Contributed by: Toukan Corporate Services
A Foundation is an ideal vehicle for succession planning and private wealth management. It is the dedication of property to an entity to be used for the benefit of people for a specific purpose. It may be established to achieve both charitable and non-charitable purposes.
Foundation bears much similarities to corporate entities but afford the protection and continuity derived from the use of trusts. Having neither members nor shareholders, it is generally established to reflect the wishes of the founder, who may be an individual or a corporate entity. These wishes are contained within the Foundation’s Charter and Regulations.
Foundation could be a prime component when structuring the ownership of family and corporate assets and is generally important in jurisdiction where trusts are not generally recognized. It is increasingly being used across the globe, especially in civil law jurisdictions where the concept of trusts is not that familiar.
The benefits of a Mauritius foundation entails:
- Control may be maintained by the founder who may be the sole member of the council;
- The founder may be the sole beneficiary of the council;
- Greater management flexibility through the charter and the council;
- Holding asset can be passed on from one generation to the next;
- It is an appropriate method for inheritance tax planning;
- Investment protection;
- A Mauritius foundation allow the founder to appoint his close aides on the council thus there is full control of the foundation’s assets;
- Privacy of the founder and beneficiaries are protected.
Foundations can be used, inter-alia, for the following purposes:
- Accumulation and preservation of wealth;
- Wealth and asset management;
- Succession and estate planning;
- Avoidance of forced-heirship rules;
- Charitable and philanthropic purposes;
- International tax planning.
The law regulating Mauritius Foundation, i.e. Mauritius Foundations Act 2012, offers one of the most dynamic Foundations available from any jurisdiction and further promote Mauritius as a platform for wealth management services, succession and estate planning. It may, upon application to the Financial Services Commission of Mauritius, hold a global business licence and may elect to be tax resident in Mauritius in order to benefit from the wide network of Double Taxation Agreements (“DTAs”) in force in Mauritius.