Offshore: Trust
The legal framework for Trusts in Mauritius is the Trusts Act 2001, which is a simplified and flexible piece of legislation designed to suit the Settler’s wishes. This Act allows for various types of trusts such as protective or spendthrift trust, charitable trust, purpose trust, discretionary or any other type of trust.
Key Features
Anti-forced heirship rules Possibility to accumulate income for any period within the duration of the trust May apply for GBC 1 license but not for GBC 2 License Foreign trust, complying with the Mauritian Law may be registered in Mauritius Letters of wishes may originate from the settler or any beneficiary under the Trust Confidentiality as no registration is required Protector with power to appoint and dismiss trustees recognized
Requirements
Settler
The Settler shall not at any time in the trust’s duration be a resident of Mauritius. The Settler may also be a Trustee, Beneficiary, Protector or Enforcer of the Trust but shall not be the sole beneficiary of the trust.
Trustees
A maximum of FOUR trustees are allowed at any one time. At least one trustee must be 'qualified' and authorized by the FSC to act as trustee. The Trust Deed may also provide for ‘Custodian Trustee’ in whom the trust property will be vested whereas the trust will be administered by the ‘Managing Trustee’.
Beneficiaries
The beneficiary can be a natural person or a corporate body identifiable by name or by reference to a class whether or not living at the time of the creation of the trust. A settler or trustee of a trust may also be a beneficiary but shall not at any time be the sole beneficiary of the trust. Beneficiary’s interests are freely transmissible. The beneficiaries may unanimously decide to terminate the trust.
Protector
A Protector may be appointed to supervise the trustees. The Protector owes a fiduciary duty to the Beneficiaries. The Protector may also be a settler, a trustee or a beneficiary of the trust. Trust Property The trust property shall not include any movable and immovable property in Mauritius or any account in Mauritian Rupee in a domestic bank.
Asset Protection
An offshore trust will not be void if the Settler goes bankrupt but the Court can declare it void if it was made with intent to defraud creditors.
Registration
The Trust Deed must be registered with the Registrar General. The Registrar will not retain the Deed or any trust documents. Taxation Despite being registered in Mauritius, a trust can elect to be ‘resident’ or ‘non-resident’* for income tax purposes in a tax year in question. Application for Tax Residency Certificate (TRC) should be made to the Commissioner of Income Tax.
* A ‘non-resident’ trust is exempt from income tax. Non-resident beneficiaries of a 'resident' Trust are exempt from income tax on their income.
Individual resident are liable to income tax at the rate of 25% on his income. Individual resident if:
has domicile in Mauritius unless permanent abode overseas or present 183 days in a tax year or Present in a tax year and two preceding for 270 days.
Double Taxation Agreement
All trusts, which is tax resident can enjoy the benefits of the Double Taxation Agreements, which Mauritius has signed/ratified with some 32 countries. Refer to DTA Treaties.