Offshore Trust: What It Means in Mauritius

What "offshore trust" means in Mauritius

Mauritian law has no statute called the "offshore trust act". When people speak of a Mauritius offshore trust, they usually mean a trust created under the Trusts Act whose settlor and beneficiaries live outside Mauritius, and whose assets may be held abroad. The word "offshore" describes the family's position, not a special legal category.

A trust of this kind is the same legal arrangement as a domestic one: a settlor transfers assets to a trustee, who holds them for beneficiaries or for a purpose under the terms of a trust deed. What changes is the cross-border setting: tax residence in another country, a foreign bank, perhaps foreign property, and sometimes a governing law other than Mauritian law.

For a family, an offshore trust in Mauritius is therefore a tool for holding and passing on wealth from a neutral jurisdiction. It is not a way of hiding assets, and it does not switch off the rules of the country where the family lives.

Who runs a non-resident trust: the qualified trustee

The key person in any Mauritius trust with an international dimension is the qualified trustee. Under section 2 of the Trusts Act 2001, a qualified trustee is an FSC-licensed corporate service provider (Management Licence), or another person resident in Mauritius whom the Financial Services Commission (FSC) has authorised to provide trustee services. The Financial Services Act 2007 requires a person acting as corporate trustee or qualified trustee to hold a management licence from the FSC.

Section 28 of the Trusts Act caps the number of trustees at four and requires at least one qualified trustee at all times. A missing trustee, or a missing qualified trustee, does not by itself make the trust invalid or void.

This is the practical meaning of "Mauritius" in an offshore trust: the legal anchor is a regulated local trustee, even when the family, the bank and the investments are elsewhere. Family members can still hold other roles. The settlor may also be a trustee, beneficiary, protector or enforcer, but may not be the sole beneficiary of the trust they created (section 8). How far a settlor can keep control without undermining the trust is covered in how much control a settlor can keep.

How an offshore family trust is typically organised

The protector is optional. Section 24 allows the deed to appoint one, who may be an adult, including the settlor, or a legal person. Unless the deed says otherwise, the protector can remove and appoint trustees, fix the governing law and change the place of administration, without becoming a trustee. The details are in the role of a trust protector.

What a non-resident trust can do for a family

Used properly, a trust with a Mauritian trustee can serve several family aims:

• Continuity. Assets stay under one set of rules instead of passing through several national succession systems. A trust is also presumed irrevocable by the settlor unless the deed expressly provides for revocation (section 11), which supports stability.
• Governance. A professional trustee applies the deed and the settlor's non-binding wishes consistently over time, including after the settlor's death.
• Cross-border planning. For a family with members in several countries, a single trust can hold shared assets under a chosen governing law. See choosing the governing law of a trust.
• Discipline. The trustee must keep accounts and records, and the trust operates inside a regulated framework.

None of these aims is automatic. Each depends on the deed, the family's home country and the assets involved, which is why a tailored analysis matters more than the label.

How non-resident trusts are taxed

This is where the term "offshore" is most often misunderstood, and where the rules have changed.

Before 2021, a non-resident trust could rely on an exemption in section 46(3) of the Income Tax Act by filing a declaration of non-residence within 3 months of the end of the income year. The Finance Act 2021 repealed section 46(3), with deemed effect from 1 July 2021. The consolidated Act up to the Finance Act 2026 no longer contains that exemption.

Section 46(2) of the Income Tax Act still describes the trust whose settlor is non-resident (or holds a Global Business Licence) and whose beneficiaries are all non-resident (or hold a Global Business Licence), as well as a purpose trust whose purpose is carried out outside Mauritius. Such a trust is, however, taxed at the same 15% rate under Part IV. Under section 46(4), any distribution to a beneficiary is deemed to be a dividend in the beneficiary's hands.

The Finance Act 2021 also repealed the equivalent non-residence exemption for foundations (paragraphs 49A(2) and (3)), again with effect from 1 July 2021.

Whether distributions are then taxed in the beneficiary's own country depends on that country's law. For the Mauritian side, see how trusts are taxed in Mauritius and tax for non-resident beneficiaries. Because rates and conditions change with each Finance Act, check the current text with a tax adviser before relying on any of them.

Limits of an offshore trust

The foreign law and the Mauritian courts

Section 60 of the Trusts Act provides that a foreign trust is governed by its terms and its own law. It is not enforceable in Mauritius to the extent that it would amount to an offence, would be contrary to public policy, or would apply directly to immovable property in Mauritius. How Mauritius recognises foreign trusts explains the wider picture.

Substance matters

A trust that exists on paper while the settlor behaves as the real owner invites challenge. A court can look at who actually decides and benefits, as discussed in sham trusts and when a court sets them aside.

Home-country rules still apply

A settlor or beneficiary who is tax resident elsewhere may owe tax, or have reporting duties, in that country. Succession and matrimonial rules of the home country can also reach trust assets in some systems. Section 8 of the Trusts Act states that a transfer by a non-citizen settlor cannot be set aside under the succession rules of the settlor's domicile or nationality, but that protection operates under Mauritian law and may not be accepted everywhere.

Mauritian land

The Mauritian rules on land and real estate are strict. The Act declares void the transfer of Mauritian immovable property to a non-charitable purpose trust (section 19(3)), and a foreign trust cannot apply directly to Mauritian immovable property under section 60.

Duration

A trust other than a purpose trust may last for a maximum of 99 years from creation unless it ends earlier (section 9). Accumulating income is possible throughout that period but may not exceed 25 years where the trust holds immovable property in Mauritius (section 10).

Transparency, registers and confidentiality

An offshore trust today is a regulated, documented structure, not a secret one.

• Trustee records. Under section 38(3) of the Trusts Act, the trustee must keep up-to-date accounts and documents, and an alphabetical register of the names and last known addresses of each beneficiary and settlor. This covers a non-resident foreign trust the trustee administers. Accounting records must be kept for at least 5 years after the operations concerned are completed.
• FSC register. Section 26A of the Financial Services Act 2007 requires the FSC to keep a register of domestic and foreign trusts that have at least one qualified trustee. It holds, among other things, the deed and its amendments, the identity and addresses of beneficiaries, trustees, settlors, protectors and enforcers, the purpose, the governing law and the place of administration. Qualified trustees must supply the information in the form and time the FSC sets. Read more in whether a register of trusts exists in Mauritius.
• Beneficial ownership. Under the FIAMLA 2002, the beneficial owner of a trust-type arrangement includes the settlor, the trustee, any protector, each beneficiary (or class of beneficiaries) and anyone else exercising ultimate effective control.
• Banks. The trustee of an express trust must declare that capacity to a reporting person when entering a business relationship or carrying out an occasional transaction at or above the FIAMLA threshold (section 17C(5A)).

Confidentiality still exists, but within limits. Under section 33 of the Trusts Act, the trustee keeps information on the trust confidential, and a court orders disclosure only at the request of an investigating authority when the information is needed in good faith for an investigation or proceedings concerning a financial crime. See whether Mauritius trusts are confidential.

What this guide does not cover

Global Business Licence companies and other offshore corporate vehicles are different subjects with their own rules. Setting-up steps, costs and trustee selection are also outside this page. If you are weighing a trust against a foundation, the trust vs foundation comparison is a better next step.

If you want a qualified provider to look at your situation, you can send a request through the contact form.