The number of trustees of a trust shall not exceed 4 of whom at least one must be a ‘Qualified Trustee’. A Qualified Trustee is defined in the Trust Act as a management company or such other person resident in Mauritius as may be authorized by the Financial Services Commission (FSC).

PROTECTOR

 

The office of the protector is provided (codified) under section 24 of Trust Act 2001. it provides an additional layer of Protection from a trustee’s misbehavior. The Act provides that any of the powers of Trustee can be made to be subject to the prior consent of protector. Protector may also be given powers going beyond that of merely to consent or refuse to consent, for example:
 

• to remove a trustee and to appoint a new or additional trustee
• to determine the law of which jurisdiction shall be the proper law of the trust;
• to change the forum of administration of the trust
• The Trust Act provides that exercise of power by protector will not result in him being deemed to be a trustee. A Settlor, beneficiary or trustee can be the protector.

MANAGING TRUSTEES

 

CUSTODIAN AND MANAGING TRUSTEES

 

The Trust Act allows for the split in trusteeship into a Custodian and a Managing Trustee. So that the trust  property shall be vested in the custodian trustee as if the custodian trustee were the sole trustee and the sole function of the latter shall be to hold the trust property and invest its funds and dispose of the assets as the managing trustee may direct.
 

This may prove to be very useful when the migration of a trust is being considered for cost factors. This enables the assets of the trust to continue to be vested in the current trustees as Custodian Trustee but for the management of the trust to be undertaken in Mauritius by the

Managing Trustee.
 

This achieves the dual objective of having the trust managed in a low cost jurisdiction whilst allowing the assets remain in the name of the original trustee, in a jurisdiction which the Settlor may feel more comfortable. This will also avoid the assets to be re-registered in the name of the new trustee upon migration.
 

DURATION OF TRUST

 

All trusts are limited to a perpetuity period of 99 years from the date of their creation, unless terminated earlier, with the exception of charitable trusts which may be of perpetual duration and noncharitable  purpose trusts which are limited to only 25 years.
 

TAXATION OF TRUSTS

 

In respect of taxation, a distinction is made between resident and non resident trusts.
 

A Trust of which the settlor and all the beneficiaries have been non-resident in Mauritius for the fiscal year may submit a declaration of non-residence with the Mauritius Revenue Authorities. Nonresident trusts are not subject to income tax in Mauritius.
 

A resident trust is taxable on its chargeable income at the rate of 15% per annum. However there is a generous definition of chargeable income in respect of trusts which is income after all distributions have been made. A Trust which holds a Category 1 Global Business Licence will benefit from the application of an automatic tax credit of 80% due to the foreign nature of the income which reduces the effectiveness.