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Fri, 3 Jul 2026 08:48:00 GMT

German Exit Tax Explained – What Every Entrepreneur Should Know Before Moving to Mauritius

Mauritius has become one of the world's most attractive destinations for entrepreneurs, international investors and business owners looking for political stability, an excellent lifestyle and a competitive business environment.

However, for German entrepreneurs, relocating to Mauritius is about much more than buying property, applying for a Residence Permit or opening a company.

One of the most important subjects should always be addressed before relocation begins:

Germany's Exit Tax.

It is one of the most frequently overlooked aspects of international relocation planning—and one that can have significant financial consequences if ignored.

Why German Entrepreneurs Should Understand the Exit Tax

Many people assume taxes only become relevant after selling a business.

German tax law can work differently.

Under certain circumstances, Germany may treat company shares as if they had been sold—even when the owner still keeps every single share.

No actual sale.

No purchase price.

No cash received.

Yet taxation may still arise.

This concept surprises many entrepreneurs planning to move abroad.

What Is the German Exit Tax?

The German Exit Tax is designed to preserve Germany's taxation rights over unrealised capital gains when certain taxpayers leave the country.

If an individual holding qualifying shares in a corporation transfers their tax residence abroad, German tax law may assume a fictitious disposal of those shares.

The tax is therefore based on an unrealised gain rather than on an actual transaction.

For entrepreneurs with successful businesses, this can become one of the most important financial aspects of international relocation.

Who Should Pay Particular Attention?

The Exit Tax is particularly relevant for:

founders

GmbH shareholders

startup entrepreneurs

family business owners

holding company shareholders

investors with significant corporate interests

international business owners

high-net-worth individuals

Employees without qualifying company participations are generally affected much less frequently.

Nevertheless, every relocation should begin with a professional tax review.

Mauritius Is Outside the European Union

Mauritius offers many advantages for internationally mobile entrepreneurs.

However, it is important to understand that Mauritius is not part of the European Union.

For German taxpayers this means relocation planning requires careful analysis under German tax law before changing tax residency.

The decision to relocate should therefore never focus solely on immigration or real estate.

Tax planning belongs at the beginning of the process.

The Most Common Mistake

Many future expatriates start their planning with exciting questions:

Where should we buy?

Which Residence Permit should we apply for?

How much does property cost?

Which international school is best?

How do we open a bank account?

These are all important questions.

But for German entrepreneurs they are usually not the first questions.

The first question should always be:

Does the German Exit Tax apply?

A Successful Relocation Starts Long Before Departure

Professional relocation planning normally includes:

reviewing shareholder structures

analysing tax residency

evaluating corporate holdings

reviewing family ownership

assessing liquidity

coordinating legal and tax advisers

understanding reporting obligations

Many optimisation opportunities only exist before relocation takes place.

Once residency has changed, planning options may become significantly more limited.

Property Is Only One Piece of the Puzzle

Buying property in Mauritius is often the most visible part of an international relocation.

In reality it is only one component.

Successful international planning combines:

immigration

residence permits

taxation

banking

wealth planning

business structuring

healthcare

insurance

succession planning

property acquisition

The strongest relocation strategies consider all of these elements together.

Double Tax Treaties Are Important—But Not Everything

Germany and Mauritius have a Double Taxation Agreement.

Many people incorrectly assume that this agreement automatically eliminates all tax issues.

It does not.

A tax treaty determines which country generally has taxing rights over certain types of income.

It does not automatically eliminate Germany's Exit Tax rules.

Both topics should therefore always be analysed separately.

Why Mauritius1331 Takes a Holistic Approach

At Mauritius1331 we do not see relocation as a property transaction.

We see it as an international life project.

That is why our advisory philosophy connects specialists across multiple disciplines:

relocation

real estate

banking

tax advisers

immigration

business formation

insurance

wealth planning

legal services

Only when these areas work together can entrepreneurs relocate with confidence.

Practical Example

Imagine a German entrepreneur who founded a successful software company many years ago.

The company has grown considerably.

The founder now wishes to relocate permanently to Mauritius.

No shares are sold.

Ownership remains unchanged.

Nevertheless, German tax law may require an Exit Tax analysis because significant unrealised gains have accumulated during the years of German tax residency.

This illustrates why tax planning should always precede relocation planning.

Before Moving to Mauritius

Entrepreneurs should review:

✓ Shareholdings

✓ Corporate valuation

✓ Family ownership

✓ Existing holding companies

✓ Tax residency

✓ Liquidity

✓ International tax planning

✓ Future dividend strategy

✓ Double taxation issues

✓ Long-term wealth planning

Conclusion

Mauritius offers extraordinary opportunities for entrepreneurs looking to expand internationally while enjoying an exceptional quality of life.

However, successful relocation begins with proper preparation.

For German entrepreneurs, understanding the German Exit Tax is often one of the first—and most important—steps.

Professional advice before relocating can help identify obligations, evaluate options and coordinate international planning with confidence.

Mauritius1331 Advisory

Mauritius1331 supports entrepreneurs, investors and internationally mobile families by connecting relocation, immigration, taxation, banking, property acquisition and business structuring into one coordinated advisory process.

Because moving abroad is not simply about changing countries.

It is about building your future correctly from day one.