Amendments to IRS/ RES/ IHS/ PDS and SCS Regulations

On 6 December 2024, Cabinet took note of the amendments to be brought to the regulations on IRS, RES, IHS, PDS and SCS (Schemes) to provide for, inter alia, the mandatory requirements for non-citizens acquiring a residential property, under the Schemes, to effect payment of 85 % of the purchase price in Mauritius rupee to the promoter and the remaining 15 % of the purchase price in foreign currency or Mauritius rupee.

CURRENT PRACTICE

2. Prior to these amendments, non-citizens acquiring a property under IRS, RES, IHS, PDS and SCS had the flexibility to pay the entire purchase price in foreign currency (USD or EUR or any hard convertible currency (FX)) or Mauritius rupee provided that the funds were transferred from overseas. If a loan was contracted from a local bank at least USD 500,000 had to be transferred from overseas.

NEW REQUIREMENTS

3. To align with evolving economic and regulatory considerations, the following regulations came into force on 13 December 2024:

• Economic Development Board (Smart City Scheme) (Amendment No. 2) Regulations 2024;
• Economic Development Board (Property Development Scheme) (Amendment
  No. 2) Regulations 2024;
• Economic Development Board (Invest Hotel Scheme) (Amendment No. 2) Regulations 2024; and
• Economic Development Board (Real Estate Development Scheme) (Amendment No. 2) Regulations 2024.
• The key changes are outlined below:

MANDATORY CURRENCY REQUIREMENTS

• 85% in Mauritius rupees: Non-Citizens acquiring a property under these Schemes, after having transferred funds to Mauritius from abroad in hard convertible currency, must now pay 85% of the purchase price in Mauritius rupee to the promoter.
• 15% in foreign currency or Mauritius rupees: The remaining 15% of the purchase price can be paid in either foreign currency (USD or EUR or any hard convertible currency (FX)) or Mauritius rupee.

NOTARY’S ROLE AND RESPONSIBILITIES

In accordance with the Notaries Act, the purchase price or consideration, related to such acquisition by a non-citizen of an immovable property, is transferred to the notary’s account in USD or EUR or any hard convertible currency (FX). The notary, in addition to their general duties:

1. should transfer to the IRS company, RES company, IHS company, PDS company, smart city company or smart city developer, as the case may be:
   a) 85% of the consideration in Mauritius rupee; and
   b) the remaining 15% in USD or EUR or any hard convertible currency (FX) or Mauritius rupee.
2. shall cause a notarial deed drawn up by him to be registered with the Registrar-General within 8 days from the date of the deed and make payment of registration duty in USD or EUR or any other hard convertible currency (FX) as is the current practice.

LOCAL LOAN FINANCING

Where the price of the property exceeds USD 750,000:

• The first USD 750,000 or its equivalent in any hard convertible foreign currency shall be transferred to Mauritius and paid in Mauritius rupee to the promoter as per above.
• A loan for the remaining amount of the purchase price may be contracted in Mauritius rupee with a bank in Mauritius, and the repayment of the loan is effected in any hard convertible foreign currency.

These amendments are effective as from 13 December 2024 and will apply to all new property acquisitions under the Schemes.

In the event of any ambiguity in the information contained herein, the provisions of the above-mentioned regulations shall prevail.