The famous French writer Bernardin de St Pierre once wrote that "God was inspired by Mauritius to create paradise". Although this is a very poetic statement, the reality is not too far away from this.

Since its independence in 1968, Mauritius continues to prosper as a tourist destination. With some of the loveliest beaches in the world, and its continued growth, it is increasingly becoming a highly competitive financial and economic hub in the Indian Ocean Islands. Until recently, it was almost impossible for foreigners to obtain residency or to purchase immovable property in Mauritius, however the recent introduction of Integrated Resort Scheme’s (IRS), now allows foreigners to live and own designated immoveable property on the paradise island of Mauritius. Not only do they get a piece of paradise, but also are provided the opportunity to obtain residency and the right to work on the island.

What is the IRS ?

Under the IRS, luxury villas are constructed and sold to foreigners for a minimum value of USD 500,000. Upon acquisition of the luxury villa, the buyer and his/her family obtain residency in Mauritius which is enforced, so long as he/she continues to own the property.

The property can either be acquired directly by the foreigner in his own name of via a tax beneficial structure. The acquisition via a tax beneficial structure will in no way impede negatively on residency of the ultimate acquirer or his designated representative.

Luxury villas

Under the IRS, the extent of land in respect of each villa may not exceed 0.5276 hectares, with Villa’s being acquired off plan or during the construction phase. The IRS developments are of international standards and include high-class facilities and amenities such as:

  • golf course
  • Marina
  • Individual swimming pool
  • Health and beauty centres
  • A range of sporting facilities
  • High class restaurants

In addition, maintenance, waste disposal, gardening, security and other household services are also provided.

Who can apply to buy a villa under IRS?

Any one of the following can apply under the Scheme:

  • A non- citizen of Mauritius (which includes his spouse and dependants);
  • A foreign company under the Companies Act (of Mauritius) 2001;
  • A citizen of Mauritius;
  • A company incorporated under the Companies Act 2001.

Selling of immovable property

Subject to providing the Board of Investment with at least 30 days notice prior to sale, it is possible to sell the villa at any point in time. However, disposal of the villa is also tantamount to loss of residency in Mauritius. The residency will be passed on to the acquirer or anyone designated by him

Appropriate holdings structure

Buying a property on the island can be considered as both a solid long-term investment and a holiday destination in paradise. However, once a property has been identified by the prospective buyer, a number of questions that arises such as:

  1. What is the optimum structure to purchase the property?
  2. Who will manage payment and keep track of all levies, bills and VAT associated with the property when the buyer is not in Mauritius?
  3. How will the necessary outgoing payments for the purchase of the property be effected? and
  4. Where would the buyer go for assistance?

In order to attend the all the issues above, we have set up a dedicated Company, namely IRS Management Services Ltd. IRS Management Services provides a one stop shop for IRS investors in the provision of the following services:

Advise on the appropriate structure to hold the property.

The pool of qualified and experience personnel have designed the most appropriate structures to hold the property bearing in mind the interest of a prospective buyer in terms of asset protection, tax planning as well as estate planning.

Set up and management of the holding structure(s).

Once the appropriate holding structure has been agreed upon, IRS Management Services can set up the structure both locally and abroad. The persons assigned to setting up the appropriate structures have a long standing experience in holding structure formation and hence are in a position to set up the appropriate structure in a matter of days provided all the appropriate "know your client" documentation is made available.

Once the appropriate structure is set up, IRS Management Ltd will manage the structure via the provision of a variety of services ranging from Registered Office to Company Secretary to Directorship. By providing these services, IRS Management Ltd asssures itself that the structure is compliant with all applicable laws of the land.

Liaising with banks for financing

IRS Management Services has developed a privileged relationship with the banks and can hence act as an intermediary when application is done to the banks for financing.

The major banks on the Island do finance the acquisition of IRS villas. As a general guideline, the criteria for loan finance are as follows:

  • Loan to value ration of up to 80% of the purchase price of the IRS property
  • Up to 100% funding with additional collateral
  • Maximum term of 10 years fully amortising
  • Flexible terms and conditions
  • Multi-currency funding
  • Ability to switch currency

As an indication incentive finance rates provided by one of the banks are as follows:

USD – LIBOR plus 2.50%

EUR – LIBOR plus 2.50%

GBP – LIBOR plus 2.50%

ZAR – JIBAR plus 3.00%

Raising fee 0.5% of the facility amount if secured with cession of life cover, otherwise 1%

Liaise with the IRS developer regarding the application documents.

IRS Management Services Ltd is fully conversant on the procedures to be followed to acquire an IRS Property. The key personnel of IRS Management Services have developed a privileged relationship with some of the IRS promoters and would be delighted to act as the intermediary between the IRS promoter and the IRS buyer.

Manage the Property acquired.

Once a property is acquired, IRS Management Services Ltd is fully equipped to manage the property by providing services such as administration and payment of insurance, collecting rental income if the property is rented out, pay all running costs, VAT registration, accounting, administering the property (where applicable).

For more information on IRS and / or the optimum way to hold an IRS property please contact IRS Management Services at kmaillard@inter-oceanmgt.com or write to the Director, IRS Management Services Ltd, Suite 320, 3rd Floor, Barkly Wharf, Le Caudan Waterfront, Port Louis, Mauritius.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.