There is a lack of knowledge of the concept, uses and advantages of a trust


Mauritius is being used more and more by international clients for the creation of trusts mainly for asset protection and as a tool for tax and succession planning. However, says Rizwana Ameer Meea, of STEP Mauritius and also Chief Executive Officer of Sphere Management (Mauritius) Ltd, we still lag behind other jurisdictions. There is a need, according to her, to create more visibility of the jurisdiction on the international front. She is of opinion that we should aim to attract more investment advisors and professionals, and to develop this sector so that we can cater for international and local clients’ investment needs. She also talks about the upcoming conference organised by STEP Mauritius, and entitled ‘International Trust in Practice – From A Trustee Perspective’, to be held on 22nd of March.

How do you best define a trust?

A trust is basically a structure which allows a person or company to hold an asset for the benefit of others. The settlor, being the person who initiates the creation of the trust gives to another person or entity, the ‘trustee’, the right to hold title to property or assets for the benefit of third parties, the beneficiaries. The assets held in a trust can vary – cash, property, securities, businesses, art and gold are all commonly held in trust structures. The rules governing the management of the trust and its assets depend on the terms on which it is set up namely the terms of the trust deed.

In addition to the trust instrument, it is also usual for a settlor to indicate to the trustee his wishes as to the management and disposition of the trust fund in the future through a letter of wishes.

Can anyone create a trust, or is it appropriate for people who have assets worth millions or billions?

A trust is an ancient instrument, dating back to medieval times and is hence looked down upon as being a tool used by the rich. But trusts are versatile and can be used to protect assets and direct them into the right hands in the present and the future. There is no threshold on the net worth of a person or entity that determines his eligibility for creating a trust. Though they seem primarily suited towards high net worth individuals and families, those of more middle class may also find them useful, e.g., to dictate terms of an inheritance or protect minors or disabled beneficiaries.

It is worth noting that a trust is usually established to provide legal protection for the settlor’s assets, to ensure that such assets are distributed in accordance with the settlor’s wishes during and after his lifetime and generally for succession and tax planning among other reasons.

Do you think people in Mauritius (other than regular investors and businessmen) around the world, including those in Mauritius, are aware of the possibilities made available under a trust?

There is certainly a lack of knowledge of the concept, uses and advantages of a trust and there is a need to educate people accordingly. A trust is an important tool for asset protection, confidentiality, estate planning, tax planning as well as for charitable purposes. For example, normally on the demise of an individual, his assets are divided among his surviving heirs depending on the applicable law of succession but through a trust, assets attributable to children who are for example under age can be effectively and efficiently managed by a trustee. There is a need to also inform the advisors on the concept of trusts and how this can be used to effectively meet their clients’ asset protection requirements as well as the pitfalls that they need to be aware of. Well, if you have substantial personal and/or business assets and have never considered setting up a trust for the benefit of your family, the key is talk to your lawyer or tax adviser.

How safe is a trust?

If a trust is properly constituted, in accordance with the applicable legal provisions, it is safe and will usually be upheld by a court of law. However, if the reason to set up a trust is to defraud creditors, then the trust can be declared void and assets can be exposed. The other concern of investors is of course loss of control. You relinquish at least some control over the assets when transferring those to a trustee as the assets are legally controlled by the trustee. But how much depends on the terms of the trust deed which is of course driven by the purpose and the nature of the trust. If you want asset protection, for instance, the more removed you are from the money, the greater the protection.

In most cases, from an asset protection perspective, assets held in a family trust cannot be attacked by creditors or lawsuits so they are ideal for protecting assets from business or personal disputes and they can also facilitate the transfer of assets from generation to generation tax free. The benefits of using a trust for tax planning, concessions, benefits and asset protection are well established in today’s business arena. Interposing a corporate entity as the trustee is becoming an increasingly common way to operate the business of the trust. In Mauritius, a trust is required to have a qualified trustee, licensed by the Financial Services Commission, thus giving additional protection. As for any structure, it is paramount that a trust is managed properly by experienced trustees and advisors.

There is often a perception that a ‘trust’ is created to hide assets for tax evasion purposes or for fraudulent purposes. What is your view on this?

As you rightly mention, this is a perception. Trusts are created for several purposes as I have already indicated and are today an established tool for asset protection, tax and succession planning and protection from creditors and lawsuits. It is important for trustees to ascertain the rationale and substance for establishing a trust, the source of fund, the mode of distribution, the commercial basis for a trust structure, whether beneficiaries have made required reporting to the authorities, the identity of settlors and beneficiaries among other considerations. It should be highlighted that Mauritius complies with international standards and has enacted legislation to ensure that Mauritius trust structures are not used for illicit or fraudulent purposes.

How well is Mauritius used as a platform for trust creation by people from other countries? Can we have an idea of the number of international trusts in Mauritius?

Mauritius is being used more and more by international clients for the creation of trusts mainly for asset protection and as a tool for tax and succession planning. It has leveraged itself as the jurisdiction of choice especially for the region as the platform for structuring investments into Africa. Trust have been used by non-residents namely for: Preservation of wealth, Asset Protection, Forced Heirship, Tax Planning, Charitable and Philanthropic purposes, Succession planning, Employee Share Schemes and Asset Securitization Schemes.Nevertheless, we are still behind certain other jurisdictions and hence we implement measures to ensure that our laws are in line with international standards and they meet investors’ requirements. We also need to create more visibility of the jurisdiction on the international front.

It is worth mentioning that Mauritius is also used by international clients for creation of foundations to achieve similar purposes.Although we tend to associate trusts to international investors, we should encourage our local businesses and individuals to use this structuring tool.

Why do people use Mauritius as a platform for trust? Are we competitive as other jurisdictions which offer similar services?

Mauritius has established itself as a premier international financial centre with a robust regulatory and legal framework which ensures confidentiality and investor protection. The ultimate court of appeal remains the Privy Council. It also benefits from the expertise of qualified trust professionals and fiduciary service providers.

Mauritius is known for its political stability and hence providing the required comfort to investors to structure their trust structures in the jurisdiction. It has at the same time preserved its business friendliness and not to forget that all this is supported by a strong banking sector. Nevertheless, we should aim to attract more investment advisors and professionals and to develop this sector so that we can cater for international and local clients’ investment needs.

Our edge is definitely that in addition to providing investors with a reputable platform we are competitive in terms of costs as well as premium services compared to traditional trust jurisdictions.

STEP Mauritius will be organising a conference on “International Trust in Practice – From A Trustee Perspective”. Can you tell us more about it?

STEP Mauritius is organizing this event for trust practitioners. This will be an event centered on the practical issues arising out of the day-to-day administration of trusts. We have identified the most pertinent issues and have selected professionals in the sector to educate our peers.

We hope by doing so to encourage advisers, lawyers and professionals of the global business sector to have a better understanding of trust and hence promote Mauritius trust structures as an effective wealth planning tool.

We also want to create more awareness on the role of Society of Trust and Estate Practitioners (STEP) and is planning to conduct various other initiatives to that end. STEP is the global professional association for practitioners who specializes in family inheritance and succession planning. We work to improve public understanding of the issues families face in this area and promote education and high professional standards among our members.

For more information: