Trust vs Società vs Fondazione a Mauritius

A trust is not a separate legal entity under Mauritius law; it is a legal relationship in which the trustee holds and manages trust property for the benefit of the beneficiaries, pursuant to the terms of the trust deed. The trust's assets are owned by the trustee in its fiduciary capacity and are legally distinct from the trustee's own assets. There is no share capital, no register of members, and no corporate personality. The trust's existence depends on the trust deed and the trustee's acceptance of office. A company, by contrast, is a legal person separate and distinct from its shareholders and directors. Under the Companies Act 2001, a Mauritius company has perpetual succession, can hold assets in its own name, enter into contracts, sue and be sued, and conduct business as a legal entity independent of its human controllers. Shareholders hold equity interests (shares) in the company and enjoy limited liability. The company is governed by its memorandum and articles of association and the Companies Act 2001. A foundation, established under the Foundations Act 2012, is a legal entity — unlike a trust — but one that does not have shareholders. A foundation is established by a founder who contributes assets to the foundation to be held and managed by a council for specified objects or for specified beneficiaries. The foundation is governed by its charter and regulations. Unlike a company, a foundation does not distribute profits to equity holders; it applies its assets and income in accordance with its stated objects. The Mauritius foundation combines elements of both the trust (charitable or succession planning purposes) and the company (separate legal personality).

In a trust, governance rests with the trustee, who has both the power and the duty to manage the trust property in accordance with the trust deed and in the best interests of the beneficiaries. The settlor, once the trust is established, has no legal control over the trust assets (unless the trust deed reserves specific powers to the settlor, which must be carefully designed to avoid trust invalidation). A protector may be appointed to provide oversight of the trustee and to hold reserved powers. The trustee is subject to fiduciary duties enforceable by the beneficiaries. In a company, governance is exercised by the board of directors, who are appointed by and accountable to the shareholders. The shareholders retain ultimate control through their power to appoint and remove directors, amend the articles of association, and approve major transactions. Governance is highly flexible — sophisticated shareholder agreements and articles can allocate control in a wide variety of ways, including weighted voting rights, veto rights, and reserved matter approvals. This makes the company a highly adaptable vehicle for structured governance between multiple parties with competing interests. In a foundation, governance rests with the foundation council, which manages the foundation's assets and activities in accordance with the charter. The founder may reserve significant powers in the charter — including the power to revoke the foundation, amend the charter, or direct the council — making the foundation potentially more controllable by the founder than a traditional trust. A supervisor (analogous to the protector in a trust context) may be appointed to oversee the council. This degree of founder control, combined with the foundation's separate legal personality, makes it attractive for civil law clients who are uncomfortable with the common law trust concept.

A GBC (Global Business Company) in Mauritius is a tax-resident company subject to corporation tax at a rate of 15%. However, the partial exemption regime introduced under the Finance Act 2018 provides an 80% exemption on specified income streams (including dividends from foreign affiliates, foreign-source interest, royalties, and capital gains from the sale of securities), effectively reducing the applicable rate to 3% on such income. GBCs can access Mauritius's network of more than 45 double taxation avoidance agreements (DTAAs), making them efficient for cross-border investment and dividend repatriation. A Mauritius trust where the trustee is a licensed trustee, the settlor and all beneficiaries are non-resident, and the trust income is derived from outside Mauritius is generally exempt from Mauritius income tax. There is no Mauritius capital gains tax. Distributions to non-resident beneficiaries are not subject to withholding tax. The trust itself does not benefit from Mauritius DTAAs as it lacks legal personality, though trusts can be structured with underlying GBCs to access treaty benefits. A Mauritius foundation is treated as a body corporate for tax purposes. A foundation whose founder and beneficiaries are non-resident and whose income is derived from outside Mauritius may apply for a Global Business Licence and benefit from the partial exemption regime in the same manner as a GBC. Foundations can also access DTAAs where the relevant treaty partner recognises the foundation as a resident person. The foundation's tax efficiency is therefore broadly comparable to the GBC, but with the governance and succession characteristics of a foundation.

