Living in Mauritius, changes to residency permit schemes

In its quest of making Mauritius a destination of excellence, the government has brought changes to its already attractive residency permit schemes. The strategy of opening the doors of the island, in a selective way, has proven to be effective in bringing foreign direct investment and expertise to the country.  We all know that the country is constantly moving forward, always on the lookout to improve and plans to be a high-income earning nation in the future. Attracting foreign capital and expertise is part and parcel of an overall strategy to boost the island’s economy and uplift quality of life of its citizens.

The Board of Investment operates different categories under the Occupation Permit scheme; Investor, Self-Employed and Professional. There’s also a Residency Permit scheme for Retired Non-Citizens (aged 50 or more) who want to live peacefully under the sun. At first glance, the conditions leading to these permits, and their renewals, have been further relaxed – and therefore we expect to attract even more foreigners on the island.

What are the changes?

We provide you, in a concise format, the changes that have been brought to the existing residency schemes.

The Occupation Permit/ Residence Permit is granted for a maximum period of three years, renewable thereafter subject to established criteria.

A non-citizen can apply for an OP/RP under any of the following 4 categories:

Investor:

  1. Initial transfer of USD 100,000 and the business activity should generate an annual turnover of at least MUR 2 million for the first year and cumulative turnover of at least MUR 10 million for the subsequent two years.
  2. Existing investor with a net asset value of at least USD 100,000 and a cumulative turnover of MUR 12 million during the preceding 3 years with a turnover of at least MUR 2 million in any one year.
  3. Individual who has inherited a business in case of death or incapacity of the previous investor provided that the net asset value of the business is at least USD 100,000 and a cumulative turnover of MUR 12 million with a turnover of at least MUR 2 million in any one year.
  4. An Investor wishing to bring in high-tech machinery and equipment as part of the investment of USD 100,000, must transfer a minimum of USD 25,000 and the remaining balance in terms of high-tech machinery and equipment.
  5. Investors conducting Research and Development (R&D) in highly innovative sectors can apply for an Innovator Occupation Permit. The R&D expense component should constitute of at least 20% of total operational expenditure during the research phase.  Applicants eligible to apply under this scheme will be required to make an initial investment of USD 40,000.

Professional: Basic salary should exceed MUR 60,000 monthly. However, the basic salary for professionals in the ICT Sector should exceed MUR 30, 000 monthly.

Self-Employed: Income from the business activity should exceed MUR 600,000 annually for the first two years of activity with an initial investment of USD 35,000.

The annual income has been increased from MUR 600,000 to MUR 1,200,000 as from the third year of activity.

Retired Non-Citizen: The Retired Non-Citizen must undertake to transfer to his/her local bank account in Mauritius an initial transfer of at least USD 2,500. Thereafter, the Retired Non-Citizen should transfer at least USD 2,500 monthly or a sum by instalments amounting to at least USD 30,000 annually.

Dependents of Occupation/ Residence Permit holders, namely spouse, children up to the age of 24 and common-law partner, are also eligible to apply for a residence permit in Mauritius.

How can we help?

We have been providing business creation, management and immigration services to hundreds of people and businesses over the years. Immigration is a core service that is based on one philosophy: ensure the best physical, legal and moral disposition during a relocation project.

At the heart of our concern is the peace of mind of our client and his family.

Our services are not limited to paperwork. Find out more, contact us !

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Posted in Business, Business Facilitation Act, Immigration, Investment, Mauritius, Occupation Permit, Residence Permit, Residency, Retired Permit, Uncategorized | Leave a comment

How to open a restaurant in Mauritius

 

image2As a world-class tourist destination, Mauritius is inevitably an appropriate place to host a restaurant. Without doubt, this is one of the favourite businesses among foreign investors. French, Italian, Indian – you find it all on the island. The cuisine of a country is a reflexion of its culture, it is said.

 

As Mauritius is a blend of cultures from different regions of the world, so is its cuisine. Over the years, the island has developed its own scents and flavours, but all are inspired from other parts of the world; Africa, India, Europe, etc. But this is not the subject of our article. And neither am I going to replace Gordon Ramsey. Let’s rather see how we go about setting-up a restaurant in paradise-island. This post is more to help those who want to invest in Mauritius find some preliminary information on the steps required to open a restaurant on the island.

US-Campaign

The first thing to understand is ‘authorization’, i.e. license. If a restaurant has more than 40 seats, it is classified as a Tourism Enterprise, wherever it is situated. On the beachfront, deep inland, anywhere, it is classified as Tourism Enterprise. Hence, an application has to be made for a Tourism Enterprise License (TEL) to the Tourism Authority (TA). Below 40 seats, the restaurant has to apply for license from the Municipality of the town where it is situated, or from the District Council if in a village / rural area. Foreigners can only aspire to an investor permit if they invest in 40+ restaurants. The Board of Investment (BOI) does not recommend any Occupation Permit unless a Tourism Enterprise License is present.  In fact, the other condition for Occupation Permit is the minimum investment of USD100,000. With such an amount, one will obviously look at 40 seats or more.

The location, a key element

The physical location is crucial. If you are planning to open a restaurant, you should first ensure that the building / space has all the required authorization; construction or development permit or Building & Land Use Permit (BLP). The BLP confirms that the building is legally authorized, has been constructed according to approved plan and can be utilized as a commercial space (not necessarily as a restaurant in first instance). Once you have this assurance, you can move forward to signing your rental agreement with the landlord. I always advise to have a conditional clause therein where, if the Tourism Enterprise License application is not approved, the tenant can withdraw from the rental obligation without much damage.

