Mauritius trusts for U.S. citizens

The trust legislation and its organization

The Trusts Act supplies the statutory framework for trusts under Mauritius law. Section 3 describes a trust through a trustee's holding of property subject to fiduciary obligations for beneficiaries, purposes, or both.^[1]

The Act organizes its rules around creation, trust objects, and officeholders, then addresses trustee duties and powers. It also covers duration and governing law. Other provisions concern the trust instrument, beneficiary identification and administration of trust property.^[1]

Section 6 generally requires a written instrument, with exceptions for unit trusts, constructive trusts, resulting trusts and trusts arising by operation of law or judicial decision. The instrument identifies the trustee, the intention to establish the trust, its objects and beneficiaries, its property and its duration.^[1]

Trust types, duration and participant roles

Mauritius legislation describes trusts for beneficiaries and trusts for purposes, including charitable purposes. The FSC's explanation also identifies discretionary trusts, while section 20 expressly allows a charitable trust to operate on a discretionary basis.^[1][3]

A trust outside the purpose-trust category has a maximum duration of 99 years and can end earlier. Charitable and non-charitable purpose trusts may continue perpetually. Income accumulation is subject to the trust's maximum duration, with a 25-year limit where the property includes immovable property in Mauritius.^[1]

A purpose trust can exist without a beneficiary if its purpose meets the statutory conditions. The purpose must be specific and reasonable. It must also be achievable and consistent with law and public policy. The trust must provide for the designated officeholder and successor. It must have at least one qualified trustee and specify how surplus property is handled when the trust ends.^[1]

Section 20 defines charitable status by exclusive purposes, including poverty relief, education, religion, the environment, human rights and other public benefit purposes. The section permits charitable objects to be pursued within Mauritius or elsewhere, subject to its stated conditions.^[1]

A settlor with contractual capacity may establish a trust and may also occupy another role, including trustee or beneficiary. The settlor cannot be its sole beneficiary. Beneficiaries can be identified individually, through a class or through a relationship, and the terms may permit additions or exclusions.^[1]

The statutory maximum is four trustees, including at least one qualified trustee. A qualified trustee is a management company or another Mauritius-resident person authorized by the FSC to provide trusteeship services.^[1]

The instrument may establish a protector role with advisory powers and consent rights over trustee decisions. It may also divide custody and management between officeholders, with property vested in a custodian trustee and management functions assigned to a managing trustee.^[1]

FSC licensing and the public register

The Financial Services Commission licenses management companies that provide corporate or qualified trusteeship services under the Trusts Act. Its explanation places these activities within the management-company licensing framework under section 77 of the Financial Services Act.^[3]

The FSC directs readers to its Register of Licensees for licensed management companies. Its application materials distinguish a Management Company Licence from a Management Licence restricted to qualified or corporate trusteeship, with application forms, supporting documents and applicable fees.^[3]

Management companies act between clients and the FSC and have customer due diligence responsibilities. The FSC describes obligations to gather and check necessary client information. They must retain it and provide it to the Commission when requested.^[3]

Mauritius tax administration and records

The FSC describes a Mauritius Revenue Authority Tax Residence Certificate requirement for Category 1 Global Business Licence entities seeking treaty treatment. Its explanation states that those entities obtain the certificate from the MRA, and identifies a trust as one possible form of a Category 1 entity.^[3] Category 1 is the former licence label: Mauritius replaced its Category 1 and Category 2 global business licences with a single Global Business Licence from 2019, so current structures operate under the present licensing rules.

The Trusts Act requires accurate trusteeship accounts and transaction records. Required material includes books and registers, receipts, and invoices, as well as vouchers. It also includes contracts and agreements. These records must be retained for at least five years after the relevant transactions are completed.^[1]

CRS, FATCA and beneficial ownership records

The MRA's CRS materials connect tax identification numbers and tax residence information with reporting obligations for taxpayers and financial institutions. Mauritius implements the Common Reporting Standard through legislation and regulations, supported by related guidance.^[5]

Treasury's jurisdiction table records Mauritius with an agreement in force under Model 1. Treasury explains that FATCA requires foreign financial institutions to report information about accounts held by U.S. taxpayers and certain foreign entities with substantial U.S. taxpayer ownership.^[8]

