Acquiring a Guest-House in Mauritius

When thinking about moving to Mauritius, the first problem to solve is how to sustain oneself in the country. A fair number have dreamed of establishing a guest-house or boutique hotel. Up to now, there has been no guidance as to how a foreigner may set up a business like this.

The Board of Investment (BOI) recently published guidelines to assist foreign investors wishing to establish a guest-house. Please note that these are guidelines, not rules, and should be addressed in the spirit they are intended.

Here they are:

There are two types of investment that would qualify: Building a new guest-house or renovating an existing building to be a guest house. I will treat them separately:

New Guest-House

Must have at least 12 rooms. Rooms are not defined, but using the descriptions used in hotels, I would suggest that they mean 12 bedrooms.

The investment must be at least R2m per room.

The standards should be aimed towards the luxury end of the spectrum. No Back-Packer’s please.

The buildings should be eco-friendly.

The BOI will take the project proposal to the Tourist Authority for approval before reverting to the applicant. It is therefore important to make sure that the project adheres to the Tourist Authority requirements such as 24 hour security, cameras, safes, fire extinguishers etc.

Line of least resistance: Getting hold of leasehold property (beach front property) is difficult for a foreigner. It would be worth considering teaming up with a Mauritian partner, where the partner contributes the land and the foreigner contributes the buildings, for example. This is my view, not part of the guidelines.

Renovated Guest-House

The BOI will consider applications to invest in existing guest-houses only if they are to be renovated at a minimum cost of Rs500 000 per room ($17 000).

All other guidelines apply as above.

Competence in Managing A Guest-House

The investor must demonstrate that they have the competence to manage the guest house, or employ a competent person or company.

A non-citizen will only be permitted to manage the guest house if they are tied up in the investment at either the Rs 2m level per room for new developments, or Rs 500 000 per room for renovated guest-houses.

They must demonstrate their foreign track record in this industry.

A reasonable number of local employees should be employed.

*******

So here we see that the BOI has set some clear minimum standards, but that the detail is pretty vague. This is a good thing as every project should be evaluated on its merits.

I have to assume that any foreigner wishing to purchase or lease land with or without improvements is part of the deal. If this is the case, this establishes an exciting route for the right person to add something new to the Mauritius Tourism Industry.

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