Mauritius is Very Attractive for South African and French Nationals

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The success of this recipe is evident from similar initiatives by the United States, Canada, France, Portugal, Spain, Netherland, the UAE, New Zealand and Australia, to name a few. Where you “tick the right boxes”, the red carpet is rolled out. The benefits of Mauritius are easy to understand, even more so with its proximity to South Africa and for those with continued African continent interests. The very low tax makes it a computational no-brainer. However, this does not come at the expense of service delivery. The environment is personally safe, there is no load shedding, no National Health Insurance, but excellent medical care.

The Mauritius Minister of Finance, Dr. The Honourable Renganaden Padayachy;
with Ms Aditi Boolell of Boolell Advisory Mauritius and Mr Jerry Botha,
Managing Partner of Tax Consulting South Africa; 19 August 2024

There are about 10,000 South Africans in Mauritius, according to the South African High Commissioner to Mauritius, Her Excellency Dr. Manzini. This makes South Africans the second largest foreign expat population, after French Nationals which are the largest. The benefits for both South African and French nationals are typically the quality of life and a very favourable tax regime.

The Mauritius taxes allow you to not only create real wealth, but also grow your wealth and even pass it on without government taxing most of it. The top individual tax rate is 20% (South Africa is 45%), there are no capital gains tax (South Africa to 18%), no estate duty (South Africa to 25%), corporate tax is up to 15% (South Africa 27%) and no Mauritius tax on dividends (South Africa is 20%). This is a simple mathematical exercise why in South Africa it is tough to get ahead, even before the South African promotors of National Health Insurance reveal how their plans will be funded.

In South African news we hear about critically skilled foreigners and investors being kept out or uncertain with a current 150,000 visa backlog. The new Minister of Home Affairs, Dr Leon Schreiber, is someone who speaks a language which business understands and appears fully committed to Home Affairs despite its funding, corruption and porous border challenges. But will he be supported by the rest of the South African Government? In Mauritius, a long-term visa application takes only a month where you make use of a competent advisor. You do not need to buy a property to acquire a right to stay long-term in Mauritius and the system is holistically welcoming, as it is supposed to be.

An interesting fact about Mauritius is that unemployment is less than 6% and that excludes the informal sector which makes the effective unemployment rate even lower. Even in low unemployment, Dr. The Hon Padayachy sees not only a risk to economic growth, but also opportunity. Mauritius must attract more skilled foreigners, entrepreneurs and foreign capital – people and industry make the whole economy grow.

Interestingly, this is also identified by the South African Home Affairs Minister Dr. Schreiber, who says that increasing South African critical skill immigrants from the current 4,000 visas approved per year to 11,000 per year; will nearly quadruple the South African economic growth rate.

In an increased global troubled world, which is simply unaffordable for most South Africans, the Mauritius option is increasingly making sense.

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Wanted: Experienced C-suite Executives

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Almost 24% and 17% of respondents, respectively indicated they have to look far and wide for suitable Chief Financial Officers, and Chief Technology Officers.

This is the largest survey among verified employers about the critical skills that are most in demand in South Africa.

Marisa Jacobs, Managing Director of Xpatweb, said as corporates expand globally, they look for executives with international experience so they can take their businesses into Africa and beyond. This means they must often expand their recruitment efforts internationally; she told Jeremy Maggs in an interview on Moneyweb.

Recruiting the right C-suite executive for the job, is sometimes easier said than done.

According to Tanya Tosen, a Master Mobility Specialist at Tax Consulting South Africa, this also comes at a huge cost as the average assignment to recruit and relocate an employee with the necessary critical skills, is approximately 3 to 5 times more expensive than obtaining a local resource in a respective country.

Therefore, companies must plan for the cost of the total package, typically covering salary, annual benefits, once-off relocation costs, and tax and social security liabilities.

Tosen told delegates at Xpatweb’s recent Mobility Conference that due to the global economies and constant pressure the need for cost control has reached new heights, thus making a sound mobility strategy for companies more important than ever.

In addition, it should be noted that cost containment is not about arbitrarily cutting costs, but about spending more strategically to develop a clearly defined mobility plan that allows for the right people for the right reasons to be appointed, and so ensuring a return on investment in mobility.

She demonstrated the rising cost of housing and motoring worldwide which can have a huge impact on international assignments specifically with housing rent which has increased in many countries, including South Africa.

Rent in sought-after areas in Cape Town increased by about 9% year-on-year, but the low value of the rand has made the Mother City increasingly popular among digital nomads also adding to pushing these rental prices higher, Tosen said.

How does South Africa fare

Despite certain challenges, expats’ happiness in South Africa has improved significantly over the last year. She referred to the Expat Insider Survey by InterNations, ranking South Africa 29th out of 53 countries on the overall rankings of Best Destinations for Expats in 2024. This is an improvement of 19 spots compared to 2023.

