Foundation
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Why should you register a foundation?
- South Africans are reactive when it comes to estate planning, with tax as the driver. South Africans don’t know of, and are therefore skeptical of, Foundations.
- But a Foundation might be suitable if you are looking for a versatile estate planning tool that can meet your family’s unique needs.
- A Foundation offers bishopric families a solution if heirs are living in countries where English Common law trusts are not well understood. (Even though countries like Spain, Portugal or the USA ‘accept’ trusts on a legislative level, they don’t always understand them.)
- A Foundation is managed by a council, which serves a similar function to that of a company’s board of directors. These council members are required to act in the best interest of the foundation.
- The yardstick by which we measure ‘best’ performance in a council member is not nearly as strict as a trustee.
- A Foundation gives a family a lot of control over the assets if they join the Council.
- Sometimes better suited than a trust because a foundation can trade, however if the volume of trading is going to be high, a 1@globalbusinesscompany.com (Make hyperlink) might be better suited to your needs.
- Purpose of a Foundation can be very wide in MUR, as long as it does not contravene any law. E.g., Trading of cannabis is illegal in Mauritius, therefore a Foundation may not hold any shares of companies that trade in cannabis.
- Beneficiaries have a right to information, accessible through the foundation secretary.
- Third party access to information can only be granted through permission from the secretary, therefore confidentiality is ensured.
- The founder of a foundation can be a beneficiary of said foundation and does not need to be a resident of Mauritius.
Scenario:
Parents are resident in South Africa, and have adult heirs all over the world, including USA. A US citizen cannot inherit from a South-African trust. Solution? A Mauritian Foundation as a beneficiary of the South African trust and the heir living in the United States as a beneficiary of the Mauritian foundation.
It is important to make sure the trust deed allows for this, but luckily FFG can provide the answers.
Tax:
Mail sent to C Wessels and Kevin. Awaiting response.
We will add this once we are sure we will be offering this product.
A Mauritian Foundation is a sound juristic person, meaning it is its own legal entity. A foundation contains characteristics of both a trust and a company. A Foundation has a Council that serves the function of a board of directors, and beneficiaries as found in a trust, thus a Foundation has no shareholders. It is the duty of the Council to act in the best interest of the Foundation. A Mauritian Foundation is based on the Foundations Act of 2012 and is registered with the registrar of Foundations. The document that registers a Foundation is known as the Charter. The Charter contains 3 important sets of information:
- Purpose and objectives of the Foundation.
- Who the council members and beneficiaries are.
- Details on management and administration.
The assets of a Foundation are obtained by an Endowment. The assets are usually allocated by the Founder or an executor via a will.
A Foundation needs to meet the following logistical requirements:
- In Mauritius a Foundation requires at least 1 council member that is ordinarily resident in Mauritius.
- A Foundation requires a qualified secretary (this role is fulfilled by a management company like FFG Mauritius)
- A Foundation requires a registered office in Mauritius, and this is where all records need to be kept and maintained.
Tax Residency:
- If the central management of a Foundation is not resident in MUR then a Foundation is not tax resident and only locally generated income will be taxed.
• If central management is in Mauritius, then a Foundation is tax resident and world-wide income is taxed.
Information Coming Soon