Note that I refer to rental and not ownership. Foreigners cannot purchase immoveable property, unless under certain circumstances. This is governed under the Non-Citizens (Property Restrictions) Act.

The location also need to cater for adequate parking space. According to Tourism Authority guidelines, one parking space for every 8 meter square the restaurant has, as surface area.

 

Legal structure

Fortunately, Mauritius is a very simple business jurisdiction. For any business, commercial or professional activity, one would normally choose a domestic company as legal structure. This also applies to restaurant business; in fact, it is almost compulsory to have the restaurant registered under a company. First, because no investor can apply for Occupation Permit without a company and second because for Tourism Enterprise License purposes, a company is mandatory.  The Tourism Authority or the Board of Investment will not even entertain applications if not done through a properly registered domestic company.

 

Applying for the TEL

Application for TEL is made to the TA, through a precise set of documents. This includes, inter alia:

  1. Business Plan
  2. Company document (legal structure)
  3. Identity documents of directors and shareholders
  4. Site Plan
  5. Rental agreement
  6. Clearances from the Ministry of Health, Fire Services and the Police

An application is not considered as ‘complete’ unless all of the above are in the file. In the normal process, the application will be sent without clearances from the health department, fire services and police. These will be contacted by the Tourism Authority and will undertake their respective inspections once the Tourism Authority has received an application and contacted them. A report from each of the above bodies will be sent to Tourism Authority once inspection is effected. It is quite helpful for the applicant to stay in touch with all of them and to ensure that they communication are effectively despatched without delay. As consultants, we have initiate a good relationship with all those concerned and how well we know that without intervention in this ‘semi-internal’ communication process, the delays would be unbearable.

At this stage, the investor is not advised to start building or renovation works for his restaurant. The application for Tourism Enterprise License is based on a plan and concept, at the time of application. The Tourism Authority will issue a Letter of Intent, stating that it is favourable to such concept / plan and from there one can start spending the capital in the actual set-up. It has happened, in the past, that investors already spent huge amount in the set-up while waiting the outcome of their Tourism Enterprise License application. The license was not approved and investments lost. The Tourism Authority has reacted promptly and now issues a Letter of Intent. The base is approved but subject to certain conditions ; for example on the conditions that necessary clearances (health, fire, police, etc) are obtained. With a Letter of Intent in hand, the promoter can start building – while respecting applicable health & safety norms.

Once all is done and verified by the competent body, reports are sent to the Tourism Authority and the license is issued.

 

Other licenses

Depending on the concept and the promoter’s vision, a restaurant might also require additional licenses. For instance, a restaurant require a special license to sell alcoholic drinks. This license can be applied for to the Mauritius Revenue Authority (MRA). Again obtaining this license depends on other factors (again the health, fire and police clearance). No liquor license is issued until the TEL is obtained. The applicant also needs to have legal notices published in the press and the Government Gazette.

Halal certification is another element that requires due attention. Mauritius has an important Muslim population. As such halal certification is considered to be an advantage. Of course, if one is planning to sell alcohol, then halal is of no importance. Halal certification is issued by the Jummah Mosque or the Jamiat Ul Ulamah, two recognised authorities in the halal area. Halal is a certification that provides additional comfort to several sensible areas of a restaurant business, for example: meat quality, general food handling and manipulation, hygiene, cross-contamination, etc. With a halal certificate, a restaurant provides added guarantee, not only to the Muslim population but to people of other faiths also. Not surprising that in Mauritius, many prefer halal restaurants (despite not being Muslim).

We have provided you with a brief idea on what to prepare and what to expect when planning to open a restaurant in Mauritius. We cannot list all other underlying procedures and it wouldn’t be a brief and pleasant reading, despite being useful.

At Gibson & Hills we provide you with a complete set of solutions for the setting-up and management of restaurants in Mauritius.

We also help in establishing your operational bases and handle issues such as staffing, accounting set-up, stock and other control points & systems, Point of sale management and others. We have provided our services to several restaurants on the island, including those with international franchises. If you plan to venture in this business line, have a word with our team before placing your bets.

http://www.gibsonandhills.com

(c) May 2017

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Mauritius employment laws & regulations, the contract of employment

Given the success of our article (back in 2015), we thought necessary to come up with more information on employment relations in Mauritius. This article may hopefully give everyone an insight into the content of a usual contract of employment.

Future employers, I believe, would get some clear indications. Also, among our readers, are hundreds of foreigners who are considering possibilities to invest or work in Mauritius. They are likely to fall at eitherside of table; employer or employee.

Preface
The key element to any employment, is the agreement between the employer and the employee. This is defined through an employment contract where all the terms and conditions are agreed and signed by both parties. I often get questions from both sides asking explanations on certain conditions and clauses mentioned on the contract. The first curious thing to note is that (maybe in desperation) some people sign documents and engage themselves without giving due attention to the content of the agreement. An employment contract is first and foremost a legal agreement binding two parties; the employer & the employee.

It is therefore the duty of the future employee to read and understand the contents before signing. This should not be a chance-taking formality which is done when in need and which is discarded when no longer useful or interesting. The employer, obviously, is more familiar with the document as he normally would use the same format and conditions frequently. The onus of reading and understanding rests more on the employee. I list below some of the points that need special attention on an employment contract.

The base laws
Employment laws in Mauritius are defined as the Employments Rights Act. The Act lays the basics of employment laws of the country and covers almost every right of the employee and the employer. The Law is quite elaborate and provide precise and detailed information on applicable rules, obligations and right of both parties: the employer and the employee.

