Features and Benefits of the Mauritius Trust
Catégorie : Articles
What is a Trust?
A trust comes into existence when an individual or a legal entity (the «Settlor») transfers the legal ownership of assets (the «Trust Property») to another person or persons («Trustees») to hold for the benefit of other person(s) known as the «Beneficiaries» or for a specific purpose. As a private arrangement, a trust may be created solely by a verbal agreement, but it is customary for a written document to be created (the «trust deed»). Through a «letter of wishes», the Settlor will give the Trustees guidance as to how they should administer the trust.
Trusts are best known in common law jurisdictions whilst jurisdictions which rest on the French Napoleonic Code are more familiar with the concept of foundation. There are many similarities between a trust and a foundation. The main advantage of a trust arises from the distinction between the concept of legal ownership – the Trustees – and that of beneficial ownership – the Beneficiaries. It is important for the Trustees to exercise proper control over the trust property. A Settlor who continues to exercise control over the assets of the trust by giving directions to the trustees may be a cause of invalidation of the trust.
The Mauritius Trust
Trusts in Mauritius are governed by the Mauritius Trusts Act 2001 which allows for the creation of discretionary trusts, employee benefit trusts, charitable trusts and purpose trusts:
A Mauritius trust can only be created by an instrument in writing, the trust deed which sets out its object, subject, intention and the duties and powers of the trustees. A Mauritius trust can be formed by a resident or non-resident of Mauritius. It is not mandatory to register a trust in Mauritius. The Trusts Act allows for the appointment of a «Protector», who owes fiduciary duty to the Beneficiaries. If need be, the Protector can remove a Trustee and proceed to appoint a new or additional Trustees.
Main features of the Mauritius Trust
- A maximum of four Trustees can be appointed, provided that one of the Trustees is a qualified Trustee licensed by the Financial Services Commission (FSC). Nexus Global Financial Services Limited is licensed by the FSC to act as Trustee.
- The terms of the trust can also provide for the appointment of a Custodian Trustee and a Managing Trustee. The Custodian Trustee shall have the sole function of holding the trust assets and these assets shall be managed by the Managing Trustee.
- The Settlor can be one of the beneficiaries of the trust.
- Trusts can migrate to and from Mauritius.
- The Trust may elect to be non-resident for tax purposes in Mauritius if none of the Settlor(s), Trustee(s) [except for the qualified trustee] and the Beneficiaries are resident in Mauritius for tax purposes.
- Trusts can apply for a Global Business Licence and benefit from Double Taxation Treaties which Mauritius has ratified. This can be beneficial when undertaking investments in treaty countries or when making distributions to residents of these treaty countries.
Assets held in a Mauritius Trust
A Mauritius Trust can hold most types of assets including:
- Bankable assets (i.e., cash, bonds, securities, etc.)
- Real estate (commercial or residential)
- Shares and stocks in both listed and private companies
- Insurance policies
Advantages of the Mauritius Trust
The Mauritius Trust is an interesting component of the offering of the Mauritius jurisdiction, especially to entrepreneurs and business owners on the African continent concerned about the passing on of their personal and business assets to the future generations. Used in conjunction with a Global Business Licence company, the Mauritius Trust can serve as an efficient wealth planning instrument.
Would you want to know more about the Mauritius Trust? Do not hesitate to get in touch with us.