Foundation is a legal entity without shareholder and member but with beneficiaries
Foundation in Mauritius are governed by the Mauritius Foundations Act 2012 (the ‘Foundations Act’) and managed by the Foundation Council which carries out the objectives and purposes of a Foundation.
Foundation is a legal entity without shareholder and member but with beneficiaries. A Foundation has some common features with a Trust and a Corporate entity.
It can have varied objectives:
- Estate planning
“Mauritius Foundation Act has special features enabling foundations to provide commercial activities. As such a Foundation could be used as substitute to a Company Limited by shares.”
Key features of a Mauritius Foundation
Types of Foundation
A Foundation could be set-up to benefit persons, class of persons or to carry out a purpose which may be charitable, noncharitable or both combined.
Name of a Foundation
The name of a Foundation should end with the word “Foundation”.
Creation of a Foundation
A Foundation may be created inter-vivos or by a will. It will have a legal personality upon registration with the Registrar of Companies, which also act as the Registrar of Foundations.
It is permissible for a Foundation to appoint a protector or a committee of protectors in accordance with and having such powers, duties, functions and remuneration as may be specified in the Charter.
A Foundation can have one or more “beneficiary(ies)”. A beneficiary means a person or a class of persons, who is/are entitled to benefit under a Foundation; in whose favor a power to distribute any Foundation property may be exercised.
Management and Administration
A Foundation’s affairs in carrying out its objectives is handled by its Council, which should comprise of at least one member ordinarily resident in Mauritius. It will require a secretary in Mauritius duly licensed by the Financial Services Commission (FSC) and having its registered office in Mauritius. The records of the Foundation need to be kept at its Registered office in Mauritius.
The Foundation has to keep proper books of accounts and records at its registered office in Mauritius with no requirement for audited financial statements.
The following provide some examples of assets that can be held in a Mauritius Foundation (but not limited to):
• Real Estate properties
• Insurance policies
• Shares and stocks in both listed and private companies
• Bank deposits
• Intellectual property
• Other types of assets
In the Mauritius Income Tax Act 1995, there is a distinction between a resident Foundation and a non-resident Foundation.
A Foundation is considered to be nonresident where the founder and all the beneficiaries appointed under the terms of a charter or a will are, throughout an income year, non-resident of Mauritius.
A nonresident Foundation is exempt from taxation in Mauritius.
To qualify as per the exemption specified above, a Foundation has to file a declaration of non-residence for any income year with the Mauritius Revenue Authority (MRA) within 3 months from the end of the income year.
Advantages of a Mauritius Foundation
- Can be used to carry on or undertake any business or activity or enter into any transaction.
- Can be used to hold a wide variety of assets such as real estate, tangible assets (art, jewelry), intangible assets (copyrights, intellectual property).
- Can be used for charitable purposes (relief of poverty, advancement of education/ religion/ human rights, protection environment)
- It is an effective financial planning tool for clients who wish to maintain control of the assets.
- The founder of a Mauritian Foundation has the assurance of a long-term wealth management solution and structured succession planning.
- The assets of the family are preserved over generations with maximum tax efficiency with reference to succession laws and forced heirship rules.
- Separate legal personality so that it may enter into contracts in its own rights.
Other key benefits
- Regulatory framework – Mauritius is a well-regulated jurisdiction which fully supports international initiatives to prevent the country from being used for money laundering and terrorist financing.
- Investment protection – Mauritius has signed various Investment Promotion and Protection Agreements (IPPAs).
How Capital Horizons Ltd can help?
- Advisory services in structuring of a Foundation
- Assistance with the establishment and maintenance of a Foundation
- Preparation of a Charter
- Provision of a Foundation Secretary
- Provision of resident Council Members to act on the Foundation Council
- Provision of corporate secretarial and administration services
- Provision of accounting and tax compliance services
- Maintenance of all records and updating of legal documents and registers