In this article, Shamima Mallam-Hassam, Managing Director in our Mauritius office, explores the business landscape in Mauritius and the unique features of the Mauritius International Financial Centre, for succession planning.
Located off the southeast coast of Africa, Mauritius offers a politically and socially stable environment with attractive tax regimes. It is also recognised as the happiest country in Africa according to the World Happiness Index 2023.
Mauritius has a dynamic business ecosystem, ranked 13th globally for ease of doing business and first in Africa. The island features a hybrid legal system, blending the French Code Civil and British common law.
Strategic Advantages
For foreign investors, Mauritius offers several advantages:
- Flat 15% corporate and income tax rate
- No foreign exchange controls
- 100% foreign ownership
- Exemption from capital gains tax, dividend and interest withholding tax, share transfer tax, estate duty, inheritance, and wealth tax
Lifestyle
Mauritius combines technology and tradition, offering a unique lifestyle. With a multicultural society, excellent international schools and a vibrant cultural scene, it is an ideal second home. The island is also known for its natural beauty.
As a growing medical hub, Mauritius provides high-quality healthcare services without requiring health insurance. It offers timely access to specialists, affordable treatments, and modern technologies, making it an attractive destination for retirees.
Wealth Structuring and Property Acquisition
Mauritius has a legal system that incorporates elements of both English and French law. Succession planning, especially for foreign property owners, involves understanding the legal framework. The financial industry in Mauritius has re-engineered its business model to focus on the African continent. For those considering wealth management or property acquisition, Mauritius offers various options, including trusts, foundations, Private Trust Companies (PTCs), and family offices. The Property Development Scheme (PDS) provide opportunities for foreign property ownership with attractive fiscal incentives.
Investing in Mauritian property often provides eligibility for residency programs, offering extended stays and potential tax exemptions.
Mauritius Trusts
Trust structures offered by the Mauritius IFC are often chosen as preferred investment vehicles by international investors for inheritance and succession planning. These structures serve several purposes:
- Preserving the wealth of affluent individuals and their assets.
- Providing family-owned businesses with a legal solution to ensure business continuity and the smooth transfer of control to the next generation.
- Helping emerging entrepreneurs implement modern management practices and influence decision-making.
- Supporting young entrepreneurs who want to attract foreign investment and structure their wealth with succession planning in mind for their family's needs and philanthropic activities.
Types of trust structures that can be set up in Mauritius include:
- Purpose Trusts: formed for specific, reasonable purposes.
- Charitable Trusts: meant solely for the benefit of charitable bodies.
Mauritius Foundations
A foundation is a wealth management vehicle that combines characteristics of both a trust and a company. As a legal entity, it can directly own assets and is increasingly used globally, especially in civil law jurisdictions where trusts are less common.
Like a trust, foundations are separate from the individuals who create them and from those who may benefit from their assets. Both trusts and foundations provide flexibility in directing interests in assets, determining who may benefit and under what circumstances.
When a foundation is registered with the Registrar of Foundations in Mauritius and has obtained a certificate of registration, it gains legal personality and can exercise all the functions of an incorporated body – it can conduct business or activity both within or outside Mauritius, enter into transactions and hold assets.
Additionally, upon application to the Financial Services Commission, a foundation may also obtain a Global Business Licence. Foundations are liable to income tax in Mauritius on their chargeable income at the rate of 15%, however they may be subject to an effective income tax rate of 3% when holding a Global Business Licence.
How We Can Help
Whether you are looking to preserve wealth, ensure business continuity, or explore investment opportunities, Mauritius offers a stable and advantageous environment.
Our Mauritius office provides comprehensive services to support both corporate and private clients in achieving their objectives.
For corporate clients, we provide company formation, administration, regulatory compliance, accounting, and tax compliance. We support international businesses with asset holding and operational structures.
We work with high-net-worth families, family offices and professional advisors, providing tailored structuring solutions for wealth preservation and succession planning purposes. Our services include trusts and foundations, fiduciary and directorship, company formation, real estate, and transaction support.
To learn more about how we can assist you, get in touch with Shamima Mallam-Hassam in our Mauritius office at smallam-hassam@tridenttrust.com.