USES OF MAURITIAN TRUSTS
MUHAMMAD UTEEM LLM TEP
UTEEM CHAMBERS
A Law Firm registered under the Mauritius Law Practitioner ’s Act
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Mauritius International Financial Services: Onwards & Upwards
INTRODUCTION
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Austin v Bailey (1962)
Trusts Act 2001
- Qualified Trustee
- Protector
- Letters of Wishes
- Remedies
UTEEM CHAMBERS
TAX PLANNING
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Tax Incentive Trusts:
the settlor :
non-resident
global business licence holder
another tax incentive trust
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all beneficiaries: non-resident
global business licence holder
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purpose trust carried out outside Mauritius
UTEEM CHAMBERS
RESIDENT TRUSTS
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Access to double taxation treaty network
Rate of Taxation: 15%
Deemed foreign tax credit: 80%
Chargeable Income = net income minus aggregate
amount distributed to Beneficiaries
Distribution to non resident Beneficiaries is exempt
from tax.
Trusts v/s Companies
UTEEM CHAMBERS
RESIDENT TRUSTS
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Definition of residency:
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trust is administered in Mauritius and
a majority of the trustees are resident in
Mauritius; or
the settlor resident in Mauritius at creation of
trust
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Foreign Trust can be resident in Mauritius
UTEEM CHAMBERS
RESIDENT TRUSTS
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Custodian and Managing Trustees
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No need to transfer trusts assets into the name of new
managing trustees
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Comfort factor for settlor
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Costs and tax savings
UTEEM CHAMBERS
NON RESIDENT TRUSTS
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0 % tax
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declaration of non-residence filed with the
Commissioner of Income Tax within 3 months after
the expiry of the income year
Use:
- Accumulation of Income Trusts.
- Special purpose vehicle.
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UTEEM CHAMBERS
ASSETS PROTECTION TRUSTS
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Trust assets separate from settlor’s assets
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Trust not void or voidable by reason of settlor’s
bankruptcy or attack by settlor’s creditors
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Court may declare trust void if trust made with the intent
to defraud creditors of the settlor at the time when trust
property vested in trustee.
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Action within 2 years from date of transfer to trust
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Court will not enforce a foreign judgment in respect of
claims of creditors in an insolvency
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Must be planned carefully. Federal Trade Commission v
Affordable Media LLC and other (the “Anderson case”)
UTEEM CHAMBERS
FORCED HEIRSHIP RULE
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Restrictions on free disposal of property
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the transfer or disposition shall not be set aside
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foreign judgment in respect of succession rights not
enforceable
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Planning Tips:
Succession law. Immovable v/s movable assets
Restriction on disclosure of information
Beneficial interest automatically lapses if Beneficiary
attacks the trust.
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UTEEM CHAMBERS
STRUCTURED FINANCE
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Purpose
Trust
Settlor
Shares
Excess
$ Loan
SPV
Cash
Inflow
Banks
Buy
Repayment
Receivables
Assets
 Off Balance Sheet
 Bankruptcy Remote
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LARGE NUMBER OF CREDITORS
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ASIince
BORROWER
$
Security
TRUST
ng rights
Assignment of
Assignment of
Security
CRED
ITORS

Voting Rights
CRED
ITORS
CRED
ITORS
Creditors free to sell their participations.
UTEEM CHAMBERS
PENSION TRUSTS
12
ASIince
EMPLOYER
TRUST
$
Investments
PENSION $
Emp’ee
Emp’ee
Emp’ee
UTEEM CHAMBERS
THE END
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Thank you for your kind attention.
UTEEM CHAMBERS