Mauritius provides a relatively high degree of privacy for all three vehicles, but the nature of that privacy differs. Trust deeds are not publicly registered in Mauritius — the FSC receives and holds trust registration information on a confidential basis, and trust documentation is not available for public inspection. The beneficial interests of trust beneficiaries are therefore not publicly disclosed, making the trust one of the most private structures available. However, the trust's beneficial ownership information is maintained in the FSC's register and is available to relevant authorities under appropriate legal processes. Companies in Mauritius are required to maintain a beneficial ownership register, and the GBC's ownership information is known to the FSC Mauritius and to the management company. While the Mauritius company register is publicly accessible for basic information (company name, directors, registered address), the beneficial ownership register is not available for general public inspection — it is accessible by competent authorities and financial intelligence units. The introduction of the Beneficial Ownership (FSC) Rules has strengthened beneficial ownership transparency in line with international standards. Foundation charters and beneficiary information are also not publicly available. The foundation's constitutive documents are held by the management company and the FSC. The degree of privacy is broadly comparable to that of the trust. Across all three vehicles, information is subject to disclosure under Mauritius's international cooperation frameworks, including the Common Reporting Standard (CRS) and FATCA, so true secrecy should not be expected or represented.

The trust is widely regarded as the most powerful succession planning tool available in Mauritius law. Because the trust assets are held by the trustee — and are not part of the settlor's estate — they pass to the beneficiaries in accordance with the trust deed, entirely outside the settlor's estate and therefore outside the scope of inheritance proceedings, forced heirship claims, and probate. This makes trusts particularly valuable for cross-border families where different members are subject to different succession laws. The Trusts Act 2001 includes a provision that Mauritius trusts are not invalid solely by reason that they are designed to defeat the forced heirship laws of the settlor's home jurisdiction, subject to certain conditions. A company provides limited succession planning benefits in isolation. Shares in the company pass in accordance with the shareholder's will (or intestacy rules) and are therefore subject to the normal succession process in the shareholder's country of residence or domicile. However, when combined with a trust or foundation as the holding shareholder, the company's shares are removed from the shareholder's estate and succession is managed at the trust or foundation level. A foundation, like a trust, allows the founder to specify how the foundation's assets and income are to be applied during the founder's lifetime and after death, providing effective succession planning. The foundation has the advantage of separate legal personality, meaning it can own and transfer assets in its own name without the need for a trustee as legal owner. For civil law clients, the foundation may be more recognisable and legally certain in their home jurisdictions than a common law trust, making it particularly useful in structures involving succession across civil and common law jurisdictions.

A domestic company (non-GBC) is the simplest and least expensive vehicle but has limited utility for international wealth planning given the absence of treaty benefits and the domestic tax obligations. A GBC is more complex and more expensive (due to FSC licensing fees and management company requirements) but provides treaty access and tax efficiency for international investment and holding structures. The annual cost of maintaining a GBC — including management company fees, registered office, secretarial, accounting, and FSC fees — typically ranges from USD 5,000 to USD 15,000 per annum depending on complexity. A trust is a highly flexible and powerful vehicle but requires an ongoing trustee relationship and regular administration. Annual trustee fees for a standard discretionary trust at CTM range depending on asset complexity and the services required. Trust administration includes maintaining the trustee's file, preparing annual trust accounts, managing beneficiary correspondence, overseeing underlying investments, and conducting periodic reviews. The trust is the preferred vehicle for pure succession and asset protection planning where commercial operations are not contemplated. A foundation combines elements of both the trust and the company and tends to be slightly more complex and costly to establish than either in isolation, due to the requirement to draft a charter and regulations that are fit for purpose. The foundation is best suited for clients with civil law backgrounds, philanthropic objectives, or requirements for a legally separate vehicle with foundation-specific governance mechanisms. For most wealth planning purposes, the Mauritius trust remains the vehicle of first choice, with the company used as an underlying operational or holding vehicle and the foundation used in specific circumstances where its unique characteristics are warranted.