Trust Legislation In Mauritius

Mauritius is well-known as an international financial centre with a strong legislative structure that facilitates trust establishment and management, making it tempting to individuals looking to efficiently manage their assets, writes Oliver Taylor.

These trusts, known as Mauritius trusts, allow people and organisations to benefit from the country’s favourable tax policy while also protecting assets and managing their estates. The trusts are controlled by the Mauritius Trusts Act of 2001 and can be customised to meet the specific needs of settlors, beneficiaries, or specified objectives.
 

Mauritius has rapidly emerged as a prime destination for High Net Worth Individuals (HNWIs) looking for effective asset protection, wealth management, estate planning, and investment strategies. Trust legislation in Mauritius is comprehensive and advantageous. It makes the island uniquely attractive. Investors benefit significantly from its robust legal framework and competitive financial incentives. As global financial

landscapes evolve, Mauritius continues to offer compelling reasons for wealth structuring.
 

Establishing a Mauritius trust entails hiring a licensed trustee, usually a professional firm, who is responsible for maintaining and protecting

the trust’s assets. Mauritius trust law requires numerous stakeholders in trust administration, such as a guardian, to oversee the trustee’s acts.
 

Trusts in Mauritius can be established for a variety of reasons, including estate planning, asset protection, and charitable or non-charitable purposes. Trusts provide secrecy for all parties involved, and a well￾structured Mauritius trust can result in significant benefits for asset control and financial management.
 

MAURITIUS: A PREMIER TRUST JURISDICTION

Mauritius enjoys strategic geographic positioning, political stability, economic resilience, and a transparent legal framework influenced by English Common Law and French Napoleonic Code. These factors collectively establish an ideal jurisdiction for trusts. Fiscal incentives are exceptionally appealing. Investors face no capital gains taxes, no inheritance taxes, and enjoy low property purchase taxes. Corporate and VAT rates remain consistently competitive at 15%.
 

Such favourable tax conditions are undeniably attractive to global investors. Mauritius’ regulating legislation for trusts is the Trusts Act of 2001. This Act governs trust creation and management, as well as trustee obligations. A trust in Mauritius must be articulated through a written agreement to ensure transparency and clarity in its operation. The Act does not require the registration of Mauritius trusts, allowing settlors and beneficiaries to maintain privacy. It also calls for the nomination of a ‘Protector,’ who has fiduciary responsibilities to the beneficiaries.
 

ASSET PROTECTION AND WEALTH MANAGEMENT

Mauritian trusts offer superior asset protection, shielding wealth from creditors, litigation, and other unforeseen risks. The flexible legal structure

accommodates various trust types—discretionary, fixed-interest, charitable, and purpose-specific. Tailored solutions cater precisely to diverse investor needs. Confidentiality clauses further reinforce these protections. Settlors and beneficiaries benefit from privacy except under very limited legal circumstances. The jurisdiction ensures discretion and robust protection.
 

ESTATE PLANNING AND SUCCESSION

Effective estate planning is essential, and Mauritian trusts excel in managing wealth succession. Trusts ensure precise and orderly asset transfers, aligning exactly with settlors’ intentions. Complex probate procedures are efficiently bypassed. Family wealth remains secure, management continuity is ensured, and forced heirship rules, applicable in other jurisdictions, are effectively mitigated. Mauritian trusts simplify and secure inheritance processes.
 

ADVANTAGES FOR HIGH NET WORTH INDIVIDUALS

The Mauritian government has developed a number of incentives to encourage multinational financial service providers to establish a significant

presence in Mauritius. To protect investor interests, investment advisors and fund managers are closely regulated by current enabling laws and a stringent financial services licensing system administered by the Mauritian Financial Services Commission (FSC). There has been a considerable surge in the formation of various investment advising, fund management, asset management, venture capital, and other financial services firms. Certain incentives linked with listing on the Mauritius Stock Exchange have led to many South African fund management corporations opening operations in Mauritius, as well as individual experienced financial advisors relocating to Mauritius. While South Africa has suffered from a ”brain drain” for years, Mauritius has experienced the opposite.
 

Mauritius’s advantageous fiscal regime, strong legal certainty, and sophisticated financial services infrastructure attract numerous HNWIs. These

individuals appreciate benefits including:

Zero Capital Gains Tax: Asset appreciation remains completely tax-free.