There are other rules and regulations, compiled under Remuneration Orders, to further complement and enforce, with precision, certain additional conditions based on the industry / activity sector of the employer. For instance, a watchman’s conditions of work may not totally be contained under the Employments Rights Act, which is rather a global set of base rules that govern employment conditions. A watchman will be required to work longer hours and generally has a different working environment compared to an office secretary. The Remuneration Orders take care of these specifities.

There are 30 Remuneration Orders covering specific industries. Those not falling under such orders are governed by the Employments Rights Act. Under this article, we are not addressing specifically the applicable rules, but rather the departure point of an employment relation: the contract of employment.

The parties
Parties are the persons / entity signing the contract. In an employment contract, there would be two parties: the Employer & the Employee. The parties should be clearly identified and defined on the contract. For instance the name of the employer (generally a corporate body) should be clearly written, as well as its legal domicile and the person representing it for the purpose of this contract and authorized to sign on its behalf. The employee’s name, address, ID card / Passport number should be mentioned.

Commencement and duration
Clear indication should be given on the start date of the contractual obligations (when the employment effectively begins) and the duration of the contract. If there is no defined duration, the contract should state so.

Termination
Similary there would be a clause governing termination. This covers notices for termination (resignation, for instance) : method to communicate notice, period of notice, etc. I’ve received many questions from employees who attempt at giving short notices, despite being fully aware of their contractual obligations. Again, when sigining a contract, every party is binding himself to certain conditions. It is totally dishonest to even attempt to escape an obligation which was signed in full consent and knowledge. This is often the case when an employee has a new job opening. Often the new employer is not willing to respect the notice period binding the new employee with his previous employer. In other words, the pressure is (finally) generated by another employer in an attempt to avail itself of the expertise without losing time. In so doing, he violates the right of another employer.

Not respecting a clause may lead to sanctions such as financial claims; particularly if there is a bond signed by both parties, or also when the early departure of the employee causes prejudice to the employer’s business.

Job Title, duties & responsibilities
This is an essential point. The very basis of a contract of employment is ‘Employment’ and the ultimate definition of ‘employment’ is the job title. This shall leave no room for ambiguity, misinterpretation and doubt. The post should be clearly defined on the document.

In many cases, the defining the post (usually in one or two words) does not readily define the duties and responsibilities assigned to the employee. Hence, it is very common to see, even in broad lines, a list of such duties and responsibilities defined in the contract. Such a list allows the employee to understand his area of intervention, generally his lower and upper limits under the contract.

The list of duties & responsibilities cannot be included in an exhaustive manner in the contract. It highlights the main areas of intervention and it generally ended with the clause stating ‘any duties or responsibilities that are generally assigned to such post’.

Probation period
Neither the employer nor the employee, at the time of signature of a contract, are able to fully appraise the reality of the employment. At the signature stage, there is only a theoretical appraisal of each other’s ability; the employee’s ability to fulfill his obligations and the employer’s ability to offer a position that suits the employee.

The probation period offers a ‘round of observation’ to both parties – offering each party the ability to fully appraise the day-to-day reality of the employment and whether it satisfies their needs. Usually this period is defined under the contract and can stretch for a period between 1 to 3 months. In case the employer is not fully satisfied with the employee’s (under probation) performance, the probation period can further be extended, during which corrective measures and adjustments are carried out.

The employer normally reserves the right not to proceed with the confirmation of the contract if the probation period is not successful. All conditions of the probation period should be mentionned in the employment contract.

Place & Hours of work
Where an employer has a fixed location and hours of work, it is quite usual to see these mentioned straight away in the contract. In other cases, these may be described in general (or broad terms) but still should not leave any space for ambiguity. Any such broad clause should be written in such a way that all parties have a clear understanding of the conditions. Leaving slight confusion or space for misinterpretation eventually leads to dispute.

In the event that an employer has different sites and that the employee may be moved from one site to another, the employer has the reponsibility to state such facts on his contract. The employee should, at all time, be aware of geographic mutation and, where possible the conditions (notices, procedures, etc.) that leads to such transfer. Again, giving as much precision on the contract reduces the occurence of dispute. Of course, such information can only be written if known at the time of signature of the contract.

Remuneration & other benefits
One of the most obvious and essential clauses on a contract ! Nobody offers a contract where the remuneration is not mentioned in a clear and absolute manner – and nobody obviously accept such contract. Quite surprisingly I have seen a couple of contracts where the remuneration section seem to have written in a deliberatly confusion way. This should be avoided at any cost.

In this clause, all other payments (including allowances, benefits in kind, payments, overtime, bonuses, etc) should also be mentionned. In cases where there are complex allowance / bonus payment systems, the system should be clearly defined in this clause. Again, the idea is to remove every doubful and confusing elements.

Before signing a contract, one can check the different legislations available to verify whether the salary / benefits offered are in line with the laws. For instance, it is always advisable to check remuneration orders, where such orders are applicable.

Leaves
Leaves are governed under labour laws and remuneration orders. However, in many instances, contract of employment do repeat the conditions. It lines up with the general idea of removing confusion and space for misinterpretation. It’s quite funny to see how many employers make it a must to repeat this part in their contract, despite it being clearly written in the laws. If such effort was also made in other parts of the contract, many disputes would have been avoided.

Others
There are other clauses and conditions that can be mentionned in a contract of employment. Depending on the specificities of the job or the business of the employer (for exmplae), both parties may agree to sign additional conditions. These, in any case, should not depart from the Employment Rights Act or Remuneration Orders. They are included in a contract to address additional elements. After all, a contract is an agreement between two parties.

