The Mauritius Foundation is governed by the Mauritius Foundations Act 2012 and is administered and regulated by the Mauritius Registrar of Companies (ROC), described in the legislations as the Registrar of Foundations.
Key features of Mauritius Foundations:
- A Foundation is the dedication of property to an entity to be used for a specific purpose. To create a Foundation, ownership of the relevant asset is transferred to the Foundation by the founder(s) to achieve a specific purpose or purposes
- The Foundation could be set-up intervivos (by charter) or by will, could be set-up to benefit persons, or a class of persons or to carry out a purpose which may be charitable, non-charitable or both.
- A Mauritius Foundation has to be managed by a Foundation Council which should comprise of at least one member ordinarily resident in Mauritius and would require a secretary and have its registered office in Mauritius
- When a Foundation is registered, it would have separate legal personality and would need to keep proper books of accounts and keep its records in Mauritius at its registered office.
- Where the founder and all the beneficiaries of a Mauritius Foundation are non-resident (or if the Foundation is set-up for a purpose and that purpose is being carried out of Mauritius) the Foundation would be exempt from tax in Mauritius.
Name
The proposed name of a Mauritius Foundation must end with the word “Foundation” and must not include the words limited, company, partnership, societe or any abbreviations or translations thereof.
Charter
The main constitutional document of a Foundation is its Charter. The Charter of a Mauritius Foundation must contain inter alia:
- The name of the Foundation
- The name and address of the Founder(s) including an address in Mauritius for service of documents
- The object for which the Foundation has been established
- The initial assets of the Foundation, its purpose if applicable
- Details of the beneficiaries or the manner in which the beneficiaries may be appointed or removed
- Period of establishment
- Details of its secretary
- The Foundation’s registered office
The Charter shall be in writing and signed by the Founder or in case of a body corporate, by a representative of the Founder. Most Foundation jurisdictions today, require the charter to be filed and registered.
Objects of a Foundation
The objects of a Mauritius Foundation:
- May be charitable, non-charitable or both
- May be to benefit a person or a class of persons, or to carry out a specified purpose, or both
- Are according to the provisions of its charter
- Shall be valid and enforceable except where contrary to the laws of Mauritius
Foundation Council
Every Mauritius Foundation shall have a Council which shall administer the property and carry out the objects and purposes of the Foundation.
A Foundation must have a board of Councillors to manage the business and affairs of the Foundation. The Council shall consist of one or more persons (either legal/ body corporates or natural persons) known as a Councillor(s). A Council shall have at least one member who shall be resident in Mauritius. It may also be responsible for appointing new beneficiaries and determining the extent and nature of beneficial rights.
Generally, the Founder has a fair amount of flexibility to tailor the degree of responsibility of the Council to his/her needs by establishing its duties in the Charter.
Beneficiaries
A Mauritius Foundation can have one or more individuals as “beneficiary”.
A beneficiary means a person who is entitled to benefit under a Foundation; or in whose favour a power to distribute any Foundation property may be exercised.
However, in contrast to shareholders of a company or the beneficiaries of a trust, foundation beneficiaries have no legal or beneficial interest in foundation assets. That is, Foundation assets do not become the assets of a beneficiary unless distributed to the beneficiary in accordance with the Foundation’s charter or regulations.
Protector
It is permissible for a Mauritius Foundation to appoint a protector or committee of protectors in accordance with and having such powers, duties, functions and remuneration as may be specified in the charter.
The charter shall also mention the relationship of protector or committee of protectors with the Council whilst in office.
Property of Foundation
Assets transferred to or otherwise vested in a Mauritius Foundation shall -
- be the assets of the Foundation with full legal and beneficial title
- cease to be the assets of the founder or founders, once transferred to or otherwise vested in the Foundation by or on behalf of the founder or founders; and
- in the case of a Foundation with one or more beneficiaries, not become the assets of a beneficiary unless distributed to such beneficiary in accordance with the charter or regulations and the Act.
