In July 2009 I posted an article titled “Too Many South Africans in Mauritius?” It was controversial probably because many did not notice the question mark at the end of the title, or did not read what I considered to be a fairly balanced view. Then again, maybe my idea of balance is not someone else’s.
At the time, Mauritius had lowered the minimum salary an expatriate needed to earn to get a residence permit. It was down to $1000 (Rs30 000) per month. This allowed a lot of expats, not just from South Africa, but also Europe and the Sub Continent to form local companies with a single employee – the expatriate. The company would pay the Rs30 000 salary and they would qualify for a permit.
At the same time, a large contingent of South Africans, victims of a weakening economy, high taxation, declining public services, legislated discrimination – called Black Empowerment – and who had become fearful of the future, expressed an interest in settling in Mauritius.
So, while there was still a ‘Right of Admission Reserved’ sign on the front door of Mauritius Inc, it was not that hard to get in. And get in they did. Residence permits from South Africa climbed to a high of about 1300 I am told. That is one per family equating to about 5000 SA Expats.
Then there was a whiplash negative reaction against the SA Expatriate communities that had sprung up in Black River and Grand Bay, and to South Africans in general who personified the Expatriate So Many of us Fear: Someone who threatens the Mauritian lifestyle, labour market, property market and general well-being. No matter how irrational this fear is, it is still there.
The result was that the Authorities raised the bar to entry, and fudged the criteria. They made the minimum salary Rs75 000 ($2500). Then they lowered it to Rs45 000 ($1500) per month. In addition to the salary hurdle, the Expat applicant also submits to a review of whether the skills are needed in Mauritius. There are no guidelines to this and it seems to be a moving target. Expats who qualify by salary can still fail by job category. We regularly contact the BOI for guidance before submitting an application.
And predictably, the expats who scraped in on Rs30 000 per month could not afford the increase and packed up and went home, or to greener pastures. Apparently the number of South African Expatriate Permits is down to 350 (from the 1300). The Minister of Finance has noticed this, and called a colleague of mine to ask if there was a problem.
The Ministry of Finance (through the Board of Investment) together with the SA High Commission is holding two sessions with Mauritius based South African Expatriates to try and find out what is wrong. Since our business also involves setting up Expatriates in Mauritius, I am going to see what they have to say.
My next post will report on that meeting.