Expats in South Africa indicated they are excited about the leisure opportunities, general cost of living, good housing, healthcare and pleasant environment and climate. Weather conditions also count in our favour and respondents said they make friends easily in South Africa.

Almost 33% may stay forever, the Expat Insider Survey showed.

Issues hindering expats from coming to our sunny shores

Safety is the main issue for expats in South Africa. We rank the lowest on personal safety and political stability, dragging down our overall rating. A less than desirable ranking in the subcategory Travel and Transit due to poor affordability and availability of public transport, also weighs on South Africa.

Tax Regulations

Companies must keep in mind when individuals cross borders, the complexities of tax regulations and immigration requirements can pose various challenges. Businesses must keep up with Government regulations related to ways of work in the country they find themselves in. It is advisable to get help from Mobility and Tax professionals who can assist businesses to stay compliant, deploy global talent strategically, and track and align related expenses and outcomes, Tosen said.

Mobility experts can help corporates in recruiting the necessary skilled employees, plan for this cost to ensure it delivers a return and stay on top of tax and immigration regulations.

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Home Affairs aiming to clear visa backlog by December – Minister

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This was highlighted by the new Minister at an engagement with business and key stakeholders, hosted last week by visa consulting service Xpatweb.

Schreiber said that discerning the scale and causes of the backlog was complicated as a result of the department’s system being extremely fragmented, with paper-based applications and moving parts scattered across the world.

Schreiber highlighted that there was a dedicated team working on addressing the backlog and said he was optimistic that “there will be no backlog by Christmas”.

He also emphasised that work must not stop at addressing this backlog, but rather, that it should be used as a springboard to improve processes moving forward.

This would entail measures such as increased technology use and automated processes in the department’s system.

In this vein, Schreiber said the department must pursue a proof of concept, to be able to demonstrate that it can automate its processes and, most importantly, automate adjudication where decisions are made in the system.

He also underlined the importance of collaboration and buy-in from the private sector and called for them to support this and the visa reforms being undertaken.

In outlining his plans for the department over the next five years, Schreiber said that these would focus on three key areas, namely, ensuring that civic services were delivered efficiently and effectively; shoring up its role in national security; and enabling economic growth, investment, tourism and skills attraction.

He pointed out that the latter was an area of the department that had not been properly capitalised on.

Schreiber emphasised that, without neglecting the other two areas, the department would be seeking to streamline the process of bringing highly skilled workers to the country.

He posited that studies had shown that attracting highly skilled workers – of which there was a shortage in the county – had the potential to increase the country’s GDP and unlock more job opportunities.

He highlighted that the country must pursue such interventions in the short term to address the high unemployment rate.

Schreiber said that the importance of this was understood broadly at a government level, with President Cyril Ramaphosa previously stating that where the country did not have the requisite skills available immediately, it must attract people with the appropriate qualifications and experience; and that government would continue with the visa reforms introduced in the last few years, attract skills and investment, and grow the tourism sector.

Meanwhile, Xpatweb MD Marisa Jacobs said that an issue the company had picked up was that visa processes were often not done correctly. This was evidenced by many of the company’s clients’ visas being rejected initially but granted after an appeals process.

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Schreiber upbeat on clearing visa backlog by end of 2024

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Home affairs minister Leon Schreiber is optimistic the department will be able to clear a backlog of more than 300,000 visa applications by Christmas.

At an engagement with stakeholders in business, hosted by independent visa and work permit company Xpatweb on Thursday, Schreiber outlined his plans for the department over the next five years.

He identified the clearing of the backlog as one of his top priorities. He said this was key to boosting economic activity while using the process as a trial to test what works and what does not as he goes about fixing the department.

“We need to view this project as a case study of how to drive reform in the whole department. If this can be achieved, then we will be able to do a lot more,” he said.

South Africa has a backlog of more than 300,000 visa applications stuck at local home affairs offices and foreign missions. Recently, the department said it had finalised 92,886 of these.

Fast-tracking visas for skilled workers to enter the country has been identified as one of the key economic reforms of the government. In April, amendments were made to the country’s immigration laws, allowing foreigners earning more than R1m a year to take out digital nomad visas. Other amendments include the introduction of a new point-based system for work visas, which replaces the critical skills list.

Schreiber said one of the contributing factors to delays in processing visas and other documents is that the department still uses paper-based applications but does not have enough staff to go through them speedily.

“The problem at its core is system processing. There is a big need for system reforms. Look at Sars [South African Revenue Service] today, I’m not saying it’s perfect, but it’s operational. If we did it once, why can’t we do it again?” he asked.

Schreiber said integrating better technology in the department to assist with things such as the verification of documents could reduce the pressure on employees while speeding up the rate at which applications are processed.

The department’s systems remain fragmented, and some applications, especially those done outside the country, tend to get lost in the system.

Standing in a queue for six hours is not dignifying. If home affairs can work, South Africa will work

Leon Schreiber, home affairs minister 

“We are literally dealing with paper-based applications that are scattered all over the country, we need a better way to deal with this.”

