Estate planning in Mauritius

Trust

Mauritius is known as a gateway for structuring investments into India and Africa. But did you know that it can also be considered as a leading jurisdiction for wealth planning services for High Net Worth Individuals in the region? A considerable amount of High Net Worth Individuals uses a Mauritius Trust for estate planning and family office services.

The first Mauritian Trust Act (which was an improved version of the English Trustee Act, 1925) was enacted in 1989. Subsequently, the Offshore Trusts Act was enacted in 1992 in order to provide for many of the desirable features available in other offshore jurisdictions. In 2001, a new Trust Act was enacted in Mauritius. The new Act contained most of the desirable features prevailing in other offshore jurisdictions and combined these features with a number of innovative features. This paved the way for Mauritius to become an important jurisdiction for estate planning.

A Mauritius trust can be set up by both residents and non-residents and is a legitimate and effective instrument for protecting and sheltering assets. A Mauritius trust can be structured  in various types such as a fixed, purpose, charitable or protective trust.

A Mauritius trust may have a Category One Global Business Licence, which is extremely interesting for international businesspeople! A GBC 1 licence gives access to the multiple Double Taxation Avoidance Agreements concluded by Mauritius and other countries. These treaties provide for attractive lower withholding tax rates. If you would like to read more information about the GBC 1 company, have a look at the section ‘Doing business – Mauritius’.

The formal document of a Mauritius trust is the trust deed which specifies the objects of the trust as well as the duties and powers of the trustees. At least one trustee has to be a qualified trustee.

A customised solution can be created based on your personal situation (your needs and wants, the composition of your family, the country of residence of the founder and the country of residence of the beneficiaries.

Hybrid Company

A Category Two Global Business Company can be structured as a hybrid company. GBC 2 companies are not regarded as a resident of Mauritius and are not subject to corporate income tax in Mauritius. A Mauritius hybrid company offers confidentiality and a low profile because of the Mauritius image and the company status instead of a trust or foundation status.

A Mauritius GBC 2 company, structured as a hybrid company, cannot take advantage of the double tax treaties concluded by Mauritius and other countries. However, if necessary, there are legal ways to ensure that the benefits of the double tax treaties can be enjoyed indirectly.

For more detailed information about a GBC 2 company, have a look at the section ‘Doing business – Mauritius’.

Foundation

The Mauritius Foundations Bill, enacted in 2012, offers a dynamic and attractive foundation type. It promotes Mauritius as a platform for estate planning and wealth management services. The Mauritius foundation is a perfect vehicle for:

·         High Net Worth Individuals in the region;

·         International businesspeople who want to claim tax treaty benefits (very interesting!);

·         People who are unfamiliar with the trust concept.

A Mauritius foundation must have a charter stipulating the particulars of the founder(s), the beneficiaries, the objects of the foundation and the endowment of property which shall be the initial assets of the foundation. There is no prescribed minimum capital for assets initially endowed. The foundation must also have a council for the daily management.

The foundation has an obligation to maintain proper accounting records, financial documents and records of council meetings in Mauritius for a period of at least 7 years, which is in line with the OECD’s requirements on transparency and access to information.

Taxation wise, a Mauritius foundation can apply for a GBC 1 license in order to have access to the beneficial double tax treaties concluded by Mauritius and its treaty partners. Moreover, it is perfectly possible to structure a Mauritius foundation for foreigners (the founder and the beneficiaries) which will be completely tax exempt in Mauritius.

Do you want to know if the Mauritius foundation could suit your personal and family needs? Do you want to know if the Mauritius foundation could help you minimise your taxes and protect your family assets? Contact us, we would be pleased to analyse your family situation and propose a suitable structure which will protect your assets and which will help you and your family to save taxes.

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