Asset Protection with a Trust

What an asset protection trust in Mauritius actually does

An asset protection trust in Mauritius is an ordinary trust under the Trusts Act 2001, used with a particular goal: to place family assets in the hands of a trustee, under written terms, so that they are managed for identified beneficiaries and are no longer simply part of the settlor's personal estate. The protection does not come from a label. It comes from how the structure is built, who holds which role, when assets are transferred and why.

Readers who search for how to protect assets in Mauritius with a trust often expect a single answer. The honest one is conditional. A trust can reduce certain exposures, such as the assets of one family member being swept into the personal difficulties of another. It cannot make assets untouchable, and it does not override criminal law, genuine creditor rights that existed before the transfer, or the transparency rules that now apply to every trust administered by a licensed trustee.

This page is general information, not advice. Whether a trust protects anything in your case depends on your residence, the nature of the assets, your family situation and the timing. An adviser should analyse that before any transfer; you can start a conversation through the contact form.

The legal idea behind the protection

A trust works because legal title and benefit are separated. The trustee holds the assets and administers them; the beneficiaries have the interests the deed gives them. The settlor, having transferred the assets, no longer owns them in the ordinary sense.

Three features of the Trusts Act 2001 matter most for protection.

Irrevocability as the starting point

Article 11 presumes that a trust is irrevocable by the settlor and the settlor's legal representative, unless the deed contains an express power of revocation. This default is the core of the protective effect. If a settlor could take everything back at will, there would be little difference between the trust and the settlor's own patrimony. A deed that keeps broad rights to revoke weakens the case that the assets have really left the settlor's control. The comparison between revocable and irrevocable trusts is covered separately.

The settlor may stay involved, but not alone

Under article 8, the settlor may also be a trustee, a beneficiary, a protector or an enforcer. However, the settlor cannot be the sole beneficiary of the trust created. That limit is deliberate: a structure that returns everything to its creator and to no one else looks much more like a personal pocket than a genuine settlement.

The same article adds a point that matters for international families. The transfer made by a settlor who is not a Mauritian citizen cannot be annulled under the succession rules of the settlor's domicile or nationality. How far that helps in a real dispute depends on the facts and on the courts that hear the case, so it is a feature to discuss with an adviser, not a guarantee.

Protective and spendthrift provisions

Article 18 recognises the protective or spendthrift trust. A beneficiary's interest can be made subject to termination, restraint on alienation or suspension if the beneficiary becomes insolvent or if the beneficiary's property is seized. The practical effect is that a beneficiary's own creditors may find little to reach, because the interest is not simply an asset the beneficiary can freely sell or pledge. See spendthrift trusts for how such clauses are drafted for heirs who struggle with money.

What a trust can help protect against

The table below summarises the main risks a trust is commonly used to address, and the conditions attached to each. It is a map, not a promise.

None of these rows works if the trust is a sham, if the transfer is made with the aim of defrauding a known creditor, or if the settlor in practice keeps full command of the assets.

What a trust cannot protect against

Being clear about the limits is the most useful part of any asset protection discussion.

Crime and financial crime enquiries

A trust gives no protection against criminal investigation. Under article 33, the trustee must keep information about the trust confidential, but a court orders disclosure on the application of an investigating authority when the information is required in good faith for an investigation or proceedings relating to financial crime. Confidentiality is therefore real but bounded. For more on this, read whether Mauritius trusts are confidential.

Existing creditors and transfers made to avoid them

A trust is not a way to move assets out of reach once a claim is known or foreseeable. Courts look at timing, intention and the substance of the arrangement. The question of what creditors can and cannot reach is explored in trusts and creditors. Where a transfer looks designed to defeat an existing claim, the structure itself is at risk.

Sham arrangements

If the deed says one thing and the parties behave differently, a court may treat the trust as a sham and set it aside. The classic warning signs are a settlor who gives orders to the trustee and expects them to be followed, a trustee who signs whatever is put in front of them, and assets used as if they were still the settlor's own. Read when a court sets a sham trust aside before relying on any structure.