Section 38 requires trustees to maintain an accurate register covering every trust under their trusteeship, including foreign trusts. Its contents include identifying information, governing documents and amendments, plus the trust's objects. The register also records governing law and place of administration.^[1]

The register includes names and address information for beneficiaries, beneficial owners, and trustees, as well as other persons exercising control. It also includes settlors and other specified officeholders. The qualified trustee reports the required information and changes to the FSC immediately, subject to a maximum of five working days.^[1]

U.S. foreign trust reporting regimes

U.S. citizenship brings a reader within the IRS definition of a U.S. person. The IRS describes separate income tax and information reporting consequences for U.S. persons establishing, owning, transferring property to or receiving distributions from foreign trusts.^[10]

The Form 3520 instructions classify a domestic trust through two requirements, U.S. court supervision of administration and U.S. person control of all substantial decisions. A trust outside that domestic definition is foreign for these purposes.^[11]

Form 3520 generally covers establishing a foreign trust, transferring property or making loans to it, receiving distributions or loans, using trust property without compensation, and ownership under the grantor trust rules. The instructions require an owner to complete Part II even without transactions during the reporting period.^[10][11]

A U.S. owner is responsible for ensuring that the foreign trust files Form 3520-A and supplies annual statements to U.S. owners and beneficiaries. If the trust does not file, the IRS requires the owner to attach a substitute Form 3520-A to a timely Form 3520.^[10]

Form 8938 may apply when a person's specified foreign financial assets exceed the applicable reporting thresholds. FBAR is a separate potential annual filing for a person with a financial interest in, or signature authority over, a foreign financial account.^[10]

Specified exceptions to Forms 3520 and 3520-A cover certain qualifying foreign benefit arrangements and eligible individuals. The IRS states that these exceptions leave other reporting obligations intact, including potentially applicable Form 8938 and FBAR filings.^[10]

A U.S. person treated as owner under the grantor trust rules generally reports the trust's income. A U.S. beneficiary receiving a foreign nongrantor trust distribution generally reports the beneficiary's share of distributable net income, with beneficiary statements supplying information about the distribution's tax treatment.^[10]

The statutory court and governing law

The Trusts Act identifies the Supreme Court as its statutory court. Section 69 assigns rulemaking authority to the Chief Justice after consultation with the Rules Committee and judges, including rules on Supreme Court practice and procedure under the Act.^[1]

The governing-law provisions begin with the law expressed in the terms or intended by the settlor. Without that selection, section 61 uses the closest connection at creation, with Mauritius law supplying the stated fallback when the identified law does not provide for the relevant trust category.^[1]

Occupation and residence permits

The Occupation Permit combines permission to work and reside in Mauritius for a renewable ten-year period. The EDB identifies four categories: Investor, Professional, Self Employed, and Investor for innovative start-up.^[7]

Retired non-citizens over 50, their dependents and dependents of Occupation Permit holders can apply for a Residence Permit.

More on Mauritius

Questions and answers

Related resources

Related glossary terms

• Trust: The Hague Convention describes a trust as a relationship in which a settlor places assets under a trustee's control for beneficiaries or a specified purpose.
• Settlor: A settlor is associated with creating a trust or placing property into it. Definitions describe the role through trust creation and property disposition.
• Corporate trustee: A corporate trustee is a corporation under Jersey law. The law explains how it acts for a trust and relates to an individual trustee or trust corporation.

Related articles and guides

• Jersey information exchange and U.S. trust reporting: Jersey sets CRS filing formats and the duties of reporting institutions, with separate FATCA and CRS reports and IRS foreign trust reporting for U.S. persons.
• Trust types and statutory regimes in The Bahamas: The Bahamas Trustee Act covers express and discretionary trusts, while the Purpose Trusts Act sets rules for authorised purpose trusts and their stated terms.
• BVI trust tax rules and U.S. reporting: The British Virgin Islands Trustee Act describes income tax treatment for trusts and beneficiaries. IRS rules address U.S. person reporting for foreign trusts.

Tools and official documents

• FinCEN Report 114 (FBAR): foreign account reporting: FinCEN Report 114 (FBAR) for U.S. citizens: account definitions, financial interests, signature authority, trust provisions and the filing requirements it sets.