Trusts and Foundations
Trusts and foundations are commonly used legal forms in Mauritius. They offer solutions for a wide range of tasks and purposes.
A trust is a very flexible vehicle and can be formed as a life interest trust, a discretionary trust, a purpose trust, a charitable trust, a protective trust or an asset protection trust.
The Trustee: The Trustees own and control the assets that are placed in the Trust. As Trustees of the
Trust they have legal ownership of the property, but they must act in the interests of the Beneficiaries.
The Trustees are required to maintain minutes concerning their decisions and other Trust documents in a safe place for future reference.
A trust can have a managing trustee in Mauritius and a custodian trustee in another jurisdiction.
A trustee can be a Private Trust Company (PTC). Usually, the PTC takes on the trusteeship of the various family trusts and act as the registered owner of their assets.
Beneficiaries: The Beneficiaries are the people whom the Settlor(s) wish to benefit from assets in the
Trust. The Trust Deed may allow for more Beneficiaries to be added subsequently. For example, you may wish to add a particular individual or you may provide that new Beneficiaries be added when they come into existence.
Protector: A trust may have a Protector.
Enforcer: A purpose trust must have an Enforcer.
- Possible exposure to inheritance tax and/or capital gains tax on surplus assets that are no longer needed
- The need to protect and preserve assets against any potential risk of bankruptcy or legal proceedings
- Retain control in dealing with forced heirship or exchange control
- The requirement to keep the ownership of a company anonymous and confidential
- Retaining income arising overseas which need not be remitted to one’s country of residence
- Segregation of assets acquired by an expatriate while working abroad who wants to protect them from the tax net of his/her home country.
The forced heirship rules of other jurisdictions will not be enforced by Courts in Mauritius.
Confidentiality: There is no register of trusts in Mauritius nor is there any need for any disclosure of beneficial owner to any authority. A trustee has a requirement under the Trust Act 2001 to keep confidential all information concerning the trust.
Under exceptional circumstances, a trustee may be required to give confidential information to authorised body or authorised persons under anti-money laundering, prevention of terrorism or prevention of corruption legislation or under the Financial Services Act 2007.
A trust is subject to corporate tax even if none of the participants is resident in Mauritius.
Until 30 June 2021, the following rule applied: a trust whose settlor and beneficiaries are either non-residents of Mauritius or have held a Global Business Licence under the Financial Services Act 2007 throughout the year of assessment may declare its non-residency, resulting in non-taxation in the relevant assessment period.
Existing trusts are grandfathered until the assessment year 2025/26.
Private – including discretionary, accumulation and maintenance, life interest and fixed interest trusts;
Corporate – including pension and employee benefit trusts;
Charitable – solely for the benefit of charitable organizations;
Purpose – trusts with no beneficiaries that are established for purposes that are certain, reasonable and possible.
Some countries (i.e. Germany) do not recognize trusts. Tax benefits may not apply when there is a sufficient linkage to Germany. However, the shielding effects in case of inheritance planning and asset protection would not be touched.
The Beneficiary is the person who is entitled to benefit under a Foundation or in whose favour a power to distribute any Foundation property may be exercised.
The Protector – A Foundation may have a Protector or Committee of Protectors appointed in accordance with the Charter of the Foundation and having such powers and duties as may be specified therein.
The Charter of a Foundation must be in writing and must specify the name of the Foundation, the particulars of the Founder, the purposes and object(s) of the Foundation, the endowment of the property which will be the initial assets of the Foundation, the beneficiary(ies), the name of the secretary and the registered address of the Foundation.
A foundation is subject to corporate tax even if none of the participants is resident in Mauritius.
Until 30 June 2021, the following rule applied: a foundation whose founder and all beneficiaries were not resident in Mauritius during the entire assessment year is exempt from taxation in the relevant assessment period. Otherwise, it is subject to the normal corporate tax rate of 15%, although in the case of a GBC licence, the concessions applicable to certain income streams or types of business are also applicable to the foundation.
Existing foundations are grandfathered until the assessment year 2025/26.
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