Registration of Mauritius Foundations
The Foundation’s Mauritius registered agent shall submit particulars extracted from the charter, accompanied by the registration fee set out (i.e. MUR 9,000 = USD 300) to the Registrar who shall retain and register it, if it is satisfied that all the requirements of the Act have been complied with and its objects are lawful. The Registrar shall allocate a registration number to the Foundation and issue a certificate of registration.
Annual Renewal Fees
The annual registration fee shall be due and payable not later than 20 January every year so long as the Foundation remains registered with the Registrar.
Secretary
Every Foundation shall have a secretary appointed by the Founder, with the Secretary being either a Management Company or who shall be such other person resident in Mauritius as may be authorised by the Commission.
Registered Office
A Mauritius Foundation must have a registered office situated in Mauritius to which all communications and notices shall be addressed.
Accounts
A Mauritius Foundation is required to keep proper books of account and records at its registered office. The books of account shall not be open to public inspection but shall at all times be open to inspection by the councillors, the founder, any supervisory person or the auditor of the Foundation.
The books of account should reflect the financial position of the Foundation, with respect to:
- all sums of money received, expended and distributed by the Foundation and the matters in respect of which the receipt, expenditure and distribution takes place
- all sales and purchases made by the Foundation
- the assets and liabilities of the Foundation
Register
Each Mauritius Foundation has to keep, at its registered office, a register of its councillors, any founder and any person who may have endowed assets to the Foundation as well as records and copy of documents filed with the Registrar and the minutes of proceedings of any meeting of the Council.
Tax exemptions and concessions
A Foundation of which the founder is a non-resident or which holds a Category 1 Global Business Licence under the Financial Services Act; and all the beneficiaries appointed under the terms of a charter or a will are, throughout an income year, non-resident or hold a Category 1 Global Business Licence under the Financial Services Act, shall be exempt from income tax in respect of that year.
For the purpose of the exemption specified above, any Foundation which qualifies shall deposit a declaration of non-residence for any income year with the Director-General within 3 months from the expiry of the income year.
Any distribution to a beneficiary of a Foundation shall be considered to be a dividend to the beneficiary.
Potential uses of a Mauritius Foundation
A Mauritius Foundation can be used for:
- Accumulation & Preservation of Wealth
- Succession planning
- Asset Protection
- Tax Planning
- Off balance sheet transactions
- Corporate finance/ asset financing
- Securitization
A Mauritius Foundation could also potentially be deployed as a DAO Legal Wrapper.
A Mauritius Foundation cannot be used to engage directly in commercial activities. However, only a charitable Foundation, under certain circumstances, may be subject to supervision by the Board of Investment.
Commercial activities may only be undertaken when they serve to achieve a Foundation’s non-commercial purpose or where the type and scope of the investments being held require such activity to be undertaken.
Foundations vs Trusts
- A Foundation is an independent legal person whereas a Trust is not
- A Private Foundation has to be registered or recorded (usually publicly) which is not always an obligation with a Trust.
- Assets may be held by a Foundation unlike a Trust where the assets are held by the Trustee on trust.
- Foundations generally cannot engage directly in commercial operations whereas Trusts may be used for certain commercial purposes.
- Sham issues are less likely to occur with a Foundation because of its corporate personality.
- In so far as taxation is concerned a Foundation is an entity and hence will be directly taxed where appropriate. No problem as with a Trustee accidentally becoming resident in a high taxing country.
- A Foundation will own assets in its own name which may bring comfort to the Settlor/ Founder
- The duration of a Foundation is infinite whereas many Trust jurisdictions have perpetuity periods.
PRICING
Set up price: $US2,400 (+ $400 if a Nominee Founder is required + $US800 if a Nominee Councilor is required)
Annual renewal fee from 2nd year: USD$2,400 (+ Nominees as/if required)
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.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.
