Foundation

>

A Foundation is an entity set up for a specific purpose by means of an endowment made. It comes into existence when the Founder transfers ownership of assets into the Foundation. A Foundation enjoys legal personality which fulfils similar functions as those of a Trust but with the administrative flexibility of a company.

Foundation is in many respects similar to corporate entities but afford the protection and continuity derived from the use of trusts. It has no members or shareholders, and is generally established to reflect the wishes of the founder, who may be an individual or a corporate entity. These wishes are contained within the Foundation’s Charter and Regulations. Foundations can be established for a fixed or indefinite period of time and can be used for charitable, commercial or family purposes.


The Mauritius Foundation provides a legitimate means to protect one’s assets against personal liability, high taxes, exchange controls or risks of confiscations.


They are used mainly in those jurisdictions where the concept of trusts is not well-known.


The Mauritius Foundations Act 2012 is a modern piece of legislation providing for wealth management services, succession and estate planning.


A Foundation may apply for a global business license (Category 1) and may elect to be tax resident in Mauritius to take advantage of Double Tax Agreements in force in Mauritius.


Every Foundation is required to have a registered office in Mauritius where all communications and notices shall be addressed. The Registered office of the Foundation need to be mentioned in the Charter.


The Council


The Foundation Council is the administrative organ of the Foundation Similar to the Board of Directors of a company. Members of a Foundation Council have no personal title to a Foundation’s property either individually or jointly. Foundation Council Members are not answerable to any shareholder or body of investors.


The Foundations Act requires every Foundation to have a Foundation Council to administrate the property of the Foundation and carry out the objects of the Foundation. The Foundation Act further requires the Foundation Council to have at least one member who shall be ordinarily resident in Mauritius. Every member of the Foundation Council shall be appointed in accordance with the Charter.


The Foundation Assets shall consist of:-


• Shares and stocks in both listed and private companies;


• Investment portfolios;


• Real estate;


• Intellectual property;


• Bank deposits;


• Most other types of assets.


The salient features of the Mauritius Foundation are as follows:


• It could be set-up intervivos (by Charter) or by Will;


• It could be set-up to benefit persons, class of persons or to carry out a purpose which may be charitable, non-charitable or both;


• It would have to be managed by a Council which should comprise of at least one member ordinarily resident in Mauritius;


• It would require a secretary in Mauritius which would need to be licensed by the Financial Services Commission;


• It would need to have a registered office in Mauritius;


• When registered it would have a separate legal personality;


• It would need to keep proper books of accounts and keep its records in Mauritius at its registered office;


• It would not be subject to being set aside by a Mauritius Court and a Mauritius Court would not recognize the validity of any claim against the property of the Foundation pursuant to the law of another jurisdiction or the order of a court of another jurisdiction;


• Where the founder and all the beneficiaries are non-resident or the purpose for which it is set up is carried out outside Mauritius, it would be exempt from Tax in Mauritius.


A Foundation is created by registering the following particulars extracted from its Charter:


• The name of the Foundation;


• The date of the Charter; and any amendment made to the Charter before its submission to the Registrar;


• The purpose and objects of the Foundation;


• The date of the Articles, if any, of the Foundation and any amendments made to them before its submission to the Registrar;


• Name and address of the Founder;


• Details of the beneficiaries or the manner in which the beneficiaries may be appointed or removed;


• The name and address of the secretary;


• The name and address of the Council Members;


• The address of the Registered Office of the Foundation;


• The Period, if any, for which the Foundation is established.


Where the Registrar is satisfied that an application for registration complies with the Foundation Act, it shall issue a Certificate of Registration.