Mauritian Trusts

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.

Confidentiality is ensured through the absence of non-disclosure requirements as regards the settler or beneficiary.

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

The key features of a Trust are:

• Choice of proper law by the settlor
• Possibility to accumulate income for any period during the duration of the trust
• Trust instrument may contain power to vary terms of trust
• Trust can apply for a Global Business Licence - Category 1 and benefit from double taxation treaties.

Validity of Trust

A trust shall not be valid and enforceable where:

• It purports to do anything contrary to the law of a Mauritius
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• The court declares that

1. It was establish under duress, mistake or fraud
2. It is immoral
3. The settler had, at the time of its creation, no legal capacity to create such a trust
4. It has no identifiable or ascertainable beneficiary

• Where it is created for two or more purposes of which some are lawful and others are not.

Purpose Trust

A trust may be created for a purpose, notwithstanding the absence of any beneficiary.

A purpose trust shall be void and of no effect in the following cases:

• The purpose for which the trust has been created is immoral
• Where the trustee has reason to believe that a person who is appointed to enforce trust is dead, is unwilling, refuses or is unfit to act, he shall as soon as practical inform the Attorney- General in writing of the fact. On being satisfied of the inability of the enforcer, the Attorney-General shall within 90 days appoint a successor to the enforcer
• If the trust is created by a Mauritian national except where the appointment of the enforcer and his designated successor is approved by the FSC.

Immovable property in Mauritius

Unless approved by the Prime Minister under the Non-citizens (Property Restriction) Act, a non citizen is not allowed to have a beneficial interest in the transfer or vesting of an immovable property situated in Mauritius.

Taxation of Trust in Mauritius

A non-resident trust is liable to income tax at 15% if the setytlor and the beneficiaries are one of the following:

• is a purpose trust;
• holds a Category 1 or 2 Global Business Licence;
• non-residents

However, by filing a Declaration of non-residence for any income year with the Mauritius Revenue Authority within three months after the expiry of the income year, it will be exempt from income tax.

A resident trust is also liable to income tax at a rate of 15% per annum. Being liable to tax in Mauritius, a resident trust can benefit from the Mauritius tax treaty network by applying for a Tax Residence Certificate (TRC) for which various conditions need to be satisfied.

Non-resident beneficiaries of a resident or non-resident trust are tax exempt on the distributions received from the trust.

Reporting Requirements

There is no other statutory reporting requirement that need to be made for a trust with the authorities.