Overview

 

A Trust comes into existence when an individual or a legal entity (Settlor) gratuitously transfers the legal ownership of assets (Trust Property) to another person or persons (Trustees) to hold for the benefit of other person(s) termed as the Beneficiaries or for a specific purpose. The Trustees have an equitable obligation, which bind them to hold and deal with the trust property in accordance with the terms of the trust.

The Mauritian Trust provides a legitimate means to protect one’s assets against personal liability, high taxes, exchange controls or risk of confiscation. Confidentiality is ensured through the absence of non-disclosure requirements as regards the Settlor or Beneficiary.

Trusts in Mauritius are governed by the Mauritius Trusts Act 2001, which allows for life interest / contingent interest trust, protective or discretionary trust, employee benefit trust, charitable trust, purpose trust or foreign trust.
 

Taxation

 

A Mauritius Trust can elect to be non-resident by the Trustee 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 Trust are also exempt income tax.

Why a Mauritius Trust

 

A Mauritius Trust gives the Settlor the requisite protection and comfort for a long-term wealth management under the Trust. Family assets are preserved over generations with most tax efficiency, succession laws, forced heirship rules, probate and other hurdles are avoided. Once a Trust is set up it can own companies to own and manage any family business or wealth.

Steps for the setting up of a Mauritius Trust include:

 

• Completing Trust Application Form

• Provide KYC documents on all the parties (Settlor, Protector and Beneficiaries)

• Execution of Trust Deed (This can be by way of either a Settlement or Declaration of Trust)

• A Settlement is where both the Trustee’s and Settlor’s names are mentioned in the Trust Deed

• A Declaration of Trust is where only the Trustee’s name is mentioned.

• Transfer of the Initial Trust Fund to the Trustee

 

Trust Migration

 

Trusts can migrate to and from Mauritius. For example Trusts in Jersey, Guernsey or Isle of Man and other jurisdictions can migrate to Mauritius and vice versa. The tendency over the last 5 years has been for trust to migrate to Mauritius because of various benefits.

Trust Registration & Confidentiality

 

A Mauritius Trust is not required to be registered anywhere thus providing confidentiality. A Trustee may register the Trust with the Registrar General to receive a “date certaine” which is registering the date of creation of the Trust.
 

Trust Assets: What can be held in a Mauritius Trust

 

Mauritius Trust assets can consist of:

• Real estate (commercial or residential)

• Shares in companies, funds, unit trusts

• Investments

• Insurance policies

• Other assets

 

Protector

 

Under the Mauritius Trust Act, a Protector can also be appointed to oversee certain decisions of the Trustee. The powers of a Protector are not prescriptive but will vary on the particular circumstances.

key features of Mauritius Trust

 

• Choice of proper law by the Settlor.

• Possibility for the Settlor to leave on or before his death letters of wishes setting out how he/she would wish the trust to be administered

• Anti-forced heirship rules

• Recognition of Purpose Trusts

• Duration of other Trusts limited to 99 years or less

• Possibility to accumulate income for any period during the duration of the trust

• No perpetuity rules for Charitable Trusts

• Trust instrument may contain power to vary terms of trust

• No disclosure of the trustees’ deliberations, the name of the Settlors and the Beneficiaries unless the latter is a Mauritian resident or a body corporate resident in Mauritius

• Trusts not being void or voidable due to the insolvency of Settlor or proceedings against him or latter being declared bankrupt. However, such trust may be void if the creditors prove beyond reasonable doubt that the intention of the Settlor at the time of the creating the trust was to defraud him. The onus of proof rests on the creditor and no request for setting aside the trust will be entertained after more than 2 years from the transfer or disposal to the trust

• Trust can apply for a Global Business Licence – Category 1 and benefit from double taxation treaties.

 

A Trust created in Mauritius allows for, inter alia:

 

• Restrictions / controls over the enjoyment of property

• Multiple enjoyment or consolidation of ownership

• The holding, protecting and controlling of family wealth

• Asset protection against political, family or economic uncertainable

• Commercial transactions

• Overseas ownership of property while retaining beneficial enjoyment

• Strict confidentiality of the identity of the settlor, the beneficiaries and information relating to trust affairs

• Minimizing estate taxes or other inheritance taxes

 

Qualified Trustee

 

A Mauritius Trust is required to have a Qualified Trustee resident in Mauritius duly regulated by the Mauritius Financial Services Commission (FSC).

 

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 Trust. Know more about our Mauritius Office and our Services.