Other elements that may be covered under a contract of employment are, for example:

Use of company assets
Dealingwith intellectual property
Confidentiality clause
Competition conditions

The list is not exhaustive and may include many other elements that the employer may deem necessary to ‘protect’ his business. Again, no departure from the Law is allowed as, at the base, such condition would render the contract illegal and therefore not defendable in a Court of Law.

Our HR services
Gibson & Hills Group offers, through its su
bsidiary Talent Lab Ltd, a full range of HR services designed to enhance the HRM (Human Resources Management) in general. This includes

  • Design of the general HR policy & strategy
  • HR audit
  • HR engineering & re-engineering
  • HR finance & overheads management
  • Payroll administration
  • Tax and social charges administration
  • Legal documentation: contracts, promotions, dismissals, etc.
  • Disciplinary committees
  • Motivation and incentives
  • Training and team buildling

The above list is just an indication, we do provide a 100% one-stop-shop service to businesses and employers in general

As a licensed recruitment agency, we are also able to help organisation match their HR needs. Our recruitment services includes:

  • Definition of the post and its attributions
  • Formulation of research strategy
  • Screening of candidates and shortlisting
  • First interview & interview hosting
  • Contract drafting and signature.

I do hope that this first article in the series has given you sufficient first-hand information on what to expect in a contract of employment. We will be coming soon with other articles in the same line. Until then, if readers require any information, they are free to contact us.

(c) http://www.gibsonandhills.com

Posted in Business, Economics, Employment, Immigration, Law, Mauritius, Tax | Tagged , , , , , , , , , , , , , , , | Leave a comment

Invest, work & retire in Mauritius

Happy New year to all readers.  Here we are, with our first 2017 article.

Lots have been going under the sun, in Mauritius. But the island is, fortunately, still maintaining its strategy to attract foreign investment and expertise.

We will try to have a quick look on the different residency permits schemes that are available in Mauritius and update you on new rules and regulations.  Yes, some slight changes have been brought to Occupation permit schemes without, however, affecting the core program. Before going into details, let us have a look at the different categories of permits available for who want to invest, work or retire in Mauritius.

Occupation Permit categories & their criteria

Investor Permit: an investor is a shareholder and director in a company registered and domiciled in Mauritius. The shareholder is required to show a minimum investment of USD100,000 & the company should be able to generate an annual turnover of at least MUR2 million for the 1st year & cumulative turnover of at least MUR10 million for subsequent two years.

Professional : a foreigner working in a Mauritian company to deliver professional services. He should earn a basic salary exceeding MUR60,000 per month. However the basic salary for professionals in the ICT sector should exceed MUR30,000 a month.

Self-Employed: a self-employed person is a foreign engaged in a professional activity; working exclusively for his own account. The applicant should be able to show a minimum investment of USD35,000 and his activity should generat an annual income of MUR600,000 in the first 2 years and thereafter MUR1.2 million .

Retired Non-Citizensa foreigner, aged over 50 years and able to transfer at least USD40,000 per year to cater for his own expenses or USD120,000 at the time of application. 

exclamNotice the slight changes in turnover criteria for Investors and Self-Employed. Globally the performance requirements are the same, though. Eg: the Investor was previously required to generate a turnover of MUR4 million a year, for three years. This equals to the global condition of MUR12 million for the first three years. Similar principle applies to Self-Employed category.

How to apply ?  The changes brought to procedures

There were certain incoherence in the previous application procedures and we did highlight them from the very start.  Previously, an investor would be required to incur certain costs even before having a minimum comfort on his permit outcome. For instance, he would have needed to create his company, open the bank account, transfer his investment and travel down to Mauritius to submit his application.  Even while so doing, he had no guarantee that his Occupation Permit would be approved. The same inconveniences would apply to other categories: Professional, Self-Employed  & Retired non-citizens.

A new option is now available. Applicants may choose to apply for an Approval in Principle. prior to travelling down to Mauritius and incurring any expenses. Once the approval is obtained, the applicant has 90 days to register his business in Mauritius, transfer the funds, undertake his medical tests  and submit his applicatioproeduren to the Board of Investment.

Now, the challenge lies in completing all these (including travelling) in 90 days. For instance, to open a bank account, every business requires a Trade License, issued by the local authority where the business is situated. This in itself can take weeks to achieve, despite government’s affirmed willingness to shorten the delay (this is an acknowledgement that the delay is long).

There are several other ‘logistics’ constraints that needs to be taken care of. If the investor has children, for example, he has to cater for school admission.  90 days, honestly, can vanish like a burnt matchstick. Still, the change in application procedure is a positive sign.

visaservicesTo be able to optimise on success possibilities, it is always available to hire the services of a professional.

There is obviously an additional cost to hiring a professional, but it provides an additional comfort (and a sort of guarantee) to have the intervention of someone who masters local laws and regulations.

A professional has built a network of trust (if he is good) with officers at various levels.

 

This facilitates many things, like ensuring efficient and quick communications or enhance collaboration for the success of the application.

A professional will also be able to guide you through the ‘DoS’ and ‘Donts’, eliminate possible obstacles & bugs on the application file.

We have been assisting those who want to invest, work and retire in Mauritius for the past decades. We have travelled through various laws and changes througout time. Our track record : +20 years of experience, +100s of projects realised and +1000s of smiles earned

Unlock the doors of Mauritius, paradise-island. 

(c) http://www.gibsonandhills.com 

 

 

 

 

 

 

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Mauritius employment laws & regulations, 2016-2017

Hello readers

We published an article on employment law back in 2012. The success, you made out of it, was unexpected. Over 58,000 views & over 550 questions/comments.

