Key Features of a PTC
Depending on the client’s requirements, the PTC can operate either as a Category 1 or a Category 2 Global Business Company.
The shares of the PTC can be held by the client directly. However, there may be situations where the client may prefer to separate ownership of the PTC from him, in which case a purpose trust (preferred choice), a discretionary trust or a foundation can be set up to hold the shares of the PTC.
The number of trusts to be set up by the PTC will depend on how the client wants to segregate his wealth.
One of the reasons for setting up a PTC is to enable the client or his family to retain a greater degree of control over the trust affairs. However, care should be taken in determining the composition of the board of directors of the PTC to avoid potential management and control issues and impact of CFC rules.
The PTC should appoint a duly licensed Management Company to carry out its trust administration services in relation to any trust to which it is a trustee.
The PTC is also required to outsource any investment management services or investment advisory functions to licensed financial institutions.
Advantages of the PTC
There is no public Register of Directors and Shareholders of the PTC and also no registration of the individual underlying trusts
Flexibility in decision making
Actions of the trustee to be closely monitored by the family
Provides a holding structure for underlying operating companies of different jurisdictions leading to the start of a Family Office where all financial affairs may be centralised
Structure can accommodate Exotic or High Risk Assets which a normal trustee would otherwise not accept or would only accept for a very high Trustee fee
Administration of PTC and of underlying trusts and operating companies undertaken by professional Management Company in a low cost jurisdiction, i.e. Mauritius
Enables client to have control without compromising the validity of the structure
Provides protection to the client who may not feel comfortable with public corporate trustee
Enables family participation and empowerment of children
Provides a convenient way to pass control and influence over family business interests and wealth to the next generation.