Our Structures

Sociétés are set up under the Civil Code or Commercial Code. The participants’ interests are referred to as parts sociales. Sociétés are fiscally transparent and the partners’ liability can be limited. A société commerciale must be registered with the Registrar of Companies.

The disadvantage of sociétés is that they are based on a form of French partnership law, and French legal concepts and terminology are not understood by all investors.

A limited partnership is set up under the Limited Partnerships Act 2011. A limited partnership can elect to have legal personality and must have at least one general partner who is liable for all the debts and obligations of the partnership, and one limited partner who is liable only up to the maximum amount of its commitment.

A limited partnership can elect to have a separate legal personality. Irrespective of whether it has elected to have a legal personality, the partners are still liable for the partnership’s debts (general partners have unlimited liability whereas limited partners are liable to the extent of their contribution or other agreement). A limited partnership can be set up and registered within three working days.

A limited liability partnership (LLP), introduced by the Limited Liability Partnerships Act 2016 (LLP Act), is a relatively new type of partnership vehicle. It combines features of both a company and a limited partnership. It can be used to offer professional or consultancy services and also legal services under a Global Legal Advisory Services Licence issued by the Financial Services Commission (FSC).

An LLP can be set up by two or more partners. The LLP Act also provides for the conversion of an existing entity or unincorporated body to an LLP and the re-domiciliation of foreign LLPs or Mauritian LLPs to and from Mauritius.

There are no restrictions on the residency of the partners and a partner can be an individual, an entity or an unincorporated body.

The LLP must appoint a manager, resident in Mauritius at all times. This must be a local management company if the LLP holds a Global Business Licence, or a person qualified as a secretary if this is not the case.

The LLP must be registered with the Registrar of LLPs. A partnership agreement must be put in place by the partners providing for the governance of the LLP and the rights and duties of the partners. The records of an LLP that holds a Global Business Licence filed with the Registrar of LLPs are not available for inspection, and its audited financial statements must be filed with the FSC.

A foundation is set up under the Foundations Act 2012. A foundation can be set up for any purpose specified in its charter, provided its objects are not contrary to the laws of Mauritius. Purposes can be charitable, non-charitable or both, and for the benefit of a person or a class of persons to carry out a specified purpose, or both. A foundation can be set up within three working days.

On the other hand, a Foundation is a newer concept in common law jurisdictions and appeals to clients based in civil law territories where they are well known and understood. It is considered, by virtue of its characteristics, a hybrid between a company and a trust and is required to be registered with the Mauritian Registrar of Foundations. The most distinguishing feature of a Foundation in comparison to a Trust is that a Foundation has a separate legal personality which means that it can hold assets and is capable of suing or being sued in its own name, unlike a Trust where the assets are held by the Trustee. When it comes to holding high risk or speculative assets, a foundation may thus be a preferable option.

The purposes and objectives, the administration, the management, and the powers vested in each party of a Foundation are set out in the Foundation Charter. A Foundation is governed by a Council, which functions similarly to a company’s board of directors it is the decision-making body of the Foundation. The Founder can be on the council, maintain a greater degree of control of the assets, and be involved in decision making, in contrast to a Trust where there is a possibility of settlor-reserved power which may lead to sham issues. A Foundation can therefore be a good option for wealthy families in Africa who are uncomfortable with giving away total control of their assets to a third-party Trustee. Besides, a Foundation also provides continuity and ease of succession because they have an indefinite existence once established and do not come with the same impermanence of the Trust.

Mauritius has a tax regime that is ideal for estate planning and asset management. The income tax treatment for both Foundations and Trusts is the same and there is no inheritance or estate tax applicable in Mauritius. A Trust and a Foundation are treated as non-residence for tax purposes if their central management and control is outside of Mauritius and are taxed on Mauritius sourced income only. On the contrary, if they are resident in Mauritius, they will be taxed on their worldwide income.

Although there are a few key differences between a Trust and a Foundation, they both can be used to achieve similar objectives such as asset protection, tax planning, succession planning, accumulation and preservation of wealth, charitable or philanthropic aims, amongst others. Each situation must be assessed on its own merits when determining which structure to make use of, considering criteria such as the objective, the jurisdiction of establishment and the level of control that is required over the assets.

A Protected Cell Company (PCC) or (Segregated Portfolio Company (SPC) as it is known in jurisdictions such as Cayman Islands, Guernsey, Luxembourg and Bermuda) is a single legal entity within which may be established various cells. The assets and liabilities of each cell are legally separate from those of the other cells.

The PCC is a single legal entity and the cells are not independent legal entities separate from it.
A PCC operates in two distinct parts. These distinct parts are the Core and the Cells. There is (and must only be) one Core, but there may be an infinite number of Cells; Cellular shares are issued, as required, under different names or numbers so as to identify, and to represent, the particular Cells to which they are attributable. Alