Airfare Madness – Johannesburg to Mauritius.

One thing that I hold dear to my heart is the health of the Mauritian economy.

While we are trying our best to diversify, our main industries are still Sugar and Tourism.  So anything that hurts the tourist industry is hurting the economy.  Hold that thought.

Our foreign direct investment is better this year than last year, thanks to an increase in South African investment into this country.  So any business person coming to Mauritius will possibly add to this increasing pot, and anything that stops this from happening is hurting the economy.  Hold that thought too.

The special price in November for a return economy air ticket from Johannesburg to Mauritius is Rs17 500 or R4 873 which is a fair and reasonable price.  Still holding those thoughts?  Good.

If you want to fly to Mauritius in December this year and return early January 2013, a return economy airfare can set you back Rs57 012 or R15 877.  That’s quite a bit more than the November rate.  In fact, that is a hell of a lot more.  In fact, it is ridiculous!

So anyone who wants to combine a holiday with a bit of business over the festive season, or who wants a holiday that does not involve a hotel package is probably not going to come.

And that is how Air Mauritius continues to be at odds with the Mauritian Economy.

I am too angry to write any more.

Some hours later…

OK, I am still angry but I am more rational.  In order to ensure that this post is as accurate as possible, I have given the dates of the expensive flight, and wish to point out that there are lower and higher prices on other days, but all are nowhere near the special rate for November:

Depart Johannesburg December 15 and return January 7 – Rs 53 212.

Depart Johannesburg December 15 and return January 6 – Rs 80 367 (wow!)

Depart Johannesburg December 18 and return January 5 – Rs30 902 (cheapest for this period)

Current Special to Johannesburg from Mauritius (November) – Rs17 500.

And to keep it in perspective:

Depart Paris December 15 and return January 7 – Rs 68 749 (about 3 times the distance)

Depart Paris December 15 and return January 4 – Rs 80 589 (most expensive)

Depart Paris December 14 and return January 9 – Rs 48 924 (cheapest for this period)

Current Special to Paris from Mauritius return (25 Nov to 27 Dec) – Rs 30 000.

My conclusions:

There is a premium to pay for travel that starts before the festive season and ends after this period. That is to be expected as demand is high, but there is a difference between a premium and extortion.

That the flights from South Africa are subsidising the flights from elsewhere.  Even if one takes into account that longer flights are cheaper per km than shorter flights, I can’t believe that a four hour flight costs nearly the same as a twelve hour flight.

That if Air Mauritius continues to damage the country’s economy, then it is time the country removed the Air Mauritius / SAA duopoly, and allowed competition.

 

 

Peaceful Mauritius

Evening in Grand Bay. Taken from the Beach House.

Mauritius is the 21st most peaceful country in the world.  Iceland is the most peaceful, but I know where I would rather lie on the beach.

This is according to the 2012 Global Peace Index (GPI) produced by the Institute for Economics, Pot Smoking and Peace. I jest. The Institute for Economics and Peace conducts this survey taking into account a range of factors. Download the full report as a PDF here.

This is how Mauritius scored for each factor (1 being good and 5 being naughty). As a frame of reference, I have put our neighbour South Africa’s score alongside. SA was ranked 127th out of the 158 countries surveyed, by the way.

  • Perceived Criminality in Society 2 / SA 4
  • Security Officers and Police 5 (oops) / SA 2
  • Homicides 2 / SA 5
  • Jailed Population 1.5 / SA 2.5
  • Access to Weapons 2 / SA 4
  • Organised Conflict (Internal) 0 / SA 4
  • Violent Demonstations 2 / SA 3
  • Violent Crime 3.5 (oops) / SA 5
  • Political Instability 1.3 / SA 1.5
  • Political Terror 2 / SA 3
  • Weapons Imports 1 / SA 1
  • Terrorist Acts 1 / SA 1
  • Deaths from Conflict (Internal) 1 / SA 1
  • Military Expenditure 1 / SA 1.3
  • Armed Service Personnel 1/ SA 1
  • UN Peacekeeping Funding 1 / SA1
  • Heavy Weapons 1 / SA 1
  • Weapons Exports 1 / SA 1
  • Military Capability 1 / SA 4
  • Displaced People 1 / SA 1
  • Neighbouring Country Relations 1 / SA 2
  • Conflicts Fought 1 / SA 1
  • Deaths from Conflict (External) 1 / SA 1

The Security Officers and Police score was our worst, so I went to see exactly what they were measuring: It turns out the Institute for Economics and Peace were measuring the number of internal security and police officers per 100000 people as reported by the United Nations Office on Drugs and Crime (UNODC).  The higher the number the less peaceful. This is a bit counter intuitive.

Well, my logic is that if the country is so peaceful, why do we need so many police? What we need is a more effective Police Force, one where detectives can have access to databases and other tools via a computer. I discuss this in an earlier post. This might also improve our rating for violent crime.

Anyway, we are the most peaceful country in the whole of the African region, and we are more peaceful than Australia (22nd). New Zealand was ranked 2 after Iceland, but I suspect they were more Sheepful than Peaceful.

Tourism Industry at odds with Air Mauritius

Airbus A340 south of Mauritius with Le Morne on the left.

At the outset, I must point out that I am not an expert on the subject of Airline Efficiency. In my defence, I don’t think such experts exist.

Our favourite airline, Air Mauritius, has announced dramatic changes to its scheduling as well as its equipment. All for the worst, in my opinion.

For the US readers who don’t know where we are, Mauritius is an island surrounded by a lot of sea. Getting here by plane is not the preferred option, it is the only option.

One of the most important industries in Mauritius is Tourism. Our economy, especially the banks, have invested in fancy hotels, resorts, golf courses and shopping centers. There are thousands of trained employees and a support infrastructure that touches every Mauritian in some way. Don’t forget the effects on restaurants, taxis, water sports, market vendors, and secondary effects on banking, the offshore sector, IRS and RES.  Most foreigners who do business in Mauritius, first came here as a tourist or combine their visit with some liesure. In the good days when oil was low and bank balances were high, tourism grew the fastest of all industry sectors, with annual percentage increases in the 20’s.

But oil prices have pumped up the costs of flying.  Inefficient airlines around the globe are coming unstuck.  Newly impoverished tourists are taking cheaper holidays.  Tickets are usually one of the biggest expenses on a holiday.  Another is your bar-bill if you are not in an all inclusive hotel, but that is covered in an earlier post.

Here is the transcript from an imaginary Air Mauritius Management Meeting:

Boss of Finance:  Our income is up this year, but our costs are upper, resulting in our profits being lower.

Boss of Almost Everything:  How low…and is there such a word as upper?

Deputy Boss:  Yes, how lower and what is upper?

Boss of Finance: The profits are missing.

Boss of Almost Everything:  Please explain.

Deputy Boss: Please pass the biscuits.

Boss of Finance: The profits have been replaced by €30 million net income in brackets.

Senior Pilot: Brackets are bad.

Boss of Almost Everything: Oh dear.  What should we do to fix this?

Deputy Boss (chewing): The more we fly the more we lose.  Therefore, we should fly less.

Senior Pilot: But, but but…

Boss of Everything:  OK, let’s do that.

Moving on to cash-flow:

Boss of Finance:  We have no money to pay our debts.

Boss of Almost Everything:  Well sell some stuff and get the money.

Deputy Boss: Exactly.  Sell the aircrafts.  That way we will fly less and have money to pay the extra staffs we need to manage this transition.

Senior Pilot (weeping):  But what about the Tourism Sector?  Less flights means less wallets arriving in our country.

Boss of Almost Everything:  That’s not our problem, let’s go to lunch.

As a result, Air Mauritius is closing down its routes to Milan, Frankfurt, Geneva and Munich leaving just London and Paris for Europe.  So goodbye to our Italian, German and Swiss tourists.  Air Mauritius is also stopping its flights to Sydney, Melbourne and Durban.

They have decided to sell their old Airbus 340’s, intent on squashing us into the nasty A319’s.

All airlines must be incredibly difficult businesses to run in any environment, not just with high fuel costs. But don’t lower interest rates and more efficient equipment help to counteract this problem?

Open skies, the end to duopolies, cheaper facilities, more runways.  These are the way of the future if we want to survive.

