Global Courant
While South Africa’s economy has been stagnant due to a myriad of economic problems, Mautrius’ free market economy has attracted large amounts of foreign investment.
Dani van Vuuren, business development consultant at Sovereign Trust, said Mauritius’ growth is expected to increase by 75% over the next 10 years, with the country becoming a hotspot for relocations and startups.
An important growth engine is the tax benefits that the East African island state offers foreign investors. Corporate and personal income taxes are taxed at just 15% and additional concessions are available.
“Tax residents of Mauritius are only taxed on income from Mauritius and there is no capital gains tax or inheritance tax. Moreover, there are no exchange controls, which provides the ideal gateway for international business expansion,” says Van Vureem.
Moreover, the free market economy of Mauritius has much less strict labor laws than South Africa.
Speak against CapeTalkHonorary Consul of the Republic of Mauritius Mukhtar Joonas said that the free market approach in Mauritius has contributed to the growth of the economy.
“In the short term, a few people get hurt, but it’s a way to weed out those who aren’t efficient and really productive. So in the medium to long term, it’s a great benefit,” Jones said.
He said Mauritius currently has an unemployment rate of 3%. South Africa, on the other hand, has an unemployment rate of 32.9%.
While acknowledging that Maurtius’ policies may not apply to a country with a population of 45 times as many, Jones said South Africa’s labor laws are a major problem.
He said strikes and red tape hinder employment in the country, unlike in Mauritius, where employers are free to hire whoever they want.
“You have to update your labor laws if you want to create employment,” he said.
He said divorcing someone is easier than firing someone in South Africa and investors prefer to invest in real estate over companies with employees and managers.
He added that South African workers are overprotected and their wages are too high, adding that more competitive wages could help with unemployment in the country.
Attract investment
Mauritius has recently seen an influx of wealthy individuals into the country, with a thriving luxury real estate market.
International estate agents and local developers said British, Europeans and South Africans see the island as a ‘safe haven’ for investment.
The Africa Wealth Report 2022 said Mauritius is home to just under 5,000 high net worth individuals (HNWIs), a growth of almost 80% over the previous decade. HNWIs love the island for its strategic location, dynamic business landscape and favorable tax regime.
The island is highly coveted by wealthy individuals around the world for its strategic location, dynamic business landscape and favorable tax regime.
“Foreign investors are drawn to Mauritius for its lifestyle, but also because it is considered one of the safest African countries with a dynamic economy and a stable political framework. Fiscally it makes sense as property buyers see a good capital increase on their investment,” from Robert Green Bol estates said.
He added that more families are moving to the island because of the lavish lifestyle on offer, the ease of doing business and the high-quality schools.
Christophe Piquet van Heritage villas Valriche also noted that luxury buyers were changing demographics.
“Heritage Villas Valriche has typically attracted buyers who are 50+, have taken early retirement, sold their businesses and have a love of golf, travel and the great outdoors. We are now starting to attract families and also developers who buy and build to resell,” said Piquet,
Read: ‘New’ type of emigration hits South Africa – and young professionals are behind the drive
