A trust is a legal arrangement between a settlor and a trustee.  In forming a trust, the settlor issues a letter of wishes setting out the manner in which he wishes the beneficiaries he has appointed to benefit from a trust.  The settlor transfers property or assets in the trust which the appointed trustee administers in accordance with a trust deed or trust instrument for the benefit of the beneficiaries.

The trust deed or trust instrument is a document in writing and it outlines, the trustee’s responsibilities, powers and duties of the trustee.  It also sets out the mechanisms through which the beneficiaries can benefit from the trust.   The Trusts Act 2001 serves as the principal legislation governing trusts in Mauritius.

It is essential to understand that in establishing a trust, the settlor relinquishes  legal ownership of the assets transferring them to the trustee who manages them for the beneficiaries benefit.   Consequently the trustee assumes control over the assets   while the settlor cannot intervene or infringe upon the trustee’s duties aligning with the principle "donner et retenir ne vaut rien". Any interference with the  trustee’s administration risks rendering the trust invalid, as it may be deemed a  sham and thus unenforceable.

Reasons for establishing trusts

A trust is a very useful tool utilized by high net worth individuals and family offices for various purposes:

Succession planning: A settlor having achieved a successful family business may aspire to ensure its continuity across generations.By establishing a trust, the settlor can safeguard assets and business interests facilitating financial security and opportunities for family members while managing family wealth for future generations.Through a trust structure, beneficial ownership interests can seamlessly transfer upon the settlor’s death. Additionally, the discretionary nature of beneficial interests within a trust can mitigate the imposition of stamp duty or inheritance tax liabilities which may otherwise arise.  Furthermore, trusts can be instrumental in holding shares in companies that own immovable property situated outside Mauritius.  This arrangement effectively alters the characterization of the interest from immovable to movable offering for tax optimization and financial planning.

Estate planning: Trusts offer a strategic approach to preserving continuity of asset ownership, particularly in the case of family businesses. By vesting legal ownership of assets to a trustee, the designated beneficiaries can continue to derive benefits from these assets preventing fragmentation of ownership across generations.   Through the utilization of trust, the risks of assets falling outside the family’s ownership upon a beneficiary’s demise is mitigated. Consequently, settled assets can be preserved for the benefit of future generations.


Protective trusts: A settlor can provide for protection of vulnerable members of a family or certain beneficiaries who may exhibit extravagant or spendthrift tendencies.


Asset protection: Trusts have often been used for the purpose of protecting assets from various risks. Thus, in contemporary settings, trusts serve as a reliable vehicle for holding assets within stable political environments. They act as a protective barrier guarding assets against potential liabilities that may arise for the settlor or beneficiary including punitive financial claims stemming from  marital disputes. 

Moreover, trusts offer a defence mechanism against strategic risks such as confiscation or expropriation by the State in the country of the Settlor’s country of domicile or nationality.

Forced heirship: When a settlor transfers assets into a trust during his lifetime, those assets are not considered part of the settlor’s estate upon his death. This strategic move can help the settlor to circumvent forced heirship rules which may be mandatory under the laws of his domicile, residence or nationality.  Such rules typically dictate that the specific individuals and proportions to which the settlor’s estate must be distributed.   


Charitable and Philanthropic purposes: Many settlors who have achieved success harbour a personal interest in philanthropy during their lifetime .Trusts offer a versatile platform for establishing private charitable or philanthropic endeavours through exclusively charitable trusts or non-charitable purpose trusts.These structures serve an effective means for pursuing a diverse range of philanthropic objectives.


Confidentiality: Trusts are generally established through a private document involving  the settlor and the trustees.  Unlike other legal entities, the trust instrument does not require filing with any public body or authority in Mauritius. As a result, all information pertaining to a trust remain inaccessible to the general public, ensuring confidentiality.

Why set up a trust in Mauritius?

• Mauritius has successfully established itself as a reliable financial services centre since its launch over  30  years ago;
• The country boasts political stability and reputed for its ease of doing business by international agencies such as the World Bank;
• The jurisdiction has talented professionals and service providers to provide quality service at a cost effective rate;
• The jurisdiction is OECD white-listed and has adopted the Financial Action Task Force recommendations in its legislations to combat money laundering and terrorism;
• The applicable tax rate to residents in Mauritius is 15 %;
• The Trusts Act 2001 provides for the proper law of a trust to be moved to another jurisdiction and this is a flexibility which is available to a settlor;
• Under the Trusts Act 2001, a trust can have a Managing trustee in Mauritius and a custodian trustee in another jurisdiction;
• Our legislation also provides for the appointment of a protector who can exercise a supervisory role over the activities of the trustee and with powers to appoint or remove the trustee, withholding consent form specified actions of the trustee amongst others.

Forms of trusts available in Mauritius

Discretionary trust: Under the terms of a discretionary trust, the trustee is given wide discretionary powers as to when, how much and to which beneficiaries he should distribute the income and capital of the trust. Such a form of trust is useful where at the time of creation of the trust, the future needs of the beneficiaries cannot be accurately determined. The beneficiaries only have a right to be considered to benefit when the trustee exercises his discretion.  Whilst the beneficiaries are the persons who can enforce the trust, they cannot be regarded as having any direct legal rights over any particular portion of the trust fund. 

Fixed Interest Trust: Under a fixed interest trust, the principal beneficiary will normally be granted a vested interest in the income of the trust fund throughout his lifetime and the discretion of the trustee regarding the disposition of the trust fund is fairly limited. For example, the trust deed of a fixed interest trust may specify that the trustee is required to distribute all of the income of the trust fund to a particular individual during that person’s lifetime and subsequently to distribute the capital of the trust fund in fixed proportions to named beneficiaries (such as the settlor’s children).

Purpose trust: A purpose trust is a form of trust which exists for advancing some non-charitable purpose, as for example holding an asset such as an aircraft.  Such a trust would not have beneficiaries but are under the requirement to have an enforcer in Mauritius.  A purpose trust under Mauritius law can have an unlimited life.

Charitable trust: A charitable trust can be formed for the following purposes:

• The relief of poverty
• The advancement of education
• The advancement of religion
• The protection of environment
• The advancement of human rights and fundamental freedoms
• Any other purpose beneficial to the public in general.

The charitable objects may be pursued in Mauritius or elsewhere and can be beneficial to the community in Mauritius or elsewhere.

The Trustee: A trust established under Mauritius law must at all times have a qualified trustee resident in Mauritius.  A qualified trustee under our Trusts Act is generally a management company specifically licensed by the Financial Services Commission of Mauritius to provide such service.

This briefing is for informational purposes only and should not be construed as legal advice.