IRS development of a Freehold land
Step 1- Local authorities
Once the land has been identified, local authorities have to be consulted to check whether the land is developable and whether the said activity can be conducted in that area.
Step 2 – Pre-sale agreement with present land owner
In case the promoter of the project has to purchase the land, an official pre-sale agreement with the present land owner has to be drafted.
Step 3 - Land conversion permit
A land conversion permit is required whenever a hotel is being developed on agricultural land. Hotel development is exempted from the land conversion tax and for the purpose of obtaining the land conversion permit, an application must be submitted to the Ministry of Agro Industry and Food Security.
The application for the land conversion permit can be made along with the application for the IRS Certificate.
Step 4 - Application for acquisition of immovable property by a non citizen
Under the Non-Citizen Property Restriction Act, a non-citizen wishing to hold or purchase or acquire property in Mauritius must get the necessary approval to acquire the property. Approvals are provided either by the Prime Minister’s Office or the Board of Investment, as may be the case:
The application for a non-citizen to purchase land can be made after the Letter of Approval from BOI has been received.
Once the authorisation has been obtained, the purchase of the land can be finalised.
IRS Development on State Land
Industrial leases of State lands can be granted for the following components of an IRS project:
- Construction of IRS common facilities:-
Any promoter willing to have lease over state land for IRS project, should submit an application to the Ministry of Housing and Lands, with copy to the Ministry of Tourism & Leisure and the Board of Investment. Along with the application, the project write-up including, among others, the following information:-
- Profile & Shareholding structure of promoting company/promoters
- Proven track record of applicant/promoter
- Room capacity (capacity of at least 100 rooms is given priority)
- Four to five star type of hotel development in line with the tourism strategy
- Project value (priority to project with FDI above Rs 500 million)
- Social components (over and above mandatory financial contribution to the Tourism Fund)
Upon approval, a Reservation Letter will be issued to the promoter subject to the following conditions:
- the reservation is for a period of six months;
- a cash deposit, to be determined by the Ministry be made within a period of one month as from date of the letter;
- submission of three copies of the preliminary plans within a period of three months as from date of the reservation letter
Letter of Intent
When the above conditions have been met, a Letter of Intent containing all the conditions and rent payable , is issued to the promoter. Upon acceptance of the offer, the payment of the rent and the survey fee, a lease agreement is drawn up.
General conditions of a Lease Agreement
- Industrial leases are now granted for a period of 60 years;
- Submission of two detailed plans the Ministry for final planning clearance. Wherever applicable, the plan should comply with a minimum building setback of 30m from the High Water Mark and with other relevant guidelines for portion one of the Coastal Zone;
- the conditions of the EIA should be complied with;
- the sewerage treatment plant should have a minimum setback of five metres (5m) from the common access road;
- the Lessee shall obtain all necessary permits and clearances from all relevant authorities before starting construction of the buildings or structures on the land leased;
- before construction of any building or structure, the lessee shall obtain the prior approval of the lessor on the plan;
- should the lessee fail to complete the development of the land leased according to plans approved by the lessor within the specified period of time, the lessor reserves the right to resume possession of the whole or any part of the land leased without payment of any compensation, on giving the lessee three months' notice to that effect;
- any delay in the obtention of permits and clearances referred to at Para (iv) shall not entitle the lessee to any extension in the period granted for the start of the construction;
- the Lessee shall dispose of all solid and liquid wastes in such manner as not to pollute the air or water and not to cause any nuisance to the satisfaction of the appropriate authorities;
- if applicable any beach reprofiling works, clearing of the lagoon, construction of jetty or timber deck on the beach fronting the hotel site should be subject to a new E.I.A;
- the public shall have free and unimpeded access along the beach at all times; and
- the cash deposit which has been effected by the promoter during the reservation period is refunded to the Lessee once the project becomes operational;
- social obligation clauses well defined with specified dates; (New condition)
- social reporting, 1 year from the date lease is signed.(New condition)
Pledging of rights
Pledging is granted for development for which the lease has been granted and is subject to the following criteria:
- any lessee is entitled to pledge his/her leasehold rights subject to 'a droit de regard' from the lessor with particular to the contractual relationship with the lessee;
- the purpose of the loan must be clearly stated and be related to the development of the site leased and/or connected to the full-time professional/business/economic activities of the lessee;
- loans must be taken from known lending institutions and a statement from the latter to that effect must be produced;
- there should be no arrears on the lessee's rent account and rent for the current financial year should be fully paid;
- no infringement or encroachment or unauthorised construction whatsoever has been committed on the site;
- the consent of all other creditors, if any, has been obtained;
- the lease is in order; and
- plans to be submitted for approval if the development is to be carried out on the site leased.
However, the pledging of leasehold rights is not granted for the following cases:
- the repayment of debts other than those as per paragraph 10.2 above contracted by the lessee or of any loan contracted by a third party; and
- loans taken from private individuals or non-lending institutions.