MAURITIUS
16471
wp-singular,page-template,page-template-full_width,page-template-full_width-php,page,page-id-16471,wp-theme-bridge,wp-child-theme-bridge-child,bridge-core-3.3.4.7,qi-blocks-1.4.8,qodef-gutenberg--no-touch,metaslider-plugin,qodef-qi--no-touch,qi-addons-for-elementor-1.9.6,qode-optimizer-1.2.2,qode-page-transition-enabled,ajax_fade,page_not_loaded,,qode_grid_1300,side_area_uncovered_from_content,qode-child-theme-ver-1.0.0,qode-theme-ver-30.8.8.7,qode-theme-bridge,qode_header_in_grid,wpb-js-composer js-comp-ver-8.7.2,vc_responsive,elementor-default,elementor-kit-15710
 

MAURITIUS

MAURITIUS – PRIVATE INTEREST FOUNDATIONS  

SYNOPSIS – Mauritius is an independent  republic located off the southeastern coast of Africa. The majority of its population are of South Asian extraction, but large African and a much smaller white population also exists. Historically, the island was successively colonised by the Dutch, French and most recently the British. However, it is the French who left the biggest cultural impact with most place names being in French and most of the population speaking a version of French on a day-to-day basis. However, it is English that dominates in business whilst the legal system is a hybrid of the French civil and the English common law systems. The island gained its independence from the UK in 1968. Today tourism is one of the key sectors, but financial services and tax planning are now also extremely important the economy. The island has a population of 1,235,000 and is 1,568 sq. miles making it a high population density jurisdiction. Economically, it is one of the most stable and wealthy countries on the African continent.

RATING 4.5 Stars  

THE FOUNDATIONS ACT, 2012 

The Foundations Act, 2012, introduced legislation very similar to that in other private interest foundation jurisdictions. As with all the other major jurisdictions, it requires that there be an initial Charter (to register the entity), a set of Regulations defining the rights and responsibilities of the beneficiaries (or classes thereof) and also of the Foundation Council and, if appropriate, protectors. What however is different and one of the reasons that it has such a high rating is that unlike most PIF’s, it can – when required – apply for a Global Business License (GBL). A GBL enables the PIF to benefit from Mauritius’s extensive double taxation treaty network which includes most of Africa, key European jurisdictions and India. Further, GBL PIF’s will benefit from the maximum corporate tax rate of 15%, the lower negotiated withholding taxes on received dividends, interest and royalties and no withholding taxes on forwarded dividends together with no inheritance or estate taxes.  Where it is not required to register for a GBL then a Mauritius PIF is Tax Free.

Some of the key benefits of PIF’s over trusts include: 

  • Foundations are considered separate legal entities both in Liechtenstein and in the UK – Under Karl Weiss Stiftung v. Rayner & Keeler Limited [1967] 1 AC 853, it was made clear that PIF’s would be considered as equivalent to limited liability companies with their own separate legal identity. However, unlike a limited liability company, a PIF is literally self-owing and operates for the benefit of its beneficiaries per its Charter and ‘Rules’ or Regulations. 
  • They have greater flexibility with founders and protectors often having the ability to determine (end) a PIF’s existence and/or amend/change its ‘Rules’, beneficiary list etc. which is not the case with most trust instruments. 

ADVANTAGES OF MAURITIAN PRIVATE INTEREST FOUNDATIONS (MPIF’s)

  • They are separate self-owning legal entities recognised in most common and civil law jurisdictions
  • They are safe and regulated entities
  • Most professionals are English speaking
  • They are Tax Free unless they elect to apply for a Global Business License (GBL)
  • Global Business License (GBL) Foundations/Companies have full Tax Treaty Access
  • Global Business License (GBL) have a maximum 15% corporate tax liability
  • MPIF’s are accepted and understood by local banks
  • Re-domiciliation of existing Foundations permitted under the ‘Continuity Principle’
  • Accounts Confidentiality – Details are beneficiaries are not shown on publicly available accounts submissions.
  • Can head corporate structures – A MPIF can own other assets and corporate entities to ensure tax treaty benefits apply ensuring tax efficiency and access to tax treaty networks.
  • Creditor, Asset & Wealth Protection – MPIF’s offer excellent asset and wealth protection with any properly transferred assets being legally owned by the LPIF and not the original donor or donors. This simple fact means that transferred assets cannot be subject to 3rd party litigation whilst distributions can be made in the most tax efficient manner.
  • Pre-Nuptial Agreement Alternative – MPIF’s can act as an alternative to pre-nuptial agreements (PNA’s). The basic fact makes them particularly attractive in countries such as the UK where PNA’s can often be set-aside or even ignored by the courts.
  • Re-domiciliation Protection – MPIF’s can be used to separate individuals from surplus assets before they become permanently resident in a jurisdiction that taxes individuals on their worldwide income/assets such as is the case in countries such as France and now, in a de facto manner, the UK.
  • Excellent Dispute Resolution mechanisms – Liechtenstein has a legal system which can service the needs of financial and tax planning clients to a standard equivalent to that in the UK.

For more information on private interest foundations and whether they may be suitable for your tax planning or protection needs please contact us for a free consultation.