Mauritius

5. The Foundations Act 2012


A. Constitution Of A Foundation

The foundation involves a founder, who is the person endowing a foundation with its initial assets, transferring the title of their assets intervivos (by charter) or by will to an entity called a foundation to be used for a purpose or in the interest of beneficiaries. A foundation can be set up for any legal purpose whether charitable or not. A founder can be a beneficiary of the foundation.


The foundation is managed by a council, which will administer the property of the foundation and carry out the objects of the foundation. The council needs to have at all times at least one member who shall be ordinarily resident in Mauritius. A founder can be a member of council. The council has the duty to act honestly and in good faith and to exercise the necessary care, diligence and skill. The council is empowered to appoint such officers including auditors, as may be necessary for the effective discharge of its duties and obligations. Officers and members of the council shall be personally liable in the event of fraud, wilful misconduct or gross negligence committed by that person.


Every foundation must also have a secretary which shall be a management company or such other person resident in Mauritius as may be authorised by the FSC.


The foundation must be registered with the Registrar of Foundations (Registrar) in Mauritius. The Registrar has the duty to maintain a register of foundations and a record of all the relevant documents of every foundation registered under the Act.


The Act also provides for the redomiciliation of foundations. Foundations registered abroad can be re domiciled in Mauritius. Similarly, foundations registered in Mauritius can be redomiciled abroad, and this provision allows investors of the global business sector to shift the management of their assets closer to home if this option gives them a greater sense of comfort and security.


It is worth noting that where a non-citizen endows property to a foundation, the transfer shall not be set aside, avoided or otherwise declared invalid or ineffective by virtue of any rule or law –


(a) of their domicile or nationality relating to inheritance or succession or any rule or law of a similar nature


(b) restricting the right of a person to dispose of their property during their lifetime so as to preserve the property for distribution at their death, or any rule or law having similar effect.

B. Fees And Taxation

A fee of MUR9,000 (approximately USD300) is payable to the Registrar of Foundation at the time of registration or redomiciliation of the foundation and a similar amount is payable in respect of every subsequent year.


A foundation is liable to income tax on its chargeable income at the rate 15 per cent. However, a foundation may apply to the Financial Services Commission for a Category 1 Global Business Licence and be therefore subject to an effective income tax rate of a maximum of 3 per cent after deemed foreign tax credit. A foundation holding a Category 1 Global Business Licence may enjoy tax treaty benefits through the network of DTAs that Mauritius has with more than 35 countries


A foundation whose founder is a non-resident or holds a Category 1 Global Business Licence, 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, is exempt from income tax in respect of that year. Such exemption is obtained by depositing a declaration of non-residence for any income year with the Director-General of the Mauritius Revenue Authority within three months from the expiry of the income year.


Any distribution to a beneficiary of a foundation is considered to be a dividend to the beneficiary and is therefore exempt from income tax.



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