While Air Mauritius has a responsibility to its shareholders, it also has a responsibility to the Tourism Industry.  In fact, no foreigner can do anything in Mauritius without first flying here.  Let’s not burn our only bridge.

Is Air Mauritius Expensive?

While working on this post, I researched the costs of Air Mauritius flights and discovered that while it has both cheap and expensive routes, its prices are not out of line with the market.   My method was to pick return economy flights all leaving on 12 Sept and returning on 17 Oct 2012.  I then calculated the rupee to kilometer cost using today’s internet rates.  Here are the results:

  • Air Mauritius – Paris  Rs2.12 per km
  • Air Mauritius – Mumbai Rs2.57 per km
  • Air Mauritius – Perth Rs3.13 per km
  • Air Mauritius – Johannesburg Rs4.38 per km (more than double the Paris cost)
  • Easy Jet: Gatwick – Gran Canaria Rs7.67 per km (so much for cheap airlines)
  • BA: Heathrow – Grand Cayman Rs7.01
  • AF: New York to Paris Rs2.65 (in this case I used Expedia to find the cheapest flight for my dates)

The discrepancy between the Air Mauritius Paris and Johannesburg flight costs needs some explaining although it has been pointed out to me that the longer the flight the cheaper the per kilometer rate.

No Support for our Crime Fighters

I was recently called to the offices of the CCID (Central Criminal Investigation Department) to make a statement on behalf of someone else. My visit to the CCID HQ at Line Barracks in Port Louis left me stunned.

I entered the square fortified compound via the pedestrian gate, past the queues for drivers licenses, through the ample grounds that include two soccer fields and parking. There was an air of sunny peace and tranquility. I stopped at the visitors’ booth at the entrance to the CCID section, and was helpfully told to go upstairs.

It was like stepping into the past. Up some dark stairs to a long passage along a planked floor that felt ready to collapse at any moment. In fact there was a big peace of metal covering what must have been a previously collapsed section. I walked past a number of office entrances until I found one that was fairly full of people.  There were about seven plain-clothes officers all busy in some way.  I stuck my head in and announced myself. An officer shouted for the investigator in charge of my case and I was soon shuffled to one desk, then another and finally a third one, as he struggled to find a spot for just him and me to conduct the interview.

In this tiny crammed and dingy cubicle, there seemed to be two men per desk, each struggling to do their job.   What I do on my laptop in five minutes is laboriously written out by hand on a pad with carbon paper copies.  Nothing is ever typed.  Handwriting from previous statements is deciphered by referring to others for their opinion. I did not see one computer screen or keyboard anywhere. Out of curiosity, I looked for a wifi signal.  Zip.

I know we live in times when government expenditure is sinful, but there is a price to pay.  These cops could double their productivity with enough office space and a few computers.  Information would flow more freely and reliably.  Databases could be accessed. I would hate to go to work in that place.  It is not just counter productive, it is a nasty place to spend your day. I was reminded of my stint in the civil service in 1979, in the days of typing pools. Except that we had a desk each, and the walls had paint.

No computers for Mauritian Detectives

We throw our arms up at the slowness of the police to deal with crime, but do not equip them with the basic tools to do so.  It’s like sending soldiers to the battlefront with spears against an enemy with guns.

Trouble at the BOI?

Suspicions of graft within the Board of Investment

The big news for the last week has been the accusation of a suspected bribery ring at the Board of Investment.  One or more of its officers are suspected of accepting bribes of Rs100 000 to push through Retirement Permits.  The investigation may reveal a broader range of permits benefited from some financial grease.  Or it may reveal no wrongdoing.  Time will tell.

Our CCID (Central Criminal Investigation Department) have made an arrest and others may follow.  The CCID will now investigate all those with regular contact with the BOI, such as Management Companies, to establish where these suspected bribes were coming from, and to identify all the dodgy permits.

So the bad news is that all pending applications will be put on ice until the CCID have a better picture.  This could be longer than a week or two, or three or four.

I find it hard to believe that this delay will continue for too long.   Some solution must and probably will  be found.  But until then, anyone with a pending application should take a deep breath, and wait.

Oh, and if a bribe was paid to get your permit, now is the time to be looking for an alternate jurisdiction!

Here is the BOI’s communication relating to this issue.  It is hoped that this vital cog in our economy gets back to normal as soon as possible.

Update July 30, 2012:  Published on the front page of The Independent today:

“Former BOI manager arrested by CCID

The inquiry by the Central Criminal Investigation Department (CCID) over the alleged traffic of occupational permits at the Board of Investment (BOI) led to the arrest of former manager of the Board of Investment, Dayanand Fowdar on Monday. He was arrested after another suspect, Iqbal Mohabuth, revealed his name.

Fowdar was suspected of receiving bribes worth Rs20 000 for helping a client of Mohabuth obtain an occupational permit. An initial attempt of the person of Indian origin failed and Fowdar requested the permit seeker to apply a second time, but this time to avoid filling in the sector he was applying for.

The second attempt was successful.

He was presented at the Port Louis district court after his interrogation and according to sources he will be back to be confronted with documents collected during the inquiry.  He received bail and rejected all claims levied onto him by Mohabuth.

Meanwhile, Ernst and Young is conducting an audit trail on behalf of the BOI to find whether all the procedures were followed.

Meanwhile the Front Desk Manager of the BOI, Marday Marian, code-named Tana, arrested on Friday, used her right to silence and refused to answer questions of investigators. She was represented by counsel Rama Valayden. She stated she will only speak in court.”

Watch out for the Crocodiles

Doing business in Mauritius can be dangerous for the unwary.

“What business opportunities are there in Mauritius?”

I get asked this question ALL the time.  And it vexes me.

For the following reasons:

  • If I know of a really good business opportunity, why wouldn’t I take advantage of it myself?
  • How do I know what a good opportunity is for the person asking the question?  Each person has their own unique talents, knowledge, personality and bank balance.
  • It is only a good idea if it is executed competently.
  • Because Mauritius is a very small economy, many good ideas won’t work, no matter how competently they are executed, because our demographics are not up to it.
  • The best opportunities are pursued from Mauritius but not to Mauritians.  The world is much bigger than Mauritius.  With the technical tools we now have available, this market is far more accessible than before.  If you have a business that works this way, it can be transferred very profitably to Mauritius, where taxes are lower, and the lifestyle is great.

If you are going to start a business in Mauritius make sure that you have a good chance of getting your work permit approved by the Board of Investment.  Ask them what they don’t want to see.  Use examples.  For example, if you want to start a restaurant in Grand Bay, the chances are slim that it will get approved, even if you know you are the best in the world.

If you are going to buy an existing business in Mauritius, be bloody sure that what you see is what you get.  This is common sense and does not imply a higher level of dishonesty than that found elsewhere.

Your legal recourse as a foreigner is technically the same as that of a local.  But remember, you are the newbie in the swamp, and the locals know where the crocodiles are.

Mauritius is a small business community.  As a result, it is really hard to keep a secret.  Any good idea will be copied, or attempts will be made to do so.  Competition is quickly identified, and dirty tricks abound.  Everyone knows someone in a high enough place to trip you up, so say nothing, get on with your job quietly, and wear flat shoes.

Resilience is probably the biggest personal requirement for setting up a business in a foreign country.  The waves of bureaucracy, followed by countless lessons to be learned by hard experience, and enhanced by maneuvers to thwart you, will be exhausting.  If you give up easily, give up now.

Apply common sense.  If you are going to set up an Art Shop in Grand Bay, thinking that tourists will be flocking to buy cool images of beautiful Mauritius, do a bit of modeling.  Have a look at how many Art Shops there are.  Then look at how busy they are.  Then work out how many paintings you have to sell each day to pay the rent.

If you currently have a business on a laptop, this will possibly be the easiest to move.

That way, you keep your feet out of the swamp, and the crocs go hungry.

GAAR!

Jack Sparrow in full flight.

For the last few months, any discussion involving the Mauritian Economy required regular use of the word “Gaar”.

No, Mauritius has not introduced Pirate-Speak.  Not recently anyway.   GAAR is the acronym for the General Anti Avoidance Rules introduced by the Indian tax authorities, which are set to take effect in 2013.

GAAR is the greatest threat to Mauritian commerce since the British landed 10 000 troops at Cap Malheureux (Unhappy Cape) in November 1810.  The French surrendered a month later, ending the legalized piracy promoted by Napoleon. Ships flying the French flag had been encouraged to attack and plunder British merchant ships trading with India, taking refuge in the coves of Mauritius.

Mauritians did quite well off this plunder, and traded it with American merchant vessels – that is until the British put an end to it.

Mauritius is a resource challenged country. We have to find creative solutions to build our economy.  Piracy, while tempting to some, is not a good idea anymore. Instead we built a financial services industry based on tax friendly legislation, supported by a network of tax treaties.

India signed a treaty with Mauritius in 1982.  This was the fourth country to do so, after Germany, France and the UK. The tax friendly regime was initiated in 1992. It did not take long for the world’s investors to work out that an investment via Mauritius into India – using the treaty – saved them a lot of tax.

All they needed to do was prove they were non-resident in India, and resident in Mauritius. To prove that you are resident in Mauritius, you need a specific Mauritius-India tax residence certificate issued by the Mauritius Revenue Authority. To get this certificate, you need a tax resident Mauritian company with two resident directors and various other bits and bobs to prove that the company is managed and controlled in Mauritius.

Over the years, Mauritius has been the conduit of about 40% of all foreign investment into India. If one compares the GDP of Mauritius to India, Mauritius is 0.56% the size of India.  This comes from 2010 World Bank Data: Mauritius: $9.73 billion (1000 million) – India: $1.73 trillion (1000 billion).

So, for the non numerate, this means the tiny little tail of Mauritius is wagging the huge dog of India.

The tail of Mauritius wagging the dog of India

Now comes the contentious bit:

If you removed the treaties, what would happen?

Bear in mind that the majority of investors into India use either Mauritius or Singapore as well as their treaties. It therefore follows that this majority would suffer a reduced return on their investments. This reduction in income could be significant enough to cause the capital that generates this return to leave India for other more attractive destinations, such as China, South America and Africa.

The Indian Revenue Service hates the treaties as they see mountains of taxable income departing their shores unscathed. But the Indian economy needs the capital that generates this income. It’s a bit like bad tasting medicine. You desperately need it, but it tastes awful.  So each year the Mauritian Revenue Authority gets a visit from the Tax Department of India to renegotiate the treaty. This is then followed by a sharp drop on the Indian Stock Exchanges as investment funds hedge their bets.  This in turn is followed by words of appeasement from the Indian Politicians.  And all is good for another year.

And that’s how the game was played until 2012.  India then had a gigantic exhibition of irrationality that could devastate their own economy. In a politically driven fit of madness they proposed and approved the General Anti Avoidance Rules, or GAAR, which will come into effect in 2013.

What these rules will try to do will be to attack any investor who they think is bouncing money through a treaty country purely, or even partly, for the avoidance of tax. And if they catch you, they can go all the way back to 1962 with their attack.

The SENSEX from March 7 to June 2012

The obvious effect of this maneuver is to dry up any new investment, and hasten the withdrawal of current investments from the Indian economy. Not only will India experience a slow down or halt in foreign direct investment – the fuel that finances growth – but poor little Mauritius will experience a shake up (at best) or tsunami (at worst) to their financial services sector.

So we talk and talk and talk.  Gaar this.  Gaar that.

GAAAAAAAAARRRRRRR!!!!!

Update:

You can put lipstick on a pig, but it is still a pig.

There is a lot of maneuvering, ducking and diving, and attempts to temper the effects of this insanity while at the same time, trying to save face.  The “Draft Guidelines” are an attempt to put lipstick on a pig.   Sorry, India, investors like certainty.

3 July 2012.

Here’s a report on what’s going on at the economic level from the Indian Express. 6 May 2012

Here’s a report on what’s going on at the political level from the Indian Express.  7 May 2012

Here’s an update on the falling Indian Rupee and early signs of a market crash in India from the Economic Times. 6 June 2012

Let’s all Build Shopping Centres!

I imagine one morning in January 2010 when ten different property developers returned to work from their vacations, and asked themselves what they should do for the new year.   They all had the same idea – to build shopping centers in Mauritius.

