Client Profile
| Detail | Info |
|---|---|
| Names | Michel & Catherine (anonymized) |
| Ages | 63 and 60 |
| Nationality | French |
| Residence | Aix-en-Provence, France |
| Situation | Michel retiring from executive role; Catherine already retired |
| Net worth | ~€2.2M |
| Composition | €800K securities, €600K assurance-vie, €500K Aix apartment, €300K cash |
| Income | Michel: pension €48K/year + portfolio income ~€30K/year |
The Problem
Michel and Catherine had always planned to retire abroad. Their concerns:
| Issue | Detail |
|---|---|
| French pension taxation | Pension taxed at progressive rates — up to 30% marginal |
| Portfolio income | 30% PFU on all investment returns |
| IFI | €2.2M total, but only real estate counts — still close to threshold |
| Inheritance exposure | Two children, €2.2M estate → significant succession taxes above allowances |
| Cost of living | Aix-en-Provence increasingly expensive for retirees |
| Climate | Wanted warmer weather year-round |
Michel asked: "We've worked our whole lives. We want to enjoy retirement without watching a third of our income go to taxes every year."
The Initial Plan: Portugal
Their first instinct was Portugal — close to France, good weather, large French expat community.
However, Portugal's NHR (Non-Habitual Resident) regime ended in 2024. Without NHR:
| Tax item | Portugal (post-NHR) | Impact |
|---|---|---|
| French pension taxation | 10% flat (if specific treaty provision applies) or progressive up to 48% | Variable |
| Portuguese investment income | Up to 28% on dividends/interest | Comparable to France |
| Succession tax | 10% stamp duty on Portuguese assets (no tax on foreign assets for direct heirs) | Better than France |
| Cost of living | Lower than France, but rising | Moderate savings |
Verdict: Without NHR, Portugal was only marginally better than France for tax purposes.
The Pivot: Mauritius
Catherine's cousin lived in Mauritius. After a 2-week visit, they fell in love with the island. And the tax situation was dramatically better.
Why Mauritius for Retirees
| Factor | France | Mauritius |
|---|---|---|
| Personal income tax | Up to 45% progressive | 15% flat (0% on first MUR 390K) |
| Tax on French pension | Up to 30% | 15% (France-Mauritius DTA: pension taxed in country of residence) |
| Tax on portfolio income | 30% PFU | 15% (or 0% on certain capital gains) |
| Capital gains tax | 30% PFU | 0% |
| Inheritance tax | Up to 45% | 0% |
| Wealth tax (IFI) | Yes (on French real estate) | No equivalent |
| Cost of living | High | 30-40% lower |
Mauritius Retirement Visa
Mauritius offers a specific visa for retirees:
| Visa type | Requirement | Validity |
|---|---|---|
| Retired Non-Citizen Permit | Transfer $1,500/month to Mauritius bank account | 10 years, renewable |
| Premium Visa | Proof of income/savings, health insurance | 1 year, renewable |
| Permanent Residence (via investment) | $375,000 property purchase in approved development | Permanent |
Michel and Catherine qualified for the Retired Non-Citizen Permit easily.
The Solution
Phase 1: Mauritius Setup (Month 1-3)
| Action | Timeline | Cost |
|---|---|---|
| Retired Non-Citizen Permit (both) | 4-6 weeks | €3,000 |
| MCB personal accounts (joint + individual) | 2 weeks | €1,500 |
| AfrAsia wealth management account | 3 weeks | €1,500 |
| Property rental (Grand Baie, 2BR villa) | 1 week | ~€14,000/year |
| Private health insurance (international) | 1 week | ~€6,000/year (both) |
Phase 2: Financial Restructuring (Month 2-4)
| Action | Detail |
|---|---|
| French pension rerouted | Paid into MCB Mauritius account (in EUR) |
| Securities portfolio | Transferred to AfrAsia wealth management |
| Assurance-vie | Maintained in Luxembourg (portable, tax-neutral on Mauritius exit) |
| Aix apartment | Decision: sell after 2 years (see below) |
Pension Taxation Under the DTA
The France-Mauritius DTA determines where pensions are taxed:
| Pension type | Taxed where? | Rate |
|---|---|---|
| Private sector pension (retraite complémentaire) | Country of residence (Mauritius) | 15% |
| State pension (retraite de base — régime général) | Country of residence (Mauritius) | 15% |
| Government pension (fonctionnaire) | Country of source (France) | French rates |
Michel's pension was entirely private sector → taxed only in Mauritius at 15%.
