Foundation in Mauritius: ideal structure for private wealth management
What is a Foundation?
With the Foundation Act 2012, Mauritius added Foundations to its list of wealth management structures available to choose from.
A Foundation is a legal entity that combines the features of a Trust and a Company. Its legal structure and functions are similar to those of a Trust, but is administered as a Company. Foundations are interesting to clients who may be unfamiliar with the concept of Trusts, particularly in civil law countries.
Mauritius Foundations can be used for:
- Charitable non charitable causes;
- Estate planning and succession planning;
- Asset Protection;
- Private wealth management;
- Asset holding;
- Tax planning;
- Pension schemes; and
- Housing intellectual property.
The Mauritius Foundation can opt to have a separate legal personality thus having a certificate of registration and hold assets in its own name. A Mauritius Foundation enjoying a legal personality can also carry out all functionalities of an incorporated institution.
Why choose to set up a Mauritius Foundation?
Mauritius is one of the best jurisdictions for corporate as well as personal structuring in Africa. Indeed, the country ranks 1st on the continent for ease of doing business, is an internationally compliant, cost-effective, and transparent jurisdiction, ideal for private wealth management.
Mauritius Foundations may apply for a Global Business licence if they want to fall under the supervision of the Financial Services Commission (FSC) and become tax resident. Holding a Global Business Licence for a Foundation may entitle the latter to benefit from an 80% Partial Exemption Regime. It therefore has access to the wide network of Double Tax Agreements (DTA) and Investment Promotion and Protection Agreements (IPPA) Mauritius has with other countries.
Other advantages of setting up a Mauritius Foundation include:
- Exempt from tax:
- if the Founder and all Beneficiaries are non-resident; or
- if the objective of the Foundation is being carried outside of Mauritius.
- is acquired by depositing a declaration of non-residence with the Director-General of the Mauritius Revenue Authority within three months of the expiry of the income year;
- Charitable Foundations are automatically tax exempted;
- Benefit from the network of DTA through tax-resident status;
- Foundations currently set up in other jurisdictions can re-domicile to Mauritius;
- A Mauritius Foundation can also re-domicile elsewhere;
- Members of the Foundation council are not liable to the Beneficiaries.
- Relocate to Mauritius: the ideal place to live and do business
- Setting up a company and doing business in Mauritius
- The Mauritius Trust: a powerful tool for wealth structuring and succession planning
Uses of a Mauritius Foundation
A Foundation may be used for:
- Charitable non charitable (commercial) purposes, or both – many jurisdictions do not allow Foundations that have commercial objectives to operate; and
- The benefit of a person or a class of persons, to carry out a purpose, or both.
Mauritius Foundations are an alternative to Trusts and Private Trust Companies for High-Net-Worth clients willing to stay in charge of their assets while decreasing the annual cost of their structures. Foundations are not liable to tax in Mauritius in case:
- the Founder is a non-resident and
- the Beneficiaries / Beneficiary are non-resident
A Foundation is one of the preferred private structures used by High Net-Worth Individuals to cater for their succession planning and inheritance planning, private wealth management, limited liability status and asset-holding strategies. Setting up a Mauritius Foundation, a reputable offshore jurisdiction, can provide numerous advantages to a Founder as well as Beneficiaries.
A visual representation of the various parties’ involvement in Mauritius Foundations
How we can help you in setting up your Mauritius Foundation
Sunibel Corporate Services Ltd forms part of a growing network of partners, originating from Switzerland with over 40 years of experience, operating in the fields of business and finance at international level. As a Management Company, we can accompany you in setting up your Mauritius Foundation. Our services include:
- Understanding your needs if the establishment of a Mauritius Foundation is right for you;
- Provision of Members of the Council;
- Drafting of Foundation Charter and other related documents;
- Provision of accounting and tax compliance services; and
- Provision of qualified Company Secretary services.
A few key definitions
Every Foundation require a Council. The Council allocates the assets of the Foundation and performs the tasks required. The Council has the power to delegate functions to officers it assigns, based on the Charter. The Council needs to have a minimum of one member who resides in Mauritius.
The Charter of a Mauritius Foundation is a set of rules and regulations that it has to abide by. It must contain information such as the name of the Foundation, its registered office, information relating to the Founder, Beneficiaries (if any), amongst others.
A Founder is a person who empowers a Foundation with its initial assets. However, an individual who endows assets in a Foundation after the latter’s registration does not declare that specific individual as the Founder unless otherwise stated by the Charter or Articles of the Foundation. A Founder can also be a Beneficiary and has no obligation to reside in Mauritius.
A Foundation can have one or more individuals as Beneficiary, who is subjected to benefit from a Foundation. As such, the right to distribute any Foundation property may be effectuated on behalf of a Beneficiary.
Every Foundation is required to have a Secretary. A Secretary can be a Management Company like Sunibel Corporate Services Ltd or an individual ordinarily resident in Mauritius as per the rules of the FSC.
According to the provisions of the Charter, the Council can in a case to case basis have Articles relating to distribution of assets, identification of any initial or additional Beneficiaries, and how the Council provisions needs to be coordinated.
A Protector or a Committee of Protectors can be appointed by a Foundation conforming to the responsibilities, rights, functions and remuneration as may be declared in the Charter. The Charter should also highlight the relationship of Protector or Committee of Protectors with the Council whilst in office.
This article is provided for information purposes only. It is not intended to provide, and should not be used for, tax or legal advice. We may put you in contact with tax and legal advisers in this regard.
Although all information and opinions contained herein have been compiled from sources believed to be reliable and trustworthy, no representation or warranty, express or implied, is made as to their accuracy or completeness, and, to the extent permitted by law, Sunibel Corporate Services Ltd, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in the article or for any decision based on it. You should not act upon the information contained in this publication without obtaining specific professional advice.
Sunibel Corporate Services Ltd accepts no liability for any direct or indirect damage resulting from the use and reliance on the information published in this article.
For more information, please see our terms and conditions.