Phindiwe Mbhele, director of corporate accounts at home affairs, said her team was already looking to develop a database that would track visa applications made overseas, as this has proven to be a major headache.

In April, a dedicated team was set up to deal with the visa backlog, with auditing firm Deloitte and FNB  providing resources to help with the process

Schreiber appealed to other private sector players to do the same.

“We need your help as the private sector to ensure that we reform home affairs to make it a place that can restore dignity to our people. Standing in a queue for six hours is not dignifying. If home affairs can work, South Africa will work.”

Marisa Jacobs, MD of Xpatweb and a representative of Business Unity South Africa, said sentiment towards the plans set out by Schreiber was positive, but there were still some concerns. She cautioned that in the rush to clear the visa backlog by the end of 2024, there could be a high number of applications rejected because they were not thoroughly checked.

“I am saying this because there have been instances where some of our clients would be rejected, but the application would then be approved after an appeals process,” she said.

Schreiber said the department would ensure that every application received the attention it required.

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Agterstand met visums dalk teen Kersfees opgeklaar

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As die land se toerismesektor boonop met dubbelsyfers kan groei, sal dit nog sowat 0,6% by ekonomiese groei voeg, het die minister die afgelope week op ‘n byeenkoms met sakelui en verteenwoordigers van verskeie ambassades in Johannesburg gesê.

Volgens hom wys dit hoe noodsaaklik ‘n doeltreffende departement van binnelandse sake is vir sterk ekonomiese groei en werkskepping.

Schreiber het gesê hy was bemoedig toe hy die afgelope Donderdagoggend in Pretoria sowat 60 werkers besoek het wat voltyds werk om die visumagterstand uit te wis. Met dié samewerkingsprojek tussen die departement en private sektor, glo hy die agterstand sal teen Kersfees uitgewis wees.

Danksy die span se werk reik die departement nou sowat 15 000 visums per maand uit. Dit kom neer op meer as 700 per dag, terwyl die agterstand met visums tot onlangs nog teen 150 per dag gegroei het.

Die span het vir Schreiber berekeninge gewys oor die uitsette (getal visumuitreikings) teenoor die belegging in die projek, waaronder salarisse vir die werkers. Dit kos sowat R96 per verwerkte aansoek.

“Dit beteken die Koeberg-ingenieurs wat die veiligheid moes verseker van Afrika se enigste kernkragaanleg vir die volgende 20 jaar, kos net R96 per persoon om hulle hier te kry. Dit is nou ’n lonende belegging. Dink aan die ekonomiese waarde daarvan.”

Volgens Schreiber is die visumagterstand in ‘n groot mate weens ‘n gefragmenteerde stelsel en dit was moeilik om die probleem te kwantifiseer.

“Die departement het grootliks ‘n probleem met sy verwerkingsstelsels. Ons wil die departement transformeer in ‘n omgewing wat eerstens digitaal funksioneer en waar outomatisering ‘n belangrike rol speel.”

Hy het gesê as die Suid-Afrikaanse Inkomstediens (SAID) die laaste paar jaar suksesvol van ‘n stelsel met ‘n papier-grondslag na ‘n voorste digitale en geoutomatiseerde stelsel kon beweeg, kan die departement van binnelandse sake dit ook doen.

Marisa Jacobs, besturende direkteur van Xpatweb en ‘n verteenwoordiger in Busa en Nedlac, het tydens ‘n paneelbespreking met die minister gesê die sakesektor sien baie positiewe verandering, maar is besorg oor te veel visumaansoeke wat afgekeur word.

Wanneer groot maatskappye teen dié besluite appelleer, is hulle in feitlik alle gevalle suksesvol, wat wys die aanvanklike besluit om ‘n aansoek af te keur was foutief.

Volgens Jacobs is daar ook verskillende standaarde en vereistes by verskillende Suid-Afrikaanse sendings in die buiteland waar aansoeke ingedien word.

Dis verwarrend en maak dinge moeilik vir maatskappye wat meestal so vinnig moontlik buitelanders met die nodige vaardighede by hul Suid-Afrikaanse bedrywighede wil laat inval.

Schreiber het in antwoord hierop gesê outomatisering kan baie help met die gehalte van besluite as ‘n rekenaar ‘n aansoek afkeur op grond van gebrekkige of verkeerde inligting.

Volgens die minister kan eenvormige vorms by die verskillende Suid-Afrikaanse sendings in die buiteland sake vir almal vergemaklik.

Schreiber het gesê as die projek om die visumagterstand uit te wis, suksesvol is, sal die departement lesse daaruit gebruik om ander probleemgebiede te takel en só ‘n algehele verbetering in die departement se doeltreffendheid teweeg te bring.

“Hy wil nie die departement en sy amptenare sien as ’n groep brandbestryders wat van die een brand na ’n ander steier nie.

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