This is a guest piece, written by Grant Smee, MD and founder of Only Realty. His company lists homes for sale and rental.
April 21 2023
Enticed by untapped markets and the prospect of tax incentives for foreign investors, a growing number of South African entrepreneurs are choosing to expand their operations offshore.
Mauritius is emerging as a particularly popular location for South African entrepreneurs to expand their operations due to its close proximity, attractive tax laws and the lifestyle benefits the island offers.
Only Realty is set to open up its first non-South African branch in Bonne Terre, Vacoas, Mauritius under the name Only Realty Mauritius.
We will begin official operations in May, focusing North Grand Bay to the South West of Mauritius in the Black River Tamarin area where most South Africans relocate.
Sebastien Brazeau will head up the new branch.
We have already listed some exciting Mauritian properties and will be facilitating both rentals and sales, with a particular focus on sales of new residential developments.
The country is the easiest Plan B for South African entrepreneurs who want an alternative investment and offers an accessible emigration option through its residency permit that can extend to three generations of a family.
Mauritius in the spotlight
This small island nation with a population of 1.27-million, is considered the safest country in Africa and offers investors both political and economic stability, with a GDP of $11.53bn as of 2021. Mauritius residents pay income tax of only 15% and are not required to pay dividend tax, withholding tax on interest and dividends, capital gains tax or rates and taxes on a property, unlike South Africa residents. Residents are also entitled to a free repatriation of profits.
In 2015, the country signed a tax treaty with South Africa to eliminate double taxation, meaning that only the country of origin is entitled to tax rather than a business having to pay tax in both countries.
One of the most significant benefits of starting a business in Mauritius is the tax incentives for foreign investors. Businesses can benefit from a four-year tax holiday if they are holders of a registration certificate issued by SME Mauritius, have an annual turnover of less than 30 million rupees and are not involved in the ICT or financial services industry.
Post-COVID 19, many entrepreneurs have chosen to become remote workers. They too can benefit from Mauritius’ premium visa which allows remote workers to stay in the country for up to a year without the requirement to pay tax on any income earned while in the country.
Benefits of international expansion
- Increased business diversification. “By reducing your reliance on a single market you are protected from economic downturns.”
- Potential cost-savings. “Lower labour costs and tax incentives can result in improved profitability.”
- Access to new markets. “Untapped markets mean a brand-new customer base.”
- Increased brand exposure and awareness. “Giving you enhanced brand value and credibility in the international marketplace.”
Challenges of international expansion
- Increased complexity and risks. “Challenges include navigating foreign laws and currency fluctuations.”
- Significant initial investment. “Upfront costs include market research, legal compliance and establishing a local presence.”
- Competitive challenges. “Established local businesses may have a better understanding of the local market and customer preferences.”
- Operational challenges. “These include logistics, supply chain management and language barriers.”