A foundation is a legal entity operating as company through a council but without shareholders. It has the benefit of enjoying a legal personality which accomplishes similar functions as those of a Trust, but with the administrative suppleness of a company.
A foundation is exempt from income tax in Mauritius when it is centrally managed and controlled outside of Mauritius, in which case it is considered a non-Mauritius resident entity for tax purposes.
A Foundation provides a legal and legitimate means to safeguard one’s assets against personal liability, high taxes and the risk of seizure. It is an ideal vehicle used for succession planning and private wealth management.
Foundations are very often used when structuring the ownership of family and corporate assets, and may as well be established for charitable purposes. Foundations are practical mainly for:
- International tax planning
- Founder’s wishes not being public
- Barrier to forced heirship
- Separation of votes and benefits
- Employee option schemes
- Pension funds
Assets that can be held by a foundation are:
- Real estate property
- Deposit at banks
- Shares and stock in private companies
- Shares and stocks in publicly listed companies
- Intellectual property
- Almost any type of assets that carry a monetary value.
The registration process
The registration process of a Mauritius foundation starts with the name reservation of the Foundation with the Registrar General followed by the preparation of constitutive documents by the legal councel and collation of all application documents by Blue Azurite.
Once all documents are in order, we submit the application to the Registrar and in the event a GBL licence is required, the application is also submitted to the FSC.
We prepare the first minutes and file the application to open the bank account of the Foundation the minute the registration certificate and the FSC licence(where applicable) are received.
Ongoing administration is provided by Blue Azurite to ensure that the Foundation remains in compliance with the Mauritius law.
There are 5 roles that primarily need to be considered when establishing a Foundation, which include the Founder, the Council , the Executor, the Secretary and the Beneficiaries. The Foundation would obviously not be established if the Founder does not set it up and endows the Foundation with its initial assets. The Founder may also be a beneficiary of the Foundation of which he is the Founder.
Every Foundation shall have a Council which shall consist of members to administer the property of the Foundation and carry out the objects of the Foundation.
Every Foundation must have a Secretary which shall be a company resident in Mauritius and licensed and authorised as a Management Company in Mauritius.
A beneficiary is a person who is entitled to benefit under a Foundation, or in whose favour a power to distribute any property of a Foundation may be exercised.
Where a foundation has been established by the founder’s will(testament), an executor is appointed to carry out the directions therein.