We realised how important the employments laws of Mauritius are important to our readers and we are glad we were able to provide you all with contents you accepted as useful. We cannot but thank you!

For all those we happened to help someway or another in getting out of distress, we again say thank you for trusting us.

 

We will be publishing an updated version early next year and hope to be as useful to you as we have been so far.

We wish you a Very Happy New year 2017 – health, wealth and happiness to all.

happy-new-year-sms-2015

 

 

 

 

 

Signing-off for 2016

Nadeem

http://www.gibsonandhills.com

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Why do you need a consultant to invest, work or live in Mauritius?

Any foreigner who wishes to work, live or stay in Mauritius requires assistance from an expert.  Taking my own example, I would never take the risk of moving my family to a foreign land without consulting with experts. True : to find a genuine and competent expert is another issue. In every sector, there are ugly ducklings that tarnish the image of the profession. The Board of Investment (BOI) mentions on its website, in bold and in red, ‘beware of people posing as Consultants’. This statement may be misleading and might discourage foreigners from contracting the services of consultants. It might simply be interpreted that consultants are just crooks, all of them.

BOI (and government bodies) needs to understand that consultants are not people from a different team and they are not competitors. Consultants, the genuine and competent ones, work in the interest of the island. We promote Mauritius as a business or life destination. As opposed to government bodies, we invest our own funds, not public money. It should also be clear to every government servant that one of the main objectives of attracting foreign investors is the creation of wealth; this wealth is not limited to beautifying data tables, percentages and statistics. The population should benefit – new businesses and job creation should grow in proportion to the flux of foreign investors (I don’t know why I don’t like the word Immigrant). Our local professionals should be able to tap-in this market, and this, also means work and fees for our accountants, consultants, lawyers, service providers, property owners, and so on.

For me, the definition of ‘boosting the economy’ is : to improve the quality of life of people. It corresponds to the Government’s affirmed ambition of turning the country into a high income earning econmy. No?

consulting-consultant

It is true that many posed as consultants in the past. They found themselves this new profession when the Business Facilitation Act was introduced. Easy form filling procedures in return for heavy fees paid in Euros & Dollars. These are not consultants, only opportunists – at worse, crooks.

It is time now that authorities identify and recognize the real professionals. I can understand the position of the BOI, but only to some extent. The biggest fraud, with regards to permits occurred in the womb of the BOI itself. Its own staff members, in the past, have been found guilty of fraudulent maneuvers (fake permits, fake bank documents, etc.). The big scandal required some cleansing operation, internal to the BOI. I’m glad to see that things are very healthy these days, and in every specific service: application procedures, counseling, expertise, attitude, you name it. The officers seem more competent and understand the process, but more importantly, they understand the fact that the risk lies in the hands of the investor.

Coming back to ‘people posing as consultants’, the statement is not very clear to me.  I pay regular visits to the BOI, minimum twice a week, every week. I happen to observe, quite frequently, ‘suspicious’ people still roaming around. Some seem to enjoy privileged access to the officers and the facilities. I wonder how people having a full time paid job (in sectors having nothing to do with the BOI) can still bring in ‘clients’ and assist in application procedures. Seasonal consultants?

The ‘posing as consultants’ phenomena does not affect only Mauritians. Many foreigners have found nothing better than to open their ‘consultancy office’ on the island. Not only many of them lack expertise but they are actually posing as unfair competitors to local experts. A real international consultant will not leave a much larger market (Europe, for instance) and start an accounting / book-keeping business in the tiny Mauritius. Foreigners posing as consultants lack the expertise that Mauritian born and bred consultants have: knowledge of island life, culture, common practices, knowledge of law and rules, the list can be long. Taking my own example, my over 23 years of experience comes into play in any relocation advice I give to people moving to Mauritius. I know the do’s and don’ts and this was not written in my books, not taught in school – this was learnt on the ground.

I’m curious to know why there are no restrictive schemes to protect local expertise here, similar to what is operated in the tourism industry, for example. We have thousands of graduates on the circuit every six months adding to thousands of Mauritians qualified in the consultancy related areas (accountants, finance managers, engineers, etc.). They need to fight an unfair competition from foreign pseudo-consultants. Unfair is the word.

These professions should be restricted to Mauritians, unless foreigners have hyper-innovative proposals that can enhance the industry. 

I’m planning to raise the question soon in a formal way to the BOI in view of understanding their position on the word ‘consultants’ in general and more particularly foreigners operating in this field. It would be an interesting subject.

So why do we really need a consultant?  Officers of the BOI have done tremendous effort to stay in touch with investors, trying to help them invest in the industry sector they choose. Despite this effort, these officers will never be able to replace genuine consultants, because of the expertise and on-the-ground experience the latter has. A government officer sits behind a desk and can be excellent, but only in procedures and paperwork, at best. Generally, taking the example of the BOI, government bodies play an important role in the ‘setting-up’ phase. They do not come into play in the real-life situation of the business.

consultant-knowledge

The consultant’s expertise goes far beyond the ‘setting-up’ phase; his advice is based on the promoter’s constraints, objectives (short, medium or long) and he has a wider perspective on business in general. The consultant is himself an entrepreneur if he is running his own firm. A government officer does not understand the basic principle of risk because his salary is assured and guaranteed. On the other hand, the consultant relies on his reputation & business acumen to succeed, financially or otherwise, in his venture. He invests his own funds and has a higher need of return on investment. Yes, we are referring to different mindsets and you can guess which one matches the investor’s.