Mandatory family rights

Succession law and matrimonial law pursue different aims from trust law. Depending on the person, the assets and the applicable law, forced heirship rules or a spouse's rights may still be raised against a transfer. This is a legitimate and frequently misunderstood point, covered in forced heirship and trusts and, for divorce, in protecting trust assets from divorce. Do not assume a trust displaces these rules without advice.

Foreign trusts and Mauritian property

Article 60 provides that a foreign trust is governed by its own terms and law, but it is not enforceable in Mauritius to the extent that it would amount to an offence, be contrary to public policy, or apply directly to immovable property situated in Mauritius. A trust that looks protective on paper may therefore meet a hard limit when real estate in Mauritius is involved.

Tax and reporting

A trust does not remove tax or reporting obligations. Under the Income Tax Act, a trust is taxable on its taxable income at the Part IV rate of the First Schedule, which is 15%. The former exemption for a non-resident trust on filing a declaration of non-residence was repealed by the Finance Act 2021, with deemed effect from 1 July 2021, and it no longer appears in the version consolidated up to the Finance Act 2026. Article 46(2) still describes a trust with a non-resident settlor and non-resident beneficiaries, or a purpose trust whose purpose is carried out outside Mauritius, but such a trust remains taxed at the same 15%. Distributions to a beneficiary are treated as a dividend for the beneficiary. See how trusts are taxed for the broader picture.

The role of the trustee, protector and enforcer

Protection depends on people as much as on paper.

The trustee

The trustee holds the assets and must keep accounts and records up to date. Under article 38(3) of the Trusts Act 2001, the trustee also keeps an alphabetical register of the names and last known addresses of each beneficiary and settlor, including for a non-resident foreign trust that the trustee administers. Accounting records are kept for at least 5 years after the transactions concerned are completed.

Article 28 limits a trust to a maximum of 4 trustees, with at least 1 qualified trustee at all times, although a trust does not become invalid or void merely because a trustee or a qualified trustee is missing. A qualified trustee, under article 2, is an FSC-licensed corporate service provider (Management Licence) or another person resident in Mauritius authorised by the FSC to provide trustee services. The Financial Services Act 2007 requires a management licence from the FSC to act as a corporate trustee or qualified trustee.

The protector

Article 24 allows the deed to provide for a protector, who may be an adult, including the settlor, or a legal person. Unless the deed says otherwise, the protector can remove and appoint trustees, set the governing law of the trust, change the place of administration and withhold consent to certain acts, without becoming a trustee. A protector is a useful check on the trustee, but a protector who is also the settlor and who directs every decision may undermine the claim that control has genuinely passed. The trust protector page explains the role.

The enforcer of a purpose trust

A purpose trust, charitable or not, is valid without a beneficiary under article 19 if its purpose is specific, reasonable, achievable and lawful, the deed provides for an enforcer and a successor enforcer, at least one trustee is a qualified trustee, and the fate of surplus assets at the end of the trust is stated. Under article 21, the same person cannot be both trustee and enforcer of the same trust. The enforcer is entitled to the annual accounts, a copy of the deed and the legal opinions received by the trustees.

Two further rules are worth knowing. The transfer of Mauritian immovable property to a non-charitable purpose trust is null and void under article 19(3). And a purpose trust created by a Mauritian national is void unless the FSC approves the appointment of the enforcer and the named successor, under article 19(6); the FSC fee schedule shows no processing fee for those approvals.

How much control can the settlor keep?

This is the central tension. The more control the settlor retains, the weaker the protective argument. The more the settlor gives up, the stronger it is, but the less comfortable many families feel. Mauritian law allows a settlor to wear several hats, yet that permission is not a licence to run the trust as a personal account.

A balanced approach usually looks like this:

• the settlor sets out wishes in a non-binding letter of wishes, which the trustee considers but is not bound by;
• the trustee, preferably independent and professionally licensed, takes decisions on distributions;
• any reserved powers are narrow, written and justified, a subject treated in how much control a settlor can keep;
• a protector, if used, is someone who can act independently when needed.

Transparency: protection does not mean invisibility

Mauritius has moved firmly toward transparency, and anyone considering a trust should expect to be identified to the authorities, even if not to the public.

