By Andrew Amoils
A new report from AfrAsia Bank and New World Wealth takes a look at the ‘rise of Mauritius’ as a global wealth hub, as well as the global wealth and wealth migration trends over the past 10 years.
See link for the full report.
Residential prime property prices in Grand Baie in Mauritius are now the second most expensive in Africa, after Cape Town (measured in US$ per square metre).
According to the report, over the past 10 years total wealth held in Mauritius has risen by 195% (in US$ terms), making it the fastest growing wealth market in Africa and one of the top three fastest growing worldwide over this period.
Total wealth held in Mauritius now amounts to US$43 billion while per capita wealth stands at US$33 000, which means Mauritius is the wealthiest country in Africa on an average wealth per person basis.
This five bedroom villa in a development in Grand Baie, Mauritius, is on the market for around R20.5m (current exchange rate) - click here to view.
The strong growth in wealth in Mauritius has been assisted by:|
- Strong economic growth.
- A thriving and growing financial services sector, particularly in offshore banking, fund management and private banking.
- Strong high-net-worth individual (HNWI) growth – a large number of wealthy individuals have moved to Mauritius over the past decade, especially from Europe and Southern Africa. In addition, a large number of locally based HNWIs have reached HNWI status as the local financial sector has grown. Mauritius is now home to around 4 600 HNWIs, compared to 3 800 HNWIs a year ago and 1 400 HNWIs ten years ago.
- Secure ownership rights. This is the most critical component of successful wealth creation globally. Ownership rights are strong in Mauritius, which encourages locals and foreigners to invest in property and businesses in the country. Zimbabwe offers a case in point as to what happens when ownership rights are stripped – once assets are taken away they tend to lose value as no one is willing to buy anything.
- Low taxes which encourage business formation and appeal to retirees. Company and personal income tax rates are only 15%, with no inheritance or capital gains tax. Singapore has a very similar tax structure to Mauritius.
- Low level of government regulation in the local business sector (when compared to nearby countries such as South Africa).
- Automatic permanent residency if one buys a US$500 000+ home in the country. This encourages wealthy people to move there.
- Lifestyle - beaches, weather, golf courses and scenery.
- Ease of doing business in the country (Mauritius ranked 1st in Africa in the World Bank’s 2018 Doing Business Report and 25th worldwide).
- Low jobless rate and low inflation rate.
- It has a well-developed banking system and stock exchange. This encourages people to invest their money within the country and grow their wealth locally. It also ensures that any economic growth filters through to wealth creation.
- Individuals living in Mauritius are free to invest overseas (with no exchange controls) – this encourages wealthy people to use the country as a business and investment hub.
- It has a well-developed free media. This prevents government from getting away with wrongdoing.
- It is a convenient base for investing and doing business in Southern and East Africa.
- Safety – Mauritius was recently rated by New World Wealth as the safest country in Africa along with Namibia and Botswana.
- Strong FDI (foreign direct investment) inflows - Countries that are investing heavily in Mauritius include: France, China, South Africa and the UAE (according to Bank of Mauritius).
- Good schools such as Northfields and the International Preparatory School (IPS). This encourages wealthy people to stay in the country.
- Rising residential and commercial property prices. Residential prime property prices in Grand Baie in Mauritius are now the second most expensive in Africa, after Cape Town (measured in US$ per square metre).
- Access to first-class food and produce – prime shopping centres, Food Lovers market, etc. This encourages wealthy people to stay in the country.
Live amidst nature in this five bedroom home in a development in Tamarin, Mauritius, with magnificent views of the bay priced at just over R9.7m (current exchange rate) - click here to view.
Main drivers of wealth in a country:
According to the report, the top factors that encourage wealth growth in a country include:
- Strong safety and security - woman and child safety is particularly important.
- Strong ownership rights - Zimbabwe offers a case in point as to what happens when ownership rights are stripped – once assets are taken away they tend to lose value as no one is willing to buy anything.
- Strong economic growth - economic growth is usually linked to wealth growth.
- A well-developed banking system and stock market - insures that people invest and grow their wealth locally. Also insures that GDP growth leads to wealth growth.
- Free and independent media - allows for the dissemination of accurate information to investors.
- Low level of government intervention – government tampering in the business sector creates large inefficiencies within an economy. Government owned enterprises and parastatals are also a problem.
- Low income tax and company tax rates - Dubai and Singapore are examples of the power that tax rates can have in encouraging business formation – both have very low tax rates.
- Ease of investment - barriers such as exchange controls inhibit wealth growth.
- Wealth migration - the migration of HNWIs to a country helps generate wealth.
Mauritius scores well on all of the above points.
According to AfrAsia Bank CEO Sanjiv Bhasin: "Mauritius has all the right elements to be a world-class destination".
This three bedroom villa in a development in Beau Champ, Mauritius, is selling for around R37m (current exchange rate) - click here to view.
Notable hotspots for prime property in Mauritius include:
- Grand Baie
- Port Louis
- Tamarin
- Anahita
Notably, Mauritius has an upcoming sustainability summit to be held in October which will look deeper into its future goals.
See link for more details on that.
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