The Settlor: Role and Limits

What is a settlor?

The settlor of a trust in Mauritius is the person who sets the trust up and puts assets into it. If you are asking "what is a settlor?", the short answer is: the founder of the arrangement, the one whose property and wishes give the trust its purpose.

Once the transfer is made, the assets are no longer held by the settlor in a personal capacity. They are held by the trustee for the beneficiaries, under the terms the settlor chose. The settlor is therefore the origin of the trust, not its day-to-day manager.

The legal framework is the Trusts Act 2001, explained in our overview of the Trusts Act. This page looks only at the settlor's side of it.

What a settlor does

A settlor's work is concentrated at the start, though some of it can echo for years.

• Decides to create the trust. The settlor chooses the purpose: providing for a spouse, children or grandchildren, holding a family business together, or organising succession.
• Transfers the assets. Property, shares, cash or other assets are moved to the trustee. Until the transfer, there is nothing for the trust to hold.
• Shapes the terms. The settlor, with advisers, settles the content of the trust deed: who may benefit, how the trustee may act, when the trust ends.
• Names the people around the trust. This usually means the trustee and the beneficiaries, and sometimes a protector.
• Explains intentions. Many settlors add a non-binding letter of wishes to guide the trustee's discretion.

Whether a particular design suits a family depends on its assets, its members and the countries involved. That is a matter for a qualified adviser, not for a general guide.

What a settlor can keep

The Trusts Act 2001 is relatively open about the settlor's other roles. Under section 8, the settlor may also be a trustee, a beneficiary, a protector or an enforcer of the trust they created.

That list has an important limit: the settlor cannot be the sole beneficiary of their own trust. At least someone else must have a genuine interest.

Other points that apply to a settlor who stays involved:

• A trustee role is capped by the rules on trustees. The Act sets a maximum number of trustees, with at least one qualified trustee at all times: four trustees at most, one of them a qualified trustee. A qualified trustee is an FSC-licensed corporate service provider (Management Licence) or another Mauritius-resident person authorised by the Financial Services Commission (FSC) to act as trustee. A settlor who also acts as trustee therefore does not remove the need for a licensed party where the structure requires one.
• Settlor and enforcer can be the same person; trustee and enforcer cannot. The same person may not be both trustee and enforcer of one trust.
• Protector status carries real powers. The Act allows the settlor to be the protector. Unless the deed says otherwise, a protector can remove and appoint trustees, set the governing law, change the place of administration and withhold consent to certain acts. See powers of a trust protector and the pillar page on the trust protector for that role in detail.

What a settlor gives up

The central idea of a trust is a real transfer of ownership to the trustee. This is why the settlor's position is often misunderstood.

Ownership and day-to-day control

After the transfer, the trustee holds legal title and must administer the assets according to the deed and the law. The settlor cannot simply treat the assets as their own. The duties of a trustee run to the beneficiaries and the trust terms, not to the settlor's changing preferences.

The ability to undo it

Under section 11 of the Trusts Act 2001, a trust is presumed irrevocable by the settlor and by the settlor's legal representative, unless the deed expressly provides for revocation. A settlor who wants flexibility must therefore plan for it in the deed from the beginning; it cannot be assumed afterwards. The trade-offs are covered in revocable vs irrevocable trusts.

Control that goes too far

A settlor may keep some powers, but if the settlor keeps so much that the trustee is merely following instructions, the arrangement can be questioned. The question of how much control is too much is examined in how much control a settlor can keep and in sham trusts.

Settlor, trustee, protector and beneficiary compared

The table below shows who normally does what. It is a general summary; the deed of each trust is what counts.

The beneficiaries are the people the trust ultimately serves, and their rights do not depend on the settlor's later mood.

How the roles fit together

Settlor and compliance obligations

A settlor in Mauritius should expect to be identified, and to stay identified, in several records. This is routine rather than a sign of difficulty.

• Trustee records. Under section 38(3) of the Trusts Act 2001, the trustee keeps up-to-date accounts and documents, plus an alphabetical register of the names and last known addresses of each beneficiary and settlor. Accounting records are kept for at least 5 years after completion of the relevant operations.
• The FSC register of trusts. Section 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. It includes, among other items, the identity and addresses of the settlors, trustees, beneficiaries, protectors and enforcers, together with the trust deed and its amendments. See whether there is a register of trusts in Mauritius.
• Beneficial ownership. Under the FIAMLA 2002, the beneficial owner of a trust-type legal arrangement includes the settlor, the trustee, any protector, each beneficiary (or class of beneficiaries and objects of a power) and any other natural person who ultimately exercises effective control, including through a chain of control. Banks and other reporting persons therefore ask for the settlor's details.
• Declaring trustee status. Under section 17C(5A) of the FIAMLA, a trustee of an express trust must declare that capacity to a reporting person when forming a business relationship, or when carrying out an occasional transaction of at least Rs 500 000 or the equivalent in foreign currency.

Confidentiality remains the starting point. Under section 33 of the Trusts Act 2001, as rewritten by Act 9/19 (in force on 29 May 2019), the trustee keeps information about the trust confidential, and a court orders disclosure only on the application of an investigating authority where the information is required in good faith for an investigation or proceedings relating to a financial crime. Details are in are Mauritius trusts confidential?.

Tax: what the settlor's residence changes

The Income Tax Act contains a provision, section 46(2), that still refers to a trust whose settlor is non-resident (or holds a Global Business Licence) and all of whose beneficiaries are non-resident (or hold a Global Business Licence), as well as a purpose trust whose purpose is carried out outside Mauritius. That trust is nevertheless taxed at the same 15% Part IV rate as other trusts.

The former exemption for non-resident trusts that filed a declaration (section 46(3)) was repealed by the Finance Act 2021, with deemed effect from 1 July 2021, and does not exist in the version of the Act consolidated up to the Finance Act 2026. A statement found in older material that a trust of a non-resident settlor is exempt should be treated as out of date.

Tax treatment depends on the facts and on the settlor's own country of residence, which may tax the settlor independently. Take advice before relying on any outcome. The wider picture is in how trusts are taxed in Mauritius.

Settlor limits in the wider legal setting

Two limits matter to families with links abroad or with heirs.

First, section 8 of the Trusts Act 2001 provides that a transfer made by a non-citizen settlor cannot be set aside under the succession rules of that settlor's domicile or nationality. This is a feature of the Mauritian statute, not a guarantee that every court worldwide will behave the same way.

Second, a foreign trust is governed by its own terms and law, but under section 60 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 in Mauritius.

For families with Mauritian heirs, the interplay with reserved shares is covered in forced heirship and trusts.

Practical checklist before becoming a settlor

• Write down the purpose of the trust and the people it should serve
• Decide which roles, if any, you wish to keep personally
• Check whether the deed should allow revocation, since the default is irrevocable
• Identify the assets to be transferred and any restrictions on them
• Choose a qualified trustee where the structure requires one
• Prepare a letter of wishes, kept separate from the deed
• Take tax and succession advice in every country that may be involved

If you would like an FSC-licensed corporate service provider (Management Licence) to look at your situation, you can send a request through the contact form.