Let’s have a look at a concrete example: human resources. No officer can understand the motivation factor of a job-seeker. Extend this further; the officer has no idea of the day-to-day constraints of a particular job and the average rate of pay in a particular sector. There are several things that the officer has no clue of, for instance: cultural clash between Mauritian employees & foreign employers, financial motivation, geographical spread of competencies and the list goes on and on.

bs-exMy company manages around 400 staff members, we work with them everyday, understand their problems, solve their issues – we interview them for recruitment purposes. We definitely have a better insight on the overall job market. We tackle every of the issues that arise: conflicts, behavior, performance, discipline, technical, legal, fiscal, etc. All this is done through observation of local laws and rules. A government servant sitting most of the time behind his desk will, in no way, gather such intelligence and experience. His advice on employment can only be twisted to either suit the investor’s wishes or discourage him – again he might excel in interpreting statistics and data. Reality cannot be translated when not known. A consultant will, on the other side, expose real-life experience, which is not usually described in percentages or figures.

Human resources is only one aspect of business, you can take any other aspect and apply the same principle of thought.

In a government office, to get precise advice in every aspect of business, you will need to address your worries to different officers. At the end of the day, you will find yourself talking to a crowd and will need to find your way through to the relevant expert for each specific issue you have. Still, the expert dealing with you has probably never done business and hasn’t taken any business risk in his life. The consultant may also display a team of experts but as opposed to a public institution, he is and remains accountable to you as client. He is normally your single point of contact.

accountability

Accountability is key. The consultant is accountable to you because he earns fees from you. He has a duty of care and attention which extends to moral & ethical responsibility. A government servant is not accountable to you. In case of wrong advice, he is still earning his salary at the end of the month and he is not answerable to you.  He has no concerns whatsoever for his reputation, it is not part of his equation. He should not be blamed for it; this is how the system works.

Without discrediting government servants, I need to mention that they are very much useful and essential at all levels. However, they should understand that consultants complement the overall process of attracting and helping foreign investors’ migration to Mauritius.  One cannot perform well without the other. In this regards, not only the BOI but all other public institutions have to understand that private operators are part of the same team.

Private and public sector cooperation is not only required for real estate development project, for instance, but should also take place in the service sector. Foreign investment is essential to the development of Mauritius into a modern island.

If a foreigner wants to work or live in Mauritius, he requires confirmed expertise and mostly an accountable person to take care of his affairs and that of his family.  Relocation does not start or ends with papers issued by government service; relocation is a real-life process which requires support from people who are on the ground; people like us, carrying decades of experience; people who were in the profession even before the Board of Investment was created. People who are accountable.

The idea of this article is not to confront civil servants in a challenge of competence or expertise. When an official government site displays, in bold and in red, information that can cause prejudice to private operators, there is a need to clear the misunderstanding. A consultant is also an investor, and in my opinion, there’s no use attracting foreign investors if locals are struggling to find a way. A consultant’s success also implies expansion of his business, job creation, wealth creation, tax payment and upgrade of expertise, among others.

The baseline is simple: both sides are working for the same goal; promote Mauritius as a world-class business and retirement destination.

http://www.gibsonandhills.com

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Business, investment opportunity in Mauritius

business-ideForeigners who want to invest in Mauritius often apprehend the difficulties lying ahead.  Business creation is not really a simple point to point process. It involves different steps; finding the right location, the right team, stock acquisition, equipment, logistics, the legal structure and of course the residency permits.

 

Above all the uncertainties lies a big one: will this work? will eat earn money to finance a new life, in an unknown land?

We have decades of experience in helping foreigners settling down in Mauritius, either for business, work or retirement reasons. We know and can feel the worries that surrounds a business relocation project.

We have an excellent opportunity for people who would want to settle-down to Mauritius but who would want to avoid all the above worries. A project with a very interesting earning potential and yet not human, capital or equipment intensive. The initial investment required and the revenue generation potential fit the conditions imposed by the Board of Investment. Here are some highlights:

  • Project is expected to reap high acclaim & potential award winner
  • Appeals to a niche market, with guaranteed customers
  • High income potential
  • Innovative, a premier on the island
  • Low maintenance enterprise
  • High growth potential. Both the offering and the market are expandable.

To show our confidence it the project’s success, we are offering to any investor, the following :

  • 3 month free office space with internet connectivity
  • All procedures relating to residency permits (whole family)
  • Transfer of up to 100% ownership including intellectual property
  • 100% support for the launch & initial development

If you want to know more, drop us an email or use our contact page.

http://www.gibsonandhills.com

 

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Mauritius, will the Tiger wake-up?

tigerThe long-awaited annual budget presentation has finally revealed its secrets. Many were waiting the finance minister’s to stumble but he didn’t, fortunately. I do not have any political preferences but I need to say that Pravind Jugnauth, in my opinion, succeeded rather brilliantly. This has definitely something to do with the competent advisers he has hired. Real grey matter with proven track records. Let me just salute Gerard Sanspeur. The gentleman requires no introduction; he has headed several institutions and brought them to new dimensions, the Board of Investment is a clear example.

Through this budget, Government plans to revamp paradise-island.

I won’t, in this article, provide you with an in-depth analysis. I believe that there are several publications in this line and written by more competent people than me. As usual I’ll contend myself in expressing my opinion on the overall measures announced.

Finding the right mix of social and finance has always been a tricky business. It’s never enough for the social and the finance always moans at any surplus expenses made. The Finance Minister seems, at first glance, to have found the best compromise between the two. His speech has left more positives than negatives; the after-taste is not so bad, at least for now.  I personally have never heard the Opposition Leader expressing satisfaction on a Finance Minister’s budget exercise, but this time it happened. The different measures announced were coherent with the overall strategy of the budget, confirming that this exercise benefit from the contributions of a certain expertise. Good!