It went really well at first.  They all found land owners eager to contribute their land to the projects.   The sugar farmers were only too happy to convert low value cane land into high value commercial real estate.  The developers counted and analysed the number of people who went to the shops in their target area, collected a bunch of investors looking for something new, found a builder and an architect …and off they went, proposals in hand to the local municipalities and regional offices, acquiring permission to build.

Here is my incomplete list of shopping centers recently completed or under construction that include expats as their target market:

Cascavelle (near Flic en Flac)

Bagatelle (near Ebene)

Center Point (near Trianon but stalled at present)

Trianon Shopping Park (near Trianon, unsurprisingly)

Super U (near Grand Bay, extended and renovated)

La Croisette (near Grand Bay)

Circle Square (near Grand Bay)

Mon Choisy (near Grand Bay and right next to La Croisette)

Winners (near Grand Bay competing with Store 2000)

In addition to these, a number of other expat orientated centers are holding on or in decline:

Reseau Creole (Black River)

River View (near Black River)

Les Halles (Phoenix)

Trianon (Game has departed while Shoprite and Espace Maison are keeping this one going)

Store 2000 (near Grand Bay)

Jumbo (Near Phoenix)

Jumbo (Near Riche Terre)

This is not an exhaustive list, but shows how much competition there is.  There are other centers and supermarkets all over the island.   Winners is everywhere.

La Croisette, near Grand Bay. Lots of offices, shops and apartments.

Many Mauritians do not own cars, and trolley loads of stuff

does not fit well on the family moped…

Fair enough, I have seen incredible things carried on mopeds but this is not the norm.

There are many Mauritian families who run out of money before the end of the month.

For them, it is a godsend to pop over to the local Tabagie to get a small quantity of essentials on credit before payday.  A lot of hotel guests fill up on beer and water from these stores, rather than pay the high prices in their rooms.

A typical Mauritian Tabagie. This one in the South near Belle Ombre

What I think (and I could be wrong) is that the developers did the demographic analysis without considering the growth in total shopping center capacity.  It is going to take a whole lot of new expats in Mauritius to fill these shops.

While all this construction has given many people jobs, and the foreign investment flowing into Mauritius is good for the economy, I wonder what the future holds?  For all the shop owners renting space, and the investors’ who have balance sheets that reflect a degree of unjustified optimism.

I fear that one day commercial property values will be tested.

The New Yorker cartoon that inspired this post.

 

What Future for Foreign Kids?

Children need their own permits once they turn 18

One of the negative aspects of moving to Mauritius relates to children who are over 18 years old.  They can only live in Mauritius if they acquire their own permit.  This includes all holders of any form of residence permit or work permit, and also applies to children of citizens, if those children are not citizens of Mauritius.

So, what can one do?

The obvious solution would be to find the child employment, or set them up in their own business.  The same rules apply to you if you are 19 or 39.  So how easy is it to find a job for a kid with no experience that pays Rs45 000 per month ($1 600).  Not easy, unless you have a post in your own company that requires the child’s skills.  Even then, you would need to satisfy the BOI that this employee is a valuable addition to the country’s labour pool.

Give your child some capital to qualify as an investor.

The second solution would be to set the child up in their own business.  This is unlikely to survive the BOI’s scrutiny, and even less likely to survive economically.  Not everyone is a Bill Gates.  Of course, you could give the child an early advance of their inheritance.  The 19 year old could then invest $500 000 into an RES or IRS.   Don’t laugh.  We have seriously worked on options like this.

I bumped into an advisor to the Prime Minister’s Office last week and asked him if his people were aware of the problem of residence for post-school children.  His reply was that other countries treat children of visa residents the same way.

So I went on a Google inspired journey through the South African visa system.  Firstly, temporary residents in South Africa (those who have work permits for less than 5 years) may apply for permits for their first kin (Parents, spouse, life partner, children).  While these people may hold a residence permit, they may not work.

Then I had a look at Australia.

You can be sponsored if you are a spouse, fiancée, child/adopted child, parent, orphan relative, special need relative, aged dependent relative or last remaining relative of a qualifying sponsor who is resident in Australia.

