Mauritian legislation allows for the creation of various types of Trusts, including fixed, discretionary, protective, purpose and charitable trusts. A Trust does not have a legal personality, unlike a company. It is a legal arrangement, or a contract between the Settlor (Founder) and the Trustee(s). The maximum duration of a normal Trust is 99 years, or shorter if expressly stipulated in the Trust Deed.

A Trust can be revoked by the Settlor if the Trust Deed expressly has a revocation clause. A Trust is often used for estate planning and is used as an alternative to a will. It is more flexible as the Trustees have discretionary powers to manage the trust, preserve assets for future generations and make distribution.

A Trust can also migrate to other jurisdiction or change its proper governing laws. The Settlor can give the Trustees a Letter of Wishes as to how he wishes the Trust be managed for distribution to the beneficiaries. The Settlor can also be a co-trustee and one of the beneficiaries. The Settlor can also appoint a Protector to act as a watchdog over the Trustees.

A Trust can elect to be resident or non-resident for tax purposes in Mauritius. If it has elected to be non-resident in Mauritius, the Trust is exempt from taxation in Mauritius. Distribution to non-resident Beneficiaries is exempt from taxation in Mauritius.

Following the enactment of the Finance Act 2021, the tax exemption available to trusts has been repealed. Grandfathering provisions however exist up to the income year ending on 31 December 2024 which allow trusts set up before 30 June 2021 to continue to benefit from the exemption.

According to Section 73A of the ITA, a company incorporated in Mauritius shall be treated as a non-resident if it is centrally managed and controlled (“CMC”) outside Mauritius.

Types of Trust in Mauritius

• Discretionary Trust: Used in wealth protection and tax planning, the Discretionary Trust gives the trustee the power to determine who are the beneficiaries and the allocation of income and capital amongst them
• Charitable Trust: A Charitable Trust is formed for purposes beneficial to the public in general (in Mauritius or another country). These include the relief of poverty, the advancement of education, the protection of the environment, or the advancement of human rights and fundamental freedoms
• Protective Trust: A Protective Trust provides for the protection of vulnerable members of a family or certain beneficiaries
• Purpose Trust: A Purpose Trust is formed for advancing non-charitable purpose, such as holding an asset such as an aircraft

A trust would have its CMC in Mauritius when:

• The trust is administered in Mauritius and a majority of the trustees are resident in Mauritius
• The settlor of the trust was resident in Mauritius at the time the instrument creating the trust was executed or at such time as the settlor adds new property to the trust and
• A majority of the beneficiaries or class of beneficiaries appointed under the terms of the trust are resident in Mauritius

Thus, a trust is non-resident if any of the following conditions are satisfied:

• The trust is administered outside Mauritius and a majority of the trustees are non-resident
• The settlor of the trust was non-resident at the time the instrument creating the trust was executed or at such time as the settlor adds new property to the trust
• A majority of the beneficiaries or class of beneficiaries appointed under the terms of the trust are non-resident

Key Features of Trusts in Mauritius

• No registration requirements
• Anti-avoidance provisions in relation to forced heirship rule.
• Trustee must be licensed by the Financial Services Commission
• A non-resident Trust is taxed on its Mauritius source income (foreign source income are exempt)
• Trusts may apply for a GBC I licence
• Confidentiality enshrined in the law
• Maximum duration of 99 years