Mauritius Government Criticised For Inconsistent Regulatory Attitudes

by Lorys Charalambous, Tax-News.com, Cyprus

09 June 2003

While the Mauritius Financial Services Commission (FSC) continues to elaborate a careful set of rules aimed at ensuring the utmost respectability on the part of local financial sector employees, the Government has excited some local criticism after issuing permissions for a number of developments under its Integrated Resort Scheme, which allows the purchasers of $0.5m properties to acquire residence privileges with a minimal amount of formality.

Last November the FSC issued a 'Guide to Fit and Proper' under Section 14 (2) of the Financial Services Development Act, which requires the Commission to satisfy itself that an applicant is "fit and proper" before it issues a licence to that person. Paragraph 10 of the Guide referred to the collection of the information deemed necessary to enable FSC to determine whether an applicant is "fit and proper", and the FSC has now issued two "Personal Questionnaire" (PQ) Forms for consultation. The first form deals with Category 1 Global Business Companies, Management Companies and other applicants under s 14 of the Financial Services Development Act, and the second deals with Category 2 Global Business Companies. The FSC now invites comments on these forms, which extend to 14 pages. Comments should reach the Commission on or before 30 June 2003

Meanwhile the Government has said that three major projects under the Integrated Resort Scheme (IRS), at Beau Champ, Medine and Le Morne, are about to get the go-ahead. The IRS seeks to grant incentives, tax and otherwise, to wealthy individuals to acquire bungalows in special zones. The regulations made by the present government provide that “the object of the Scheme is to attract mainly high net-worth non-citizens into Mauritius by allowing them to acquire luxury villas under the Scheme.” These regulations also require the Scheme to provide “within the boundaries of the integrated resort area, luxury villas of international standing and high-class amenities and facilities including golf course, marina, individual swimming pool, catering, nautical and other sports facilities and health centre.”

The law provides that the extent of land for each villa under the Scheme would not exceed 1.25 arpents and that each property would be sold for a minimum price of $US500,000, inclusive of a fixed registration duty of $US70,000. The requirement for a foreigner purchasing land in Mauritius to obtain prior permission from the Prime Minister under the Non-Citizens (Property Restriction) Act does not apply to acquisition of land under the IRS. Furthermore, The Morcellement Act does not apply to the IRS. The Immigration Act has also been amended to provide that any foreigner wealthy enough to acquire a villa in an IRS area will be granted the status of resident in Mauritius for himself, his spouse and other dependants.

The text of the FSC's two proposed questionnaires is available in the Tax-News Resources Section

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