The governing line of the budget was : Creating a new Era for Development. A sound strategy which lies on a multi-fold approach to an objective; that of improving the lives of Mauritians. A collection of ideas and actions that intend to create a nation of entrepreneurs in an economy based on technology, innovation and export. Of course, such an objective can only be met through implementation of several measures which are directly and indirectly related. It includes, for instance: reducing procedural hassles in business creation, improvement to infrastructure, access to finance, and so on. I’m happy to note that budget did take into account all those ‘indirect’ elements as opposed to previous ‘big’ ideas with no heads or tails which I’m so used to.

Creating a nation of entrepreneurs is not a simple task. It cannot be done without the appropriate legal framework, infrastructure and proper mindset.  The legal framework, if too cumbersome, acts as a deterrent to any brilliant business idea. Mauritius already offers one of the best legal frameworks for business setting-up and management; all streamlined into simple procedures and no heavy regulations. By proposing to further enhance the ease of doing business, the Minister has shown sensible reasoning. Concrete measures which are designed to further help SMEs breathe. This includes elimination of all Trade Licenses for those paying Rs5,000 or less, and this for the next 3 year, financing from banks or institutions at high preferential rates, easier access to finance, and tax holiday ranging from 4 to 8 years.  Licensing procedures will know major changes with a view to allow quick business creations.  New: Government will now enforce ‘process time limits’ to regulatory bodies.

Foreigners investing in Mauritius are not neglected. Those who want to set-up their business and invest in Mauritius are welcomed. Residence permit procedures will also know some positive changes, with new (and realistic) conditions.  The investor will no longer be required to register his company prior to apply for an Investor occupation permit. He can obtain an ‘agreement in principle’ or some kind of letter of intent from the authorities before moving to register his company and proceed with investment.

Real estate sector is also called to some changes.  Foreigners who want to acquire immovable property in Mauritius for business purposes will be able to do so without much hassle. Companies where foreign shareholding is less than 25% can buy directly, without formal authorization from the Prime Minister’s Office. All these cannot but inject dynamism in the economy.

 

The ICT sector will also be taken care of.  Government plans to invest massively in the uplifting of current infrastructure, precisely connectivity.  Optical fiber will be a reality around the island. E-commerce, which has not known a real take-off, will be addressed. The Government will lead by example, in offering around 50 e-services to the population. Connectivity and infrastructure are two essential elements and I’m glad to know that our leaders understand this.  Our young and ‘to-be’ nerds are encouraged to launch themselves into the coding and mobile apps development sector. Time to unveil those talents.  Digital age will really take a visible shape if all these are truly implemented.

Overall, the budget announces a new era. It allows for development of a digital culture, provides encouragement to young talents in the ICT sector and implements a coherent (and realizable) strategy to make Mauritius a real cyber island. Beyond that, the island is expected to sustain its status as a world class destination, for its people and for foreigners who choose it as business or retirement destination. The budget is definitely an interesting one; in substance but it’s interesting also to see how many of these plans will actually be implemented and when.

I can only hope that this is not simply a set of announcements.

The Tiger of Indian Ocean can finally wake up and take control of its destiny.

http://www.gibsonandhills.com

 

 

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Smart Cities in Mauritius, the trap?

Smart CityI often think about the excessive importance given to the real estate industry of Mauritius. Ever since the introduction of schemes to attract foreign expertise and capital, many have thought that foreigners are queuing up to secure a piece of land in Paradise Island.  No, not everyone is in a rush to go to paradise. Sad observation, but true in every sense.

I believe that real estate industry cannot sustain long term strategy with regards to foreign capital and neither can this sustain economic growth on the medium or long term. I was a bit surprised, and I was not the only one, that the new government could not find anything better than to come up with another foreign investment oriented real estate scheme to boost our economy. I’m referring to the Smart City scheme which has recently appeared.

Smart city has a sexy approach, an underlying statement that it shall (finally) help improve the lives of Mauritians. Unlike IRS/RES schemes, the City will be a living space for all of us. It will be ‘Smart’, meaning modern, ecological and sophisticated – everything to please. But still, I’m not convinced.  The way it is, I’m pretty sure that this will end up in the same fashion like IRS/RES villa, unless we bring fundamental changes to the whole country.

Government wants to implement Smart Cities to boost the economy and bring some fresh air to the socio-economic environment. Fine. However, we should be realistic enough to know that these Cities would only fulfill their role on the short or medium term. Once the sites are completed, we will be back to square one, with added burdens; filling the building, giving life to the cities and sustaining their economic functions. These burdens cannot be offloaded until and unless major changes are brought to the island in general.  After construction, there are several equations to be solved; the first one being ‘who will occupy the Smart Cities’?  This equation, in itself, leads to several other questions and issues that need attention.  The mere act of building cities does not sustain any economic ambition, unless we believe we are Ramzan Kadyrov and building fictitious cities is enough to make us happy.