Zero Estate and Inheritance Tax: Beneficiaries inherit wealth fully intact.

Low Corporate and VAT Rates: Fixed at a competitive 15%, significantly enhancing profitability.

Double Taxation Treaties: Mauritius’s extensive treaty network significantly reduces international taxation burdens.
 

COMPARING MAURITIUS TRUSTS TO OTHER JURISDICTIONS

Compared to popular offshore jurisdictions like the Cayman Islands, Jersey, or the British Virgin Islands (BVI), Mauritius presents distinct advantages. Trust establishment and administration are notably more affordable. Mauritius maintains rigorous international regulatory standards.

Investors gain exceptional transparency and compliance reassurance. Geographically, Mauritius also provides strategic access to burgeoning African

and Asian markets. Such unique positioning attracts investors looking beyond traditional offshore jurisdictions.
 

Mauritius Trusts have special tax effects that should be carefully considered. Income tax is levied on a trust based on the settlor’s resident status at

the time of creation or asset settlement. Trusts with non-resident settlors or Global Business License holders may be eligible for an income tax

exemption.
 

Trusts having a settlor who is a resident of Mauritius at the time are liable to local income tax. Notably, the Finance (Miscellaneous Provisions)

Act 2021 eliminated the declaration of non-residence option for trust taxes, which would affect how trusts and foundations disclose their

tax residency and, perhaps, their eligibility for tax exemption.
 

Mauritius does not impose inheritance tax or estate duty, making it an ideal location for wealth structuring and succession planning. Mauritius does not levy capital gains tax, which can be very helpful for trusts dealing with investments that provide capital appreciation.
 

TRUSTS VERSUS PRIVATE COMPANIES AND FOUNDATIONS

Trusts provide specific advantages compared to private companies and foundations, particularly in asset protection, succession planning, and

confidentiality. Trusts often deliver stronger creditor protection than private companies. Additionally, they effectively manage complex

succession structures and preserve confidentiality.

Unlike private companies or foundations, trusts are typically less subject to disclosure requirements and cumbersome governance structures. Trusts remain optimal in scenarios demanding discretion, flexibility, and strong legal protections.
 

However, private companies and foundations also play vital roles, complementing trust structures effectively, especially in multi-jurisdictional wealth management contexts requiring operational asset management.
 

RECENT LEGISLATIVE DEVELOPMENTS

Mauritius regularly updates its trust legislation, enhancing its jurisdictional appeal. Recent amendments clarify residency criteria explicitly for trusts. Such clarity ensures Mauritian trusts reliably retain residency status. Mauritius continually demonstrates its commitment to aligning closely with international compliance standards while maintaining competitive investor advantages.
 

These legislative refinements strengthen Mauritius’s standing as a reliable, compliant trust jurisdiction.
 

BANKING TOURISM AND FAMILY OFFICES

Mauritius’s sophisticated banking infrastructure has also bolstered banking tourism, drawing investors seeking specialised banking alongside trust

and corporate solutions. The rapid development of family offices further underscores the jurisdiction’s attractiveness. Family offices leverage trusts

effectively to manage multi-generational wealth, providing comprehensive governance structures.
 

Mauritius’s growing reputation in this area significantly complements its broader trust and financial offerings.
 

CONTINUED LEGISLATIVE EVOLUTION

Mauritian authorities consistently refine legislation to maintain global competitiveness and compliance. Recent regulatory enhancements streamline trust establishment, ensuring transparent administration. Aligning increasingly with international AML/CFT and OECD standards,

Mauritius proactively evolves to meet global expectations. This ongoing legislative evolution underscores the jurisdiction’s commitment to

maintaining an attractive, secure, and transparent environment for international investors.
 

CONCLUSION

Mauritius’s robust trust legislation offers unmatched asset protection, effective estate planning tools, and compelling financial incentives attractive to global investors. Its strategic position, legal certainty, and transparent regulatory environment continue attracting global HNWIs seeking reliable wealth management solutions. As global wealth management requirements evolve, Mauritius consistently meets investor expectations. It remains uniquely suited for secure, discreet, and effective wealth preservation.   EG