There are exciting times at the eLan Group, we are being approached regularly for opportunities and at any one time have 30 projects on our radar which our project teams are evaluating in terms of significance and appeal. These fast changing times, especially in Southern Africa, have motivated us to broaden our horizons and really evolve in the type of product we are looking to deliver. This of course, has afforded you, our valuable members of the Investor Club, the prospect to diversify your own personal property portfolios and we trust you also find what we have in store, as exciting as we do!

As much as we diversify our portfolios and expand our business, we keep in mind that some of our main priorities are social and community development. This month sees the launch of the “Field of Dreams Pledge” through our associates, eLan Rugby Legends of South Africa (SARLA). This pledge aims to raise in excess of R4 000 000 to support the various community and social development schemes in Southern Africa. After the success of this pledge, we will be rolling this out to 6 other countries where the spirit of rugby exists. Look out for this in the next newsletter when you will be able to take part in this worthwhile initiative.

Warm regards,

CEO The eLan Group

Leading up to the launch which is scheduled to take place in the latter part of the first quarter, we’ve summarised a few FAST FACTS on the development, and the concept and benefits of the IRS Scheme…

The Integrated Resort Scheme (IRS) law, which was passed in August 2002, entitles non-Mauritian individuals or companies to purchase residential property in Mauritius. Permanent residence status is granted to the purchaser and their dependants while the permanent residency exists for the duration of ownership. The aim is to attract those who will bring their skills or entrepreneurs who will relocate their businesses to Mauritius, with its extremely favourable tax regime of a flat 15% for individuals and companies.

It is a clever strategy for South Africans who want to diversify their investment outside of South Africa because they are able to invest in property in other Southern African Development Community (SADC) countries over and above the R2-million investments allowance, and the IRS provides a dollar-denominated investment. To encourage growth in services, the government allows foreigners to work in Mauritius in five main sectors: education, health, financial services, IT and seafood.

	The investment in the IRS property must be more than US$ 500,000 (excluding taxes) or it equivalent in Euro or GB pounds sterling.
	A registration duty of US$70,000 is payable to the Registrar General
	Ownership may be registered in the name of an individual, a company registered as a foreign company (under the Mauritian Companies Act 2001) or a Mauritian domestic company
	The purchase and sale of the property is subject to the approval of the Board of Investment
	Rental of the property is permitted through the IRS company
	There is no minimum price requirement on resale of the IRS property; however, the seller must pay a minimum transfer duty of US$50,000 to the Registrar General
	Mauritius is part of SADC, thereby enabling South African residents to invest more than a ZAR 2,000,000 limit.
	There are no restrictions on the repatriation of funds following the sale of the IRS property although on the sale of an IRS property, the funds utilized from the RSA and taken out through the SADC exemption, have to repatriated, but any profits made on the sale of the property or any income generated while owning the property need not be repatriated.
	A buyer will pay no capital gains or inheritance tax in Mauritius.
	The country benefits from double taxation avoidance treaties with 32 countries

	Simple tax system
	Both companies and individuals are taxed at 15%
	No Capital Gains Tax
	No Inheritance Tax
	Tax-free Dividends
	No Wealth Tax
	Double Tax Treaty with South Africa and 32 other countries

This IRS has been tailor-made to suit the price range of the South African Market which places it in an affordability sector that has not as yet, been achieved in other IRS schemes on the island. Furthermore, Platinum Members of the eLan Investor Club will benefit from property discounts during this exclusive launch period. Sign up now if you are not already a Platinum Member. (Please note Platinum Member Upgrades are not applicable seven days prior to launch)

We currently have seven magnificent completed homes on Simbithi for sale. All homes are totally complete, and set within magnificent landscaped environments within the Eco-Estate portion of the Estate. Call our on-site sales team now to find out more about these luxury homes.

Tim Mc Hugo, a Platinum Member who lives in the United Kingdom, joined us this month for a three day trip to South Africa to visit the seven properties he has purchased with the eLan Group all through his Platinum Membership.
Being a Commercial Agent by profession, besides his current home, which is in Tatsfield, Kent, Tim and his family have never ventured into property as part of their personal financial portfolio. This was until he met Jeff Watts, and was introduced to the eLan Investor Club. “Turning 50 was a landmark for me, and I had to decide how I was going to invest the hard earned money I had made in commercial property over the past 20 years” says Tim. “Property interests me as an asset class due to the increasing capital growth, the gearing structure which is attractive to a foreign buyer, and the low deposits required. With long transfer dates, I literally sit back and watch my asset grow each month until I am ready to turn it around.”

Tim did not find raising finance in the UK too restrictive, especially on the back of the rental incomes he can derive from one or two of the properties. Furthermore, with established eLan offices in the UK, Tim felt that there was a sense of control, with this investment decision. Being a Platinum Member of the eLan Investor Club has also seen him gain in excess of R650 000 in discounts and Tim has calculated that he has made in excess of R4 000 000 hedging these purchases against current market values of each property. This has added to the trust element of the eLan Group. “In the UK, eLan has a good track record and there is a strong sense of trust with the developer. eLan is known to succeed, there is sound structure, control, security and the regulation I would need from a developer when investing abroad!” said Tim.

The Centenary, a sectional title office block situated in New Town Centre, Gateway, is coming out of the ground at a rapid rate! Quadrant 1 and 2 (which are fully sold) is currently being built; columns are in place as is the retaining wall for the basement together with the lift shaft. Building is on track and we’re soon to commence quadrant 3 and 4. There is still retail space available in these quadrants so for the best commercial office space in the most prime location on the block.
Call Andrew Thompson on 082 858 1196

In a recent article in the Compleat Golfer, John Botha perfectly sums up the experience of Simbithi Country Club…

Sites still available on the Golf Course at Simbithi start at 1 500m² for R1 000 000 with dam, sea, inland and sweeping fairways views. Call 0861 002 001 for more.