Financial Comparison (Annual)
| Income source | France (tax) | Mauritius (tax) | Savings |
|---|---|---|---|
| Pension €48K | ~€10,500 | €5,700 (15% after allowance) | €4,800 |
| Portfolio returns €30K | €9,000 (PFU 30%) | €4,500 (15%) | €4,500 |
| Capital gains (realized) | 30% | 0% | Variable |
| Annual tax savings | ~€9,300+ |
Cost of Living Comparison
| Item | Aix-en-Provence | Grand Baie, Mauritius | Difference |
|---|---|---|---|
| Rent (2BR, quality) | €1,500/month | €1,150/month | -€350/month |
| Groceries | €600/month | €400/month | -€200/month |
| Dining out | €400/month | €250/month | -€150/month |
| Health insurance | €300/month (mutuelle) | €500/month (international) | +€200/month |
| Utilities | €200/month | €100/month | -€100/month |
| Monthly difference | -€600/month | ||
| Annual savings | €7,200 |
Total Annual Benefit
| Category | Amount |
|---|---|
| Tax savings | €9,300 |
| Cost of living savings | €7,200 |
| Total annual benefit | €16,500 |
Over a 20-year retirement: ~€330,000 in cumulative savings — before accounting for capital gains tax elimination and inheritance tax savings.
Succession Planning Impact
This was the decisive factor for Michel and Catherine.
| Scenario | France | Mauritius |
|---|---|---|
| Estate: €2.2M, 2 children | ||
| Allowance | €100K per parent per child = €400K | N/A |
| Taxable | €1.8M | N/A |
| Tax rate | Up to 45% | 0% |
| Estimated succession tax | €400K-€500K | €0 |
By establishing Mauritius residency and progressively moving assets offshore, Michel and Catherine could pass their entire estate to their children tax-free.
Aix-en-Provence Apartment
| Option | Tax implication |
|---|---|
| Keep and rent | Rental income taxed in France at 20% + 17.2% social charges |
| Sell immediately | Capital gains tax with partial abatements (22+ years ownership) |
| Sell after 22 years of ownership | Full income tax exemption, social charges exempt after 30 years |
| Decision | Sell after reaching 22-year mark (2 years away) for maximum abatement |
Timeline
Month 0 → Engaged Private Office
Month 1-2 → Mauritius visa applications
Month 2-3 → Banking setup (MCB + AfrAsia)
Month 3 → Property rental secured in Grand Baie
Month 4 → Moved to Mauritius
Month 4 → French fiscal domicile transferred
Month 5 → Pension rerouted to MCB
Month 6 → Portfolio transferred to AfrAsia
Year 2 → Aix apartment sold (optimized timing)
Services Used
| Service | Cost |
|---|---|
| Private Office — Mauritius residency setup | Contact us |
| Banking setup (MCB + AfrAsia) | €3,000 |
| French tax advisor (departure + pension treaty) | €4,000 |
| Total | ~€12,000 |
| Payback period | ~9 months |
Key Takeaways
- Portugal without NHR is no longer the obvious retirement destination — Mauritius and UAE are stronger options
- The France-Mauritius DTA allows private pensions to be taxed at only 15% in Mauritius
- Zero inheritance tax in Mauritius is a game-changer for families with €1M+ estates
- Cost of living in Mauritius is genuinely lower — not just on paper
- The Retired Non-Citizen Permit is straightforward with only $1,500/month income requirement
- Selling French property should be timed carefully around the 22-year abatement threshold
- Health insurance is the main extra cost — international coverage is essential
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Disclaimer: Pension taxation depends on the specific DTA provisions and the nature of the pension. Government pensions (fonctionnaire) are typically taxed in France regardless. Professional advice is required.