Mauritius: Attractions For Foreigners

Mauritius is widely known for its Global Business Licence companies, Category 1 (GBL1) or 2 (GBL2), the former having access to double taxation agreements. It is a favoured route for many investors into several Asian and African countries.

In this article we will explore the possibility now open to foreigners to own residencies in Mauritius, the Mauritius Trust and the Private Trust Company.

The Integrated Resort Scheme (IRS) enables high net-worth non-citizens to acquire luxury villas of international standing in Mauritius on resorts located in unique locations with high-class amenities and facilities. These may include golf course, marina, individual swimming pool, catering, nautical and other sport facilities, all in the paradise island of Mauritius.

A minimum investment of US$ 500,000 is required, including land and construction. It will enable the acquirer, as well as his or her spouse and dependents, to obtain official residency, if required. Rental at times of non-occupancy by the owner will also be possible.

The residency status shall remain valid until such time as the non-citizen holds immovable property under the scheme. Mauritius tax laws are attractive. Individual tax rates are only 15% and there are no capital gains or inheritance taxes. Further tax planning is possible.

The Trusts Act 2001 (TA) applies to Trusts, for both residents and non-residents. A settlor may also be a trustee, a beneficiary, a protector, but shall not be the sole beneficiary of a Trust of which he is the settlor.

The Trust may provide for the office of a protector whose functions are to advise the trustee on the administration of the Trust, and with such broad powers as may be conferred, namely to remove/appoint trustees. Letter of wishes may originate from the settlor or any beneficiary under the Trust or a memoranda of the wishes of the settlor can be prepared by the trustee.

Foreign forced heirship rules do not apply to Trusts set up by non-citizens. The number of trustees shall not exceed four, of which one must be a qualified trustee in Mauritius, meaning a management company (such as AAMIL Trustees Ltd) resident in Mauritius and duly authorised by the Financial Services Commission to provide trusteeship services.

The terms of a Trust may provide for a custodian trustee who will, in such a case, work under the direction of a managing trustee. This arrangement allows certain non-delegable powers such as the formulation of the investment policy or the exercise of discretionary powers concerning the distribution of income or capital of the Trust to be reserved to the managing trustee while the custodian trustee will simply hold the trust property and act upon the instructions of the former.

Mauritian resident Trusts are taxed at 15% on their chargeable income, meaning the gross income less expenses. These can use the double taxation agreements network. However, where such a Trust deposits a declaration of non-residence within 3 months after the expiry of the income year, it shall be exempt from the payment of income tax in respect of that income year.

A Court may declare a trust void, where it is established that the Trust was made with the intent to defraud persons. Such action must be started within two years from the date of the transfer or disposal of the assets to the Trust.

There is a very strict duty of confidentiality on trustees. There is no requirement to file accounts or annual returns with the local authorities.

A Private Trust Company (PTC) is a company formed by an individual, whose purpose is to act as trustee to one or to a limited number of Trusts, for the benefit of a single family or of different branches of a family. Such a PTC cannot act as trustee by way of business, i.e. to the public in general.

The administration, investment management services or investment advice required in connection with the Trusts can be outsourced to licensed service providers. Since the activity of a PTC is generally reduced to that of an investment holding company, it will operate under the form of a GBL1 or GBL2.

A major advantage of a Mauritius Private Trust Company is the possible involvement of the settlor or a family member or personal advisor on the board of the PTC. This will allow a greater degree of direct control, as compared to a standard Trust.

Besides, total confidentiality can be assured, since there is no public register of directors and shareholders of the PTC, nor mandatory registration of the individual underlying trusts.

A PTC must be incorporated through a Mauritius Licensed Management Company such as AAMIL Ltd. The Management Company is accountable towards the Financial Services Commission and responsible for the PTC’s conduct of business.

These possibilities are among the many advantages of Mauritius as an International Financial Centre. Mauritius provides the needed stability and legal protection to ensure a sound structuring of one’s assets, even spanning over several generations. AAMIL Trustees Ltd is a Trusteeship services provider. The Group also offers corporate financial, administrative and asset management services, is fully licensed and regulated. Its offices are in Port Louis (Mauritius), Geneva (Switzerland), Victoria (Seychelles) and London (United Kingdom) an it also maintains a presence in Grand Duchy (Luxembourg) and Mumbai (India).

Dr Ludovic C. VERBIST, Ph.D., TEP
Managing Director
AAMIL Ltd
www.aamil.com

The author is Managing Director of AAMIL Ltd, corporate financial services provider. The Group is also providing trustee and asset management services. The offices are in Port-Louis (Mauritius), Geneva (Switzerland), Victoria (Seychelles), London (UK), Grand-Duchy (Luxembourg) and Mumbai (India).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.