Monthly Archives: September 2023

A Private Trust Company (PTC) is, essentially, a company which possesses Trustee powers and which does not conduct Trust business with the general public, its sole purpose being to act as a Trustee of a Family Trust or a group/series of related Trusts.

As long as certain criteria are fulfilled the PTC will not have to obtain a licence to carry out Trust Company business.

A PTC can be particularly useful for wealthy families who either do not wish to relinquish control to professional Trustees or where the Trust fund is to be invested in assets, which a professional trustee may be reluctant to deal with, such as works of art or family businesses.

Key features:

• The board of the PTC may consist of family members or trusted advisors. The residence of the PTC’s directors may have an impact on the underlying Trust’s tax status so professional advice is recommended. Generally, a company is classed as being resident for tax purposes in the jurisdiction where mind, management and control are exercised. Care needs to be taken to ensure that the Directors of the PTC are not deemed to be resident in a high tax jurisdiction;
• Representatives of the Trust Company business are appointed to the board to ensure appropriate governance;
• The PTC may be owned in a variety of ways such as by a Purpose Trust or a Foundation for confidentiality purposes;
• The professional service provider acts as an administrator of the structure and assists the board of the PTC with corporate governance and Trustee considerations.

Advantages:

Control – By retaining the power to appoint the directors of the PTC the Settlor, whether or not a director themselves, will experience a high degree of control over how the Trust is run. The Settlor and his/her family have an opportunity to be involved in the management, investment and disposition of the trust assets.

In Depth Knowledge – Allows family members and their advisors to bring their varied knowledge onto the Board. Particularly useful if the underlying assets are complex, high risk or part of the family business.

Succession Planning – By engaging younger family members in the management of family assets, and involving them in the decision-making process, a training program is instituted preparing the younger generation to effectively and responsibly manage wealth.

Diversity of Asset Base – Professional Trustees may be reluctant to hold certain assets therefore a PTC allows greater choice as to what investments may be made with the Trust fund.

Continuity – The administrator may change but the PTC will remain as the Trustee providing continuity of asset ownership.

OCI can assist you to incorporate a Private Trust Company in Nevis, Seychelles, BVI and the Cook Islands.

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

ocil@protonmail.com

oci@tutanota.com

oci@safe-mail.net

ociceo@hushmail.com

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

Offshore Trusts have been used for decades as high end Asset Protection vehicles.

Whilst Jurisdictions such as the Channel Islands, BVI and the Cook Islands have historically captured much of that business, with Compliance and cost in the traditional Trust jurisdictions increasing markedly in the past few years, new players are beginning to make a significant in the market place. This article examines one such offering ie the Mauritius Trust.

Mauritius Overview

Mauritius is a group of lush tropical islands in the south western Indian Ocean and is located northeast of Madagascar and some 1,000 miles southwest of Seychelles. A former French and British colony, Mauritius offers:

• A British system of law and parliament
• Political/economic stability
• A well-developed Financial Services Sector; and
• A well-educated productive bi-lingual French/English speaking workforce.

Since gaining independence from Britain in 1968 the Mauritian economy has grown steadily from one reliant on agriculture to a more diversified economy with Tourism, Financial Services and Agriculture (primarily sugar cane) as its 3 economic pillars. This has seen a resulting rise in standard of living from low to middle income delivering levels of economic and political stability which are the envy of the region.

Whilst better known as a Banking Centre (Mauritius boasts at least 3 world standard “Offshore” Banks) Mauritius offers two forms of nil tax Offshore Company ie the GBC1 ( a domestic designed to do business or hold shares in companies based in DTA Treaty partner countries) along with a cutting edge Private Foundation and Offshore Trust Product.

A Mauritius Trust gives the Settlor the requisite protection and comfort for a long term wealth management under the Trust. Family assets are preserved over generations with most tax efficiency, succession laws, forced heirship rules, probate and other hurdles are avoided. Once a Trust is set up it can own companies to own and manage any family business or wealth.

Trusts can migrate to and from Mauritius. For example Trusts in Jersey, Guernsey or Isle of Man and other jurisdictions can migrate to Mauritius and vice versa. The tendency over the last 5 years has been for trust to migrate to Mauritius because of various benefits.

Trust Registration & Confidentiality

A Mauritius Trust is not required to be registered anywhere thus providing confidentiality. A Trustee may register the Trust with the Registrar General to receive a “date certaine” which is registering the date of creation of the Trust.

Trust Assets: What can be held in a Mauritius Trust?

Mauritius Trust assets can consist of:

• Real estate (commercial or residential)
• Shares in companies, funds, unit trusts
• Investments
• Insurance policies
• Other assets

Under the Mauritius Trust Act, a Protector can also be appointed to oversee certain decisions of the Trustee. The powers of a Protector are not prescriptive but will vary on the particular circumstances.

Key features of a Mauritius Trust:

• Choice of proper law by the Settlor.
• Possibility for the Settlor to leave on or before his death letters of wishes setting out how he/she would wish the trust to be administered
• Anti-forced heirship rules
• Recognition of Purpose Trusts
• Duration of other Trusts limited to 99 years or less
• Possibility to accumulate income for any period during the duration of the trust
• No perpetuity rules for Charitable Trusts
• Trust instrument may contain power to vary terms of trust
• No disclosure of the trustees’ deliberations, the name of the Settlors and the Beneficiaries unless the latter is a Mauritian resident or a body corporate resident in Mauritius
• Trusts not being void or voidable due to the insolvency of Settlor or proceedings against him or latter being declared bankrupt. However, such trust may be void if the creditors prove beyond reasonable doubt that the intention of the Settlor at the time of the creating the trust was to defraud him. The onus of proof rests on the creditor and no request for setting aside the trust will be entertained after more than 2 years from the transfer or disposal to the trust
• Trust can apply for a Global Business Licence – Category 1 and benefit from double taxation treaties.

A Trust created in Mauritius can provide for, amongst other things:

• Restrictions / controls over the enjoyment of property
• Multiple enjoyment or consolidation of ownership
• The holding ,protecting and controlling of family wealth
• Asset protection against political, family or economic uncertainty
• Commercial transactions
• Overseas ownership of property while retaining beneficial enjoyment
• Strict confidentiality of the identity of the settlor, the beneficiaries and information relating to trust affairs
• Minimizing estate taxes or other inheritance taxes

A Mauritius Trust can elect to be non-resident by the Trustee filing a declaration to that effect with the Commissioner of Income Tax and be exempted from all income tax. All distribution made to non-resident beneficiaries of the Trust are also exempt income tax.