Foundation in Mauritius
An autonomous legal entity without shareholders, the Mauritian foundation is a modern instrument for estate structuring, succession planning and philanthropy.
What is a Mauritian foundation?
The Mauritian foundation is an autonomous legal entity created under the Foundations Act 2012. Unlike a trust -- which is a contractual arrangement -- the foundation possesses its own legal personality. It can enter into contracts, hold assets in its own name, bring legal proceedings and engage with third parties.
The foundation is established by a founder who endows it with an initial estate and defines its objectives in a charter. The foundation has no shareholders or share capital: it is governed by a council in accordance with the provisions of the charter and the regulations.
The Foundations Act draws on civil law traditions (Liechtenstein, Panama, Netherlands) while integrating into the Mauritian legal system. This hybridity makes the Mauritian foundation an instrument that is understood and recognised in both common law and civil law jurisdictions -- a notable advantage over the trust, whose recognition in civil law countries can be uncertain.
The foundation must be registered with the Registrar of Foundations in Mauritius. If its activities fall under FSC regulation, additional licences may be required.
Types of foundations in Mauritius
The Foundations Act 2012 does not formally distinguish "types" of foundations, but practice recognises three main uses corresponding to distinct profiles.
Private foundation (estate)
The private foundation is used for the structuring and protection of family wealth. The founder endows the foundation with assets (participations, real estate, cash, works of art) and defines in the regulations the conditions for distribution to beneficiaries. The private foundation is a privileged instrument for estate planning, enabling the organisation of transmission over several generations with structured governance.
Charitable foundation (philanthropy)
The charitable foundation is established to pursue philanthropic objectives: education, health, research, community development, environmental protection, promotion of arts and culture. The charter defines the charitable mission and the regulations specify the funding allocation criteria, project selection procedures and monitoring mechanisms. The charitable foundation may benefit from certain tax advantages, subject to conditions.
Commercial foundation
The Foundations Act allows a foundation to carry out ancillary commercial activities related to its objectives. A foundation may thus hold participations in companies, manage an investment portfolio, or conduct revenue-generating activities intended to fund its objectives. This flexibility makes the foundation a potential vehicle for holding structures and estate arrangements involving income-producing assets.
Uses of the Mauritian foundation
Estate structuring
The foundation enables family assets to be consolidated within a separate legal entity, with clear governance and defined distribution rules. The founder can provide protection mechanisms for minor or vulnerable beneficiaries, access conditions linked to age, education or other criteria, and revision clauses enabling the structure to adapt to changing circumstances.
Succession planning
The foundation offers an alternative to wills and traditional succession mechanisms, particularly for entrepreneurs who have established their tax residency in Mauritius. Assets held by the foundation do not form part of the founder's estate under Mauritian succession law, avoiding probate procedures and potential disputes between heirs. Mauritian law does not provide for forced heirship rules for assets held by a foundation established under the Foundations Act.
Holding structure
The foundation can serve as a holding vehicle at the top of a group structure, as a complement to or instead of a Mauritian company. In the absence of shareholders, the foundation eliminates the risk of uncontrolled transmission of participations and provides governance continuity independent of the founder's personal circumstances. This use is relevant for family groups wishing to perpetuate their structure beyond the founding generation.
Structured philanthropy
The charitable foundation offers a professional framework for philanthropic activities: initial endowment, estate investment policy, funding allocation procedures, supported project monitoring, and stakeholder reporting. The foundation can receive additional donations and accumulate an estate intended to sustainably fund its mission.
Art collections and cultural assets
The foundation is a vehicle suited to the holding and management of art collections, archives and cultural assets. It ensures the conservation, management and potential exhibition of works, while organising their transmission to future generations. The foundation's legal personality facilitates transactions, inter-institutional loans and participation in auctions.
Advantages of the Mauritian foundation
Separate legal personality
Unlike the trust, the foundation possesses its own legal personality. It can hold assets, open bank accounts, enter into contracts and bring legal proceedings in its own name. This characteristic facilitates relations with third parties, financial institutions and administrations, particularly in civil law jurisdictions that do not fully recognise the concept of trust.
No forced heirship
Mauritian law does not provide for forced heirship rules for assets held by a foundation established under the Foundations Act. The founder has complete freedom to define the beneficiaries and the distribution conditions. This point is particularly relevant for founders from civil law jurisdictions where forced heirship significantly limits the freedom to dispose of one's estate.
