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Mauritius Trusts In Wealth Planning and Cross Border Transactions

August 2009

The Mauritius Trust Act 2001 is based on the English common law trust model and provides for the setting up of private trusts (whether discretionary or fixed interest), charitable trusts, non-charitable purpose trusts (which must be certain, reasonable and lawful) and commercial trusts (e.g. pension and employee benefit trusts). All trusts must be created by written instrument. All trusts are limited to a maximum perpetuity period of 99 years, except for charitable trusts, which may be of perpetual duration, and non-charitable purpose trusts, which are limited to 25 years.

A Mauritius Offshore Trust is a trust of which (i) the settlor is not resident in Mauritius, (ii) none of the assets are Mauritius real estate, and (iii) at least one trustee is resident in Mauritius (the trustee can be an individual, a Mauritius offshore management company duly authorized by the Mauritius Financial Services Commission or an offshore bank in Mauritius).

One of the distinguishing features of Mauritius is its interesting taxation treaty network which allows Mauritius to serve as a gateway for African and Asian investments.

Singapore, Cyprus, and India all have taxation treaties with Mauritius which are appealing to European and North American Investors. For trusts it is necessary under every double tax agreement (“DTA”) to satisfy two requirements: one that the trustee is aresidentof the residence country, and secondly that the recipient should be a beneficial owner.

Also, confidentiality is guaranteed by the Trust Act. Trustees are not required to disclose any confidential information to any person not legally entitled to it. Nor can they be required to produce or divulge that confidential information to any Court, tribunal, committee of enquiry or other authority in Mauritius or elsewhere except where ordered by the court in accordance with the Law.

 

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