especially for South Africans who are considering a "offshore home from home." Foreign investment is encouraged here, and many are those who wish to Maurice their country of residence. To encourage foreign investment, the Mauritian government has established property regimes such as the IRS (Integrated Resort Scheme) and RES (Real Estate Scheme) - both of which have been successful. In addition, the BoI (Board of Investment) requires developers to provide a bank guarantee to protect the possible acquisition of real property, if ever a project fails. This concept assures investors.

> What are your current projects? 

My new project, "The Butterfly", located in the north of the island, is associated with luxury and extravagance. Unlike most developers who maximize their profits by squeezing as many houses as possible in development, the designers of "The Butterflies" have chosen to break this trend. Only 40% of over 7,000 m2 of land will be occupied by construction. This is not a mass housing program, but an elegant project for a more mature market. Already, the news spread by word of mouth, and the first firm bookings have been made, even before the launch, scheduled after obtaining the approval of the BoI, which will not be long. This will be achieved by DLB Construction, which is already a reference in the sector. 

HSBC celebrates the Year of the Dragon 

HSBC celebrated the Year of the Dragon, which looks under the sign of water on Wednesday 18 Last January, during a dinner in the ambiance of Domaine Anna. There were among the guests, customers of Corporate Banking, Retail Banking and those of wealth management and also those of Global Business. The evening was held in a friendly atmosphere. It all started with a cocktail and then the guests attended the famous lion dance. Dean Lam (Head of Corporate Banking) and Siew Meng Tan (CEO of HSBC Mauritius) welcomed the guests. During dinner, the 'Fortune teller' announced his predictions for the year of Dragon. The dragon has long awaited finally manifested and made a parade of the most impressive. 

 

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