Governance flexibility
The charter and regulations offer great flexibility in defining governance. The founder can reserve powers, appoint a guardian to supervise the council, define qualified majority rules for important decisions, and provide for dispute resolution mechanisms. This flexibility allows governance to be tailored to the specific needs of each estate situation.
Confidentiality
While the charter is a public document, the regulations remain confidential. Information relating to beneficiaries, distribution conditions and internal governance provisions is not publicly accessible. This separation between a public constitutional document (charter) and a confidential operational document (regulations) offers a balance between transparency and confidentiality.
Unlimited duration
Unlike the non-charitable trust (limited to 99 years), the foundation may have an unlimited duration, unless otherwise provided in the charter. This perpetuity is an advantage for long-term estate and philanthropic projects.
Foundation governance
The governance of the foundation is based on several actors whose roles and powers are defined by the Foundations Act and the foundation's constitutional documents.
The founder
The founder is the person who establishes the foundation and confers its initial estate. They draft (or have drafted) the charter and regulations. The founder may reserve certain powers: appointment and removal of council members, amendment of the charter and regulations, addition or removal of beneficiaries, or even dissolution of the foundation. The extent of reserved powers is defined in the charter and must be consistent with the estate and tax objectives of the structure.
The council
The council is the foundation's governing body, responsible for asset management and implementation of the objectives defined in the charter. It must comprise at least one member. Council members are appointed in accordance with the provisions of the charter and regulations. They are subject to fiduciary obligations towards the foundation and its beneficiaries.
The guardian
The guardian is an optional person appointed to supervise the council's actions and protect the interests of beneficiaries. They may have veto powers over certain council decisions, the right to receive information, and the power to apply to the court in the event of council default. The appointment of a guardian is particularly recommended when the founder is no longer able to exercise their reserved powers.
Charter and regulations
The charter is the foundation's fundamental constitutional document. It defines the name, registered office, objectives, council powers and conditions for amendment or dissolution. The charter is a public document, filed with the Registrar.
The regulations supplement the charter with detailed provisions: identification of beneficiaries, conditions and methods of distribution, internal governance rules, founder's reserved powers. The regulations are a confidential document that is not filed with the Registrar.
Taxation of the Mauritian foundation
The tax treatment of the Mauritian foundation depends on the nature of its activities and its structure.
As a separate legal entity, the foundation is in principle subject to income tax in Mauritius at the rate of 15% on its worldwide income. For a comprehensive analysis of the tax framework, see our guide on corporate taxation in Mauritius. However, if the foundation is structured as a GBC (Global Business Company) with an FSC licence, it can access the Partial Exemption Regime and benefit from a reduced effective rate on certain categories of foreign-source income, subject to substance conditions.
Charitable foundations may benefit from tax exemptions on income devoted to their philanthropic activities, subject to meeting the conditions provided for in the tax legislation.
As with the trust, Mauritius does not levy capital gains tax on securities, and there is no withholding tax on dividends paid by the foundation.
Disclaimer: the taxation of foundations is a complex area that must be analysed on a case-by-case basis, taking into account the tax legislation of all jurisdictions involved (residence of the founder, the beneficiaries, location of assets). The information provided here does not constitute tax advice and should not be relied upon as a substitute for the advice of a qualified professional.
Foundation or Trust: which to choose?
The choice between the foundation and the trust depends on estate objectives, the jurisdictions involved and the founder's preferences. Here is a comparison of the main features.
| Criterion | Foundation | Trust |
|---|---|---|
| Legal personality | Yes (separate legal entity) | No (contractual arrangement) |
| Legal framework | Foundations Act 2012 (civil law) | Trust Act 2001 (common law) |
| Asset holding | In its own name | By the trustee (legal ownership) |
| Governance | Founder, council, guardian | Settlor, trustee, protector |
| Recognition (civil law) | Generally good | Variable and sometimes uncertain |
| Confidentiality | Public charter, confidential regulations | Confidential trust deed |
| Duration | Unlimited | 99 years (except charitable trusts) |
| Recommended profile | Civil law founders, philanthropy, family holding | Common law founders, orphan structures, EBT |
This comparison is provided for guidance purposes. The choice between foundation and trust depends on numerous factors specific to each situation. Contact us for a personalised analysis.
Frequently asked questions about the Mauritian foundation
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