The register of trusts

Article 26A of the Financial Services Act 2007 requires the FSC to keep a register of domestic trusts and of foreign trusts that have at least one qualified trustee. The register includes, among other things, the name and characteristics of the trust, the deed and its amendments, the identity and addresses of beneficiaries, trustees, settlors, protectors and enforcers, the purpose, the governing law, the place of administration and the service providers. The consolidated Act as at 1 September 2026 shows that article 26A(2) was amended by Act 13 of 2026, in force on 1 September 2026, which repealed paragraph (g) of the list of register items. The register is not a public document; see the register of trusts in this site's guides.

Under article 26A(3), the qualified trustee must supply the information and documents the FSC requires, within the time and in the form the FSC sets. The FSC may also inspect the qualified trustee and have the information verified at the trustee's expense.

Beneficial ownership

Article 29 of the Financial Services Act requires each licence holder to keep, at all times, a register of the beneficial owners of each client, a duty in force since 1 October 2018, and each qualified trustee to keep a register of every trust it administers, available to the FSC on request, a paragraph inserted with effect from 1 August 2024. These duties cover existing clients and trusts as well as new ones.

For a trust-type legal arrangement, FIAMLA 2002 (in the FIU's 2026 version) treats as beneficial owners the settlor, the trustee, any protector, each beneficiary (or the class of beneficiaries and the objects of a power) and any other natural person exercising ultimate effective control, including through a chain of control. The FSC also publishes Practice Notes for qualified trustees and corporate service providers that explain how to maintain and update this information.

Dealing with banks and other regulated firms

Under article 17C(5A) of FIAMLA, a trustee of an express trust must declare that status to a reporting person, such as a bank, when establishing a business relationship or carrying out an occasional transaction of at least Rs 500 000 or the foreign currency equivalent. Entities acting as qualified trustees are themselves reporting persons: they must apply customer due diligence and report suspicious transactions. Knowingly giving false customer due diligence information can lead to a fine of up to Rs 500 000 and imprisonment for up to 5 years.

The message is simple. A trust that cannot withstand disclosure to the regulator and to the trustee's bank is not an asset protection tool; it is a liability.

Foundations as an alternative route

Some families ask whether a foundation protects better than a trust. A foundation has legal personality, and the Foundations Act 2012 sets its own rules. Registration is made to the Registrar on an approved form, with the list of first officers, a declaration from a law practitioner, legal consultant or firm confirming compliance with the Act, a declaration of accuracy from the applicant and the fees in the schedule.

The same transparency logic applies. FIAMLA 2002 includes the foundation in its definition of a legal person and names the Registrar of Foundations among the relevant authorities, so beneficial ownership transparency obligations apply. For tax, section 49A of the Income Tax Act taxes a foundation at the Part IV rate of 15% and treats distributions to a beneficiary as a dividend. The former exemption for a foundation whose founder and beneficiaries are all non-resident was repealed by the Finance Act 2021, again with deemed effect from 1 July 2021. If you are weighing the two options, start with trust versus foundation.

How long can a protective trust last?

Duration affects planning. Under article 9, a trust other than a purpose trust may last for a maximum of 99 years from its creation, unless it ends earlier. A purpose trust, charitable or not, may be perpetual under article 9(2), a change made by Act 20 of 2011 in force from 16 July 2011. Article 10 allows income to be accumulated for the full maximum period of the trust, but not beyond 25 years where the trust holds immovable property situated in Mauritius.

A sensible order of questions before you act

Protection is built before problems arise. A checklist for the conversation with an adviser:

• Why do I want a trust, and which specific risk am I addressing?
• Are there existing or foreseeable claims against me or my family?
• Which assets would be transferred, and where are they located?
• Which succession and matrimonial rules apply to me and my family?
• Who will be trustee, and is that person or firm genuinely independent and licensed?
• Do I need a protector, and how much power should that person hold?
• What control, if any, do I keep, and can I justify it in the deed?
• Am I comfortable with the information that will be recorded about the trust and its parties?
• What tax applies to the transfer, the income and the distributions in my situation?
• How will the trust be reviewed over time?

Key figures from the legislation