Under the Act, trusts have to be created by an instrument in writing, stating the trust’s objects, subjects and intentions, as well as the duties and powers of the trustees. As the law prescribes that at least one Trustee needs to be a Qualified Trustee, anyone intending to create a trust in Mauritius has to do so through a Management Company.

PRIVATE TRUST COMPANIES
Mauritius recently introduced the Private Trust Company to add to the bouquet of products already available on the financial services marketplace in the context of private wealth management. A PTC provides a means by which a settlor (of his family) can retain a greater
degree of control over his trust affairs, have a “hands-on” approach in the management of the affairs of the trust without compromising the validity of the trust structure and whilst providing
enhanced protection for fiduciaries. A Private Trust Company is, essentially, a company formed for the specific purpose of acting as trustee of a single trust, or a group of related trusts. With a PTC, the Settlor, members of his family or his advisors can be appointed to the Board of
Directors and in this capacity they are in a position to influence the manner in which the trust is administered. The composition of the Board can be changed from time to time to bring in members of succeeding generations and in this way involve them in the management of the family affairs. The company itself will generally be administered by a fiduciary in the chosen
offshore location and which will be represented on the Board.

Setting-up a PTC in Mauritius
A PTC can be set up either as a Category 1 or a Category 2 Global Business Company (please refer to the relevant sections of this Guide for more information on the GBC1 and GBC2
Company). The PTC must be set-up by a licensed Management Company, it must adhere to conditions set out by the Financial Services Commission. It does not need to be licensed as a Corporate / Qualified Trustee.

The PTC is required to:

_ restrict its activities to that of private trust business services;
_ at all times maintain a minimum paid up capital of US$5,000;
_ provide its private trust business services solely to connected persons;
_ not solicit trust business from, or provide trust business services to, the public;
_ appoint a duly licensed Management Company to carry out its trust adminis-tration services in relationto any express trust to which it is a trustee;
_ appoint the Management Company as Company Secretary;
_ adhere to the AML/CFT Framework

Custodian and Managing Trustees
The Trust Act allows for the split in trusteeship into a Custodian and a Managing Trustee. So that the trust  property shall be vested in the custodian trustee as if the custodian trustee were the sole trustee and the sole function of the latter shall be to hold the trust property and invest its funds and dispose of the assets as the managing trustee may direct. This may prove to be very useful
when the migration of a trust is being considered for cost factors. This enables the assets of the trust to continue to be vested in the current trustees as Custodian Trustee but for the management of the trust to be undertaken in Mauritius by the Managing Trustee. This achieves the dual objective of having the trust managed in a low cost jurisdiction whilst allowing the assets remain in the name of the original trustee, in a jurisdiction which the Settlor may feel more comfortable. This will also avoid the assets to be re-registered in the name of the new trustee upon migration.

Duration of Trust
All trusts are limited to a perpetuity period of 99 years from the date of their creation, unless terminated earlier, with the exception of charitable trusts which may be of perpetual duration and noncharitable  purpose trusts which are limited to only 25 years.

Taxation of Trusts
In respect of taxation, a distinction is made between resident and non resident trusts. A Trust of which the settlor and all the beneficiaries have been non-resident in Mauritius for the fiscal year may submit a declaration of non-residence with the Mauritius Revenue Authorities. Nonresident
trusts are not subject to income tax in Mauritius. A resident trust is taxable on its chargeable income at the rate of 15% per annum. However there is a generous definition of chargeable income in respect of trusts which is income after all distributions have been made. A Trust
which holds a Category 1 Global Business Licence will benefit from the application of an automatic tax credit of 80% due to the foreign nature of the income which reduces the effective

Trustees
The number of trustees of a trust shall not exceed 4 of whom at least one must be a ‘Qualified Trustee’. A Qualified Trustee is defined in the Trust Act as a management company or such other person resident in Mauritius as may be authorized by the Financial Services Commission (FSC).

Protector
The office of the protector is provided (codified) under section 24 of Trust Act 2001. it provides an additional layer of Protection from a trustee’s misbehavior. The Act provides that any of the powers of Trustee can be made to be subject to the prior consent of protector. Protector may
also be given powers going beyond that of merely to consent or refuse to consent, for example:
_ to remove a trustee and to appoint a new or additional trustee
_ to determine the law of which jurisdiction shall be the proper law of the trust;
_ to change the forum of administration of the trust
The Trust Act provides that exercise of power by protector will not result in him being deemed to be a trustee. A Settlor, beneficiary or trustee can be the protector.

Some countries, especially civil law  jurisdictions, impose limits on how a deceased’s estate is to be distributed upon his death. The Act contains some interesting provisions to prevent a trust from being attacked on the basis of forced heirship rules. Section 7(6) of the Trust Act provides that the transfer or disposition on trust of property situated outside Mauritius, which if it had taken place in Mauritius would constitute a valid transfer or disposition of the property under the Act, shall not be declared void or invalid merely by reason that it contravenes the applicable law of the transfer or disposition, or the law of the transferor’s domicile or nationality. Section 8(4) provides that notwithstanding any enactment, where a non-citizen transfers or disposes of property on trust, the transfer or disposition shall not be set aside, avoided, or otherwise declared invalid or ineffective by virtue of any rule or law of his domicile or nationality relating to inheritance or succession or any rule or law of a similar nature, or any rule or law restricting the right of a person to dispose of his property during his lifetime so as to preserve such property for distribution at his death, or any rule or law having similar effect.
Section 11(5) provides that notwithstanding any rule or law relating to enforcement of judgments given by the court of another jurisdiction, where the law of Mauritius is the proper law of a trust, the Court shall not vary it or set it aside or recognise the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another Jurisdiction in respect of:

• the personal and proprietary consequences of marriage or the dissolution of marriage;
• succession rights (whether testate or intestate) including the fixed shares of spouses, ascendants and descendants or relatives; or
• the claim of creditors in an insolvency.Therefore where the trust’s assets are not situated in the jurisdiction which has forced heirship rules, the combined effect of these provisions would prevent the trust from being attacked. However, where the assets are situated in the jurisdiction with forced heirship rules, then a settlor must be careful in the way the trust is structured as some jurisdictions can exceptionally disregard a trust in the event that the heirs deprived establish that the avoidance of forced heirship was precisely the intention for the setting-up of the trust.
  

Confidentiality & Registration
Confidentiality is enshrined in the provisions of the Trust Act 2001.Trustees are not required to disclose any confidential information to any person not legally entitled to it. Nor can they be
required to produce or divulge that confidential information to any Court, tribunal, committee of enquiry or other  authority in Mauritius or elsewhere except where ordered by the Court or a Judge in Chambers in accordance with the Act. Confidential information extends to:

• the state and amount or any other details of the trust property
• the conduct of trust administration
• the trustee’s deliberations as to the manner in which a power or discretion was exercised, or a duty conferred or imposed by the law or by the terms of the trust was performed
• the reason for any particular exercise of such power or discretion or performance of duty or the material upon which such reason will be or might have been based; or
• the exercise or proposed exercise of  such power or discretion or the performance or proposed performance of such duty. There is also no requirement for the trust to be registered with any Governmental body. However, many Trustees prefer to register the trust deed at the office of the Registrar General in order to get a “date certaine” (certain date), which may if required be
  produced in evidence of the existence of the trust and its date of creation.