$1 Million Will Get You Citizenship In Mauritius: Investment Attraction or Haven for Tax Evasion?

Mauritius is selling citizenship and passports for $1 million and $500 000 in a bid to raise it's budget and to attract a lot of foreign investment. It is a smart move for the island nation, but could also pose some considerable risks to its overall image. 

In attempts to boost the nation's sovereign wealth fund, foreigners now have an opportunity to get Mauritian citizenship for $1 million. The $1 million contribution is a non-refundable fee but will get a foreigner Mauritian citizenship. Applicants’ spouses and dependents are also eligible for citizenship with an additional contribution of $100,000 per family member.

The announcement was made during the country's 2018 budget presentation by Prime Minister and finance minister Pravind Jugnauth. Also on the cards is an offering of Mauritian passports in exchange for the lesser sum of $500,000 paid to the Mauritius Sovereign Fund, and $50,000 per passport for family members.

The Mauritian government wants to increase the country's funds so that budget expenditure rises by 5% to 133.8 billion rupees ($3.8 billion) in 2018/19 fiscal year. In light of such measures, the idea of selling citizenship and passports sounds a noble one to the authorities in Mauritius. 

For applicants to get citizenship and passports, the government is going to lay down a set criteria which the applicants will have to conform to in order to get the privileges authored by the Mauritian government. The scheme which will be managed by the Economic Development Board (EDB) has been criticized by opposition politicians who believe their nation has been reduced to a commodity.

Leader of the populist Rezistans ek Alternativ party, Ashok Subron, said: "The notion of nationality of a country is not a product. It has no price and is in no way a commodity."

The move has not pleased the Mauritians. They now believe that their country is almost "a prostitute". An opinion piece as regards this on the Mauritian website Lexpress read, "Once a small country like Mauritius who is already under attack (albeit wrongly) by a few international non-governmental organisations and media about being a haven for tax evasion and money laundering gets known by the world as one which sells citizenship and passport, that precious document will come under high scrutiny. In 2014, the United Kingdom (UK) was close to applying visa prior to travelling of Mauritians. This was prompted by the fact that a number of persons holding Mauritian passports travelled to UK to be illegal immigrants."

"Suffice it that one shady character is picked up with a Mauritian passport and citizenship that there will be widespread suspicion about all Mauritian passports. Passport will be shunned by many countries in Europe."

There is general feeling of resentment among Mauritians on the alienation they could be facing because of the privileges that foreigners are being afforded with. There are also fears of corruption pervading this scheme. Another bone of contention is that since citizenship gives one the right to vote, foreigners will vote but then Mauritians abroad still can't vote. There is already growing disapproval with the way land is being sold to foreigners and how Mauritians are deprived of large stretches of beach space. 

Mauritius' economy is anchored by the tourism industry and according to the latest edition of The Economist Intelligence Unit released in February, Mauritius is the only African country that is practising a full democracy as at 2017. It is also the best country when it comes to doing business in Africa. It is ranked 25th worldwide in this year’s World Bank’s Ease of Doing Business report.

This move by the Mauritian government, noble as it may seem superficially,must be fully dissected to see the positives and the negatives it presents to the local people of Mauritius. Will it improve the country's image or damage it? Especially the perception that Mauritius is now a haven for tax evasion.