The legal framework for Trusts is contained in the Trust Act 2001. Various types of Trusts may be set up in Mauritius such as charitable, discretionary, purpose and trading trusts although the most common form of trust is the discretionary trust. Flexibility is provided under the Trust Act in determining the applicable governing law.
Some Key features of Mauritius Trusts |
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A trust can be tax resident or tax exempt. Tax resident trusts can access DTAs; |
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There can be up to 4 trustees but at least one must be a qualified trustee resident in Mauritius; |
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A trust shall not be voidable in the event of the settlor’s bankruptcy or as a result of action by creditors subject to certain safeguards against abuse if the intent was to defraud; |
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The Court will not enforce a foreign judgment against a trust in respect of forced heirship or marital disputes |
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There is the ability, but not a requirement, to publicly register a trust. |
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Innovative features of Mauritius Trusts |
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Letters of wishes may originate from the Settlor or any beneficiary under the Trust; |
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The Trust may provide for the appointment of any person as a managing trustee who is entrusted with the management without being vested with the Trust property, which is vested in a custodian trustee. The custodian trustee may be a firm, a body corporate which shall hold the trust property and invest its funds and dispose of its assets only under the direction of the managing trustee. |
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Many trustees in more mature trust jurisdictions have used this dual mechanism to effectively “outsource” the management of trusts to a lower cost jurisdiction like Mauritius whilst retaining legal title to the assets. The law in Mauritius recognizes foreign trusts, hence a Jersey trust could have a management trustee appointed in Mauritius for this purpose.
A trust is a highly effective way of organising personal and business affairs and the potential benefits include: |
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Tax mitigation |
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Avoid forced heirship rules, |
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Maintaining privacy |
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Estate and inheritance planning |
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Asset preservation |
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Protection of the weak and vulnerable |
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