Traditionally, trusts have been the preferred planning tool in the context of wealth management planning for high net worth families. Mauritius law allows for the setting up of various types of trusts – fixed, discretionary, protective, purpose, spendthrift, Sharia-compliant and charitable trusts. A number of high net worth individuals (HNWI) and ultra-high net worth individuals (UHNWI) already use a Mauritius trust for estate, succession planning and family office services.
As for the recently enacted foundation legislation, it allows for foundations to be set up to benefit persons or a class of persons, and with a charitable or non-charitable purpose, or both. Foundations have some of the attractions of a trust vehicle, and can therefore potentially be used for purposes similar to trusts, as described above.
Both have their advantages and weaknesses, and probably equal worth. Trusts would continue to be preferred by clients from common law jurisdictions, whereas foundations would certainly appeal to those from civil law jurisdictions. Interestingly enough, they can be used together in the context of an estate plan, where there is a need, for example, to have an orphan structure. For instance, it is common to use a private foundation to hold the shares of a private trust company (PTC).
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