Sponsorship isn’t a bad idea.   We are trying to attract wealthy expats to Mauritius.  I am sure they would be happy to provide a guarantee of some form ensuring the continued support of their next of kin, whether this is their aged mother, or their recently educated child.

So all we ask is this:  If Mauritius want someone to invest $500 000 or more in a home in Mauritius, why not make it easier for the family to live there, including when the kids have left school?  I am all for children seeking their fortune beyond the confines of the Mauritian economy, but until they are ready, can’t they stay with their parents?

Citizenship for Investors?

In a fairly recent update to a Government website, there is the following information:

NATURALIZATION FOR INVESTORS

Under section 9(3) of the Mauritius Citizenship Act an investor may be naturalized as a citizen of Mauritius if:

(i) he has invested a sum of not less than 500,000 US dollars in Mauritius;and

(ii) he has resided in Mauritius for a continuous period of not less than 2 years preceding the date of his application

Application under section 9(3) of the Mauritius Citizenship Act shall be submitted to the Secretary for Home Affairs in the form set out at Appendix V. The application shall be subscribed in the presence of a Judge or the Master and Registrar of the Supreme Court or a District Magistrate.

An applicant for Naturalization under section 9(3) of the Mauritius Citizenship Act shall in addition place an advertisement in two daily newspapers in the form set out at the bottom of page 4 of the application form referred to above.

The following documents shall be submitted in original and two photocopies along with the application and the renunciation forms:

(a) birth and marriage certificates of applicant;

(b) first five pages of applicant’s passport;

(c) residence permit of applicant;

(d) certificate of investment in Mauritius;

(e) one issue of two daily newspapers containing the advertisement      referred to at section above; and
(f) Morality Certificate

Now don’t get too excited here.  Citizenship by naturalisation is granted on a discretionary basis by the Prime Minister’s Office.  The above information simply lays the ground rules for applications that will be considered.  The important part is that “an investor MAY be naturalized as a citizen…”

This introduction replaces the old permanent residence that could be acquired by investing $500 000 in specified investments in Mauritius.

At a recent meeting with South Africans, the boss of the Board of Investment, Ken Poonoosamy told those there that the BOI would assist in compiling the report to the Prime Minister’s Office that shows how the investor has contributed to the Mauritian Economy.

What is so good about Citizenship?  The main benefits are that a citizen may vote and participate in all aspects of life in Mauritius.  A citizen has a perpetual right to residence, the spouse and children may also be able to acquire citizenship in time, the spouse may work and of course there are no restrictions on property ownership.

One bit that people sometimes do not take into account is that a non-citizen child of a citizen must get work and residence permits on attaining the age of 18 if they are not a student in Mauritius.  I know, because I had to do this for my eldest daughter.  She now lives in Australia.

QUESTION:

I was asked the following question by Dave Weskus after posting this, and decided it was important enough to include in the post rather than add to the comments:

“Please can you clarify what the clause means by ‘residing in Mauritius for a continuous period of not less than two years preceding the date of application’.

Does this mean that the applicant must remain in Mauritius for a continuous period of two years without leaving the country? Or does it mean his primary place of residence must be in Mauritius for two consecutive years, thus allowing for  travel abroad for business or personal reasons during the two years?”

ANSWER (sort of):

Ken Poonoosamy was asked a similar question in his session with South Africans, discussed in another post.  His reply was that the possession of Tax Residency Certificates (TRC) issued by the Mauritius Revenue Authority for the years under question would suffice.  Bear in mind that these require one to be present in Mauritius for more than 182 days per calendar year.  So if you arrive in August one year, you can apply after July the following year for a TRC or later if you have been away on holidays or business trips.

So does continuous mean non stop or does it allow for permissible periods of absence?  I think it allows for times of absence, and so does the Head of the BOI.  But does 183 days one year plus 183 days the next add up to “two continuous years”?  Or does one have to be physically present in the country for 365 x 2 days?  Bureaucrats have a way of interpreting the law the way they see it, which is usually not the way we see it.

What the PM’s Office definitely do not want is someone who rents a house here for two years and visits occasionally, trying to give the impression that they are continuous residents.

So I really don’t know.  But if any applicant is rejected for insufficient time after providing two consecutive TRC’s then we will know for sure.  Sort of.