PpowerMauritians, in general, are not waiting any smart cities to have a primary residence.  The problem lies neither in the supply nor in the demand. The problem lies in purchasing power. Besides the elite, no one is really able to afford a new dwelling in today’s circumstances. Had it been the case, all those new apartments & residential complexes would have found their owners and not left unoccupied (or even unattended) by now.  Some, initially nice buildings, are now eyesores. The twin towers of Elypsis are like huge (and sad) ghosts, dressed in white, staring right at you… This is one example. IRS and RES villas are crying in their desperate quest of occupants.  As mentioned earlier, not every foreigner is queuing up to find a place in paradise. All those residential units were tailor-made to welcome foreigners; Mauritians were considered as second-class citizens by promoters. We were not part of the formula, never (it’s useless to even try convincing me on this!).  Besides promoters, even those small sugar-cane land-owners refused to sell their (otherwise worthless) lands to Mauritians, in the greed and wait of Dollars & Euros. We all suddenly believed that the island was a new world real estate Eldorado and people would rush to us with their money. I never believed in this, still don’t and I was right.  All this illusion, based on the value of our real estate, messed up the whole industry.  Overestimation of prices, over-confidence, and exaggerated expectations.

I often argued that the IRS/RES would fail because besides these buildings, the country offered nothing interesting to buyers.  High net worth people require good casinos, nice roads and entertainment. They don’t need houses or ocean views (unless they can show off their yacht to fellow high net worths). Our casinos are probably the only ones in the world to reckon financial loss!  All the luxury villas have price tags that are similar to villas in California. We are in Mauritius, for God Sake!

It all comes to one point: Mauritius need to offer a complete package besides concrete walls if the country wants to attract capital owners of the world.  A quick glance at our internet connection (speed & price ratio) leaves a very nasty aftertaste, a dark side of the self-proclaimed ‘Cyber Island’.  The cosmetic measures will not work unless we apply a comprehensive strategy. So far this has not been the case.

Similar results can be expected from Smart Cities. At this stage, we only heard that brand new cities (it’s like having a smartphone but no money to
buy subscription or a SIM card) will appear in some places, 5 of them already earmarked (to my knowledge) and in advance state of….paperwork. Five huge sites will definitely create jobs and give a push to some industry sectors, over and above the construction and real estate industry. Honestly, the sweet part will last only as long as construction is in process. What happens to these cities after construction? An easy equation: 25% of the properties will be reserved for Mauritians. How do you expect them to acquire such property when banks are operating a mafia style system where only those sweet to them can get loans and facilities?  No, this is not an exaggeration; broke guys and crooks happen to get huge loans with tiny interest rates and exemption from questions and heavy paperwork. And they are not even acquire a primary residence, the basic needs of a human being. This is fact.  When middle class family request a housing loan, the paperwork and investigation is so bulky that it can frustrate CIA agents. So no, the 25% reserved in smart cities will again to the elite of the country, those having the right names and right contacts.

Now let’s talk about the remaining 75%. Normally this is addressed to foreigners. This puts another question on the table: what these foreigners are expected to do in Mauritius ? All of them will not invest, many will take up employment in an already complex unemployment situation. So here comes frustration, anger and ….looming not too far is xenophobia. Are we just trying to repeat the history of South Africa or Zimbabwe here?  Will our future generation not cry revenge and congratulate itself for violent actions in view of snatching back lands lost to foreigners? No, I’m not a lunatic person. Facts again: our port area will soon be flourishing under petro-Dollars.  Foreign promoters will take over our port region, develop and manage it.  There are plans to acquire state-owned companies which are actually handling these. Second project: our government will soon be relegated to a tenant role, handing the landlords role to, again, petro-Dollar owners. Yes government will leave its historical buildings in Port Louis to rent buildings in the Heritage City to be built by Dubai promoters. I just hope I’m wrong and that my children won’t live in a foreign owned country.

Would it not make better sense if the same enthusiasm is showed in developing special industrial or technological zones to promote entrepreneurs? Would it not sustain productivity and economic growth as compared to building cities with no real economic objectives other than that of boosting the construction sector?

Our youngsters are already in a social coma. Drugs, alcohol, unemployment, violence and lethargy is hitting theme in the face. Add all this to the prevailing frustration caused by the visible sign of wealth demonstrated arrogantly by some foreigners. An example: our newly qualified accountants cannot compete with the increasing number of foreign accountants settling down on the island. These foreigners leave their country, where they apparently could not succeed, to eat the ‘already small’ share of our market. One part of this market is foreign investors creating their businesses on the island. These foreign accountants position themselves in way that no Mauritians get access to foreigners relocating to Mauritius. Some even request in writing ‘Mauritians are not reliable, talk to your fellow citizen’. So how do we see a brilliant future here when we are all aware of the number of students taking chartered accountancy exams every 6 months on the island?

balanceIt all comes down to balance. There should be equilibrium everywhere. There should be a minimum protection and equal playing fields set in all areas. Similar to what is applied in the tourism sector, foreign capital and expertise should be allowed but based on ‘protection’ strategy where the rights and talents of Mauritian professionals are not handicapped. The idea is to introduce a selective immigration process for real business people and eliminate those who think that Mauritius is an unexplored land, filled with incompetent people.  Accountants or lawyers trying to relocate should be subject of heavy investigation as to why they leave larger markets to set base in a tiny island and relegate themselves to a tiny market. They should not be lauded straight away but put to test. This is not discriminatory but will help prevent xenophobia from touching our shores in the future when frustration will give our youngsters a reason to rebel.

With our excess enthusiasm on property development we are just sending the wrong message that Mauritius is beautiful and that anybody can get a share of it with the right amount of money in their pocket. Except words, I can’t see any effort in nurturing the talents of our people. Sustainable development comes from investment in younger generation, in the believing in their abilities and giving them the tools & instruments to contribute towards the success of our country.

So for me Smart City is a trap that will close itself on us in some years. By that time the government will change and those who took the decisions will not be held accountable – but will surely be richer than what they are today.

 I hope, again, that I’m wrong and time will tell a different story.

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