When deciding on the best way to purchase property, you must first look at your objective regarding the property and ask yourself the following questions:

1. What do I intend to do with the property? Am I buying it for a short term period or will I hold on to the property for an indefinite period of time?
2. Am I going to renovate the property and sell it to make a profit? If you do this on a regular basis, then you will be classified as a property developer and you will pay income tax of 40% on the profits and not the Capital Gains Tax (CGT) at 10% (tax rates will be dependent on your income tax rate with the maximum payable).
3. Am I buying the property for rental purposes?
4. Am I buying the property to give it to my children one day?
5. Is estate duty a concern of mine?
6. Am I concerned about asset protection?
7. Will the property be my primary residence?

As far as residential property is concerned, there are two ways in which to purchase the property: in your personal name or in a Trust.

Purchasing a property in your personal name:

Advantages:     Transfer duty is not applicable when buying directly from the developer   When buying from an existing owner, transfer duty is low: 0 - R500 000 = nil R500,000 to R1million = 5% More than R1million = 8%

Disadvantages:     As the property is in your own name, it can be attached by creditors It forms part of your personal estate and you will have to pay deathbed expenses which include Estate Duty, Capital Gains Tax and Executors Fees

Purchasing Property in a Trust:

Advantages:     The property will be protected from your creditors   It will not form part of your personal estate so you will not pay deathbed expenses

Disadvantages:     Transfer duty is at a flat rate of 8%, which is higher than if the property is purchased in your own personal name If the Trustees decide to sell the property and keep the money in the Trust, the Trust will pay 20% CGT, which is higher than the 10% you pay in your personal name

As a member of the eLan Investor Club, we’d like to invite you to a breakfast so that we can meet you and network on a more personalized level. We will be presenting on the benefits of Platinum Membership, Domaine Bonaventure and an address by Eric Ng, Mauritian economist on investment in Mauritius.

* Eric will be available for a personalized workshop after the breakfast for those who wish to know more.

One of the most rewarding benefits of being a game ranger is acquiring and experiencing a diverse range of skills, opportunities, challenges, risks and sights.

Green Living is best described as minimizing the impacts of our day to day living and has become the core focus of the eLan Group. Current planning for the new Avenol development will incorporate many aspects of environmentally friendly alternatives and the appointment of Jeremey Gibbert, a leading Green Architect, will add huge value to this project.

There are many aspects to Green Living.  It includes the impacts of a development in the local environment, the sustainability of the development, the design of the building, social needs, biodiversity, organic agricultural farming practices, energy and water savings initiatives and waste management.

We will be covering each of these topics in upcoming newsletters, but for this month, we’ll focus on Waste Management. We can easily reduce the amount of waste we produce through simple lifestyle changes:

These steps may seem small and inconsequential but will dramatically decrease the amount of waste a home generates and will also help individuals to save money. Each one of us can make a difference in improving our environment today by changing our living habits!

Should you have further suggestions on reducing waste, send an e-mail to petercoulon@elan.co.za

Directions:

This is not the first time there’s been doom and gloom. Every few years the same thing happens. We experience massive economic growth, everyone is optimistic and buying Nescafe Gold, and holiday homes, and Merc’s. The positivity gets ahead of itself and the economy overheats, and then panic sets in because the economy seems to be collapsing when in actual fact it’s simply making an adjustment back to a reasonable level.

It happened in 1989, when SA defaulted on its international loans and the stock market and Rand crashed, it happened in 1994 when the ANC took power and everyone thought war would break out, it happened in 1998 when interest rates hit 25% and you couldn’t give away your house, and it happened in 2001 when a fairly unstable guy by the name of Osama arranged for 2 Boeings to fly into the tallest buildings in New York!

On each of those occasions everyone thought it was the end of the world and that there was no light in sight. And on each occasion, believe it or not, the world did not actually end, it recovered and in fact things continued to get better.

I think 2008 will be a tough year, but I also see it as a great opportunity to seize the day whilst everyone else is whinging and get a front-seat on the inevitable boom that we’ll experience in 2009, 2010 and beyond.

Make sure you make a mental note of everything that is happening now, because it will happen again and again, and if you don’t recognize the symptoms you’ll be suckered into the same negativity, and forget to look for the opportunities.

It’s easy to be negative. Subconsciously, you WANT to be negative! Whenever you open the papers they tell you about the goriest hi-jacking and the most corrupt politicians. Why don’t they dedicate more pages to the fact that Joburg is the world’s biggest man-made forest, or to the corruption-free achievements of the vast majority of public officials? Because bad news sells. Good news is boring.

SA still has the best weather in the world! We’re lucky enough to possess a huge chunk of the world’s resources, i.e.: gold, platinum, coal, iron. The growth in India and China will continue to accelerate (India and China sign 10mil new mobile customers every month), and so will their demand for our resources. The government has already embarked on massive infrastructure projects (some of them a tad late, i.e.: electricity), and this will pump money into the economy.

We are all lucky enough to be a part of the birth of a massive and all-encompassing industry. The Internet has and will continue to change the world. The enormity of its impact is up there with the wheel, electricity, TV, telephones, and possibly man’s greatest ever invention, coffee. Not only does it open up an entirely untapped world of commerce, but it is also the ultimate disseminator of information and news. Apartheid would not have lasted 40 years if the Internet had existed! And you’re part of it!
  
So ignore the doomsayers, install a timer on your geyser, and buy Ricoffee for a couple of months.”

For more information email: alicia@ballito.net

Investor Club Manager