A Foundation is broadly defined as a legal entity without members and with its own organisation, the ownership of which is to achieve a certain specific purpose by means of endowment made. It comes into existence when ownership of assets is transferred to the foundation by the Founder. A Foundation enjoys legal personality which fulfills similar functions as those of a trust, but with the administrative flexibility of a company.
A Foundation could also be defined as a legally and economically independent special-purpose fund which is formed as a legal entity through the unilateral declaration of the founder. The founder allocates the specifically designated foundation assets, stipulates the purpose of the foundation, entirely non-self-serving and specifically designated, and also stipulates the beneficiaries.
The Mauritius Foundation provides a legitimate means to protect one’s assets against personal liability, high taxes, exchange controls or risk of confiscation. It could be the preferred vehicle for those from civil law jurisdictions and why not common law countries.
Foundations in Mauritius are governed by the Mauritius Foundations Act 2012 (the ‘Foundations Act’) and managed by the Foundation Council which carries out the objectives and purposes of a Foundation.
A Mauritius Foundation can elect to be non-resident by the Council filing a declaration to that effect with the Commissioner of Income Tax and be exempted from all income tax. All distribution made to non-resident beneficiaries of the Foundation are also exempt income tax.
Why a Mauritius Foundation
A Mauritius Foundation gives the Founder the requisite protection and comfort for a long-term wealth management. Family assets are preserved over generations with most tax efficiency, succession laws, forced heirship rules, probate and other hurdles are avoided.
Steps for the setting up of a Mauritius Foundation include:
Completing Mauritius Foundation Application Form
Provide KYC documents on all the parties (Founder, Protector and Beneficiaries)
Drafting and execution of the Foundation’s constitutive document – ‘the Foundation Charter’.
Filing and Registration of the Foundation Charter with the Registrar of Companies
Migration of Foundations
A Foundation established under the laws of another State may be redomiciled in Mauritius.
A Mauritius Foundation is required to be registered and issued with a certificate of registration by the Registrar of Companies.
Every Mauritius Foundation shall have a Registered Office in Mauritius to which all communications and notices shall be addressed. The Registered Office shall be the place described as such in the Foundation Charter.
The Foundation Council is the most important administrative organ of a foundation. The legal nature of a Foundation Council is one of the features that distinguish foundations from trusts and companies. Members of a Foundation Council have no personal title to a foundation’s property, either as individuals or jointly as a body, and with no personal liability in the absence of fraud or negligence for any breach of that foundation’s obligations. These features appear to make the foundation council similar to board of directors of a registered company. However, it has to be noted that foundation council members have no shareholders or equivalent body of investors to whom they are answerable and, in contrast to the position of trustees of a trust.
The Foundations Act requires every Mauritius foundation to have a foundation council to administer the property of the Foundation and carry out the objects of the Foundation. The Foundations Act further requires the foundation council to have at least one member who shall be ordinarily resident in Mauritius. Every member of the foundation council shall be appointed in accordance with the Foundation Charter.
Foundation Assets: What can be held in a Mauritius Foundation
The Foundation assets can consist of:
Real estate (commercial or residential)
Shares in companies, funds, unit trusts
Key Features of a Mauritius Foundation
Every Mauritius Foundation shall have:
A secretary which shall be a management company or be such other person resident in Mauritius as may be authorised by the Financial Services Commission.
A Registered Office in Mauritius to which all communications and notices shall be addressed and which shall constitute the address for service of legal proceedings on the Foundation.
A Foundation Council which shall administer the property of the Foundation and carry out the objects of the Foundation. A Foundation Council shall have at least one member who shall be ordinarily resident in Mauritius.
A name ending with the word “Foundation” or a word in a foreign language which has the same meaning as the word “Foundation.
A Foundation created in Mauritius allows for, inter alia:
Being recognised in all common and civil law jurisdictions
Holding assets which can be passed on from one generation to the next (estate planning)
Minimizing estate taxes or other inheritance taxes
Avoidance of forced heirship rules
Maintenance of corporate control
Separation of voting and economic benefits
Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements
Secretary and member of the Foundation Council
A Mauritius Foundation is required to have a Qualified Secretary resident in Mauritius duly regulated by the Mauritius Financial Services Commission (FSC) and a member of the Foundation Council who is ordinarily resident in Mauritius. Premier is regulated by the FSC to act as Secretary and member of the Foundation.
Premier Global Fiduciary Services DMCC has its associate company in Mauritius, Premier Financial Services Limited which is duly licenced as a Management Company and Qualified Trustee which advises how to establish Mauritius Foundation. Know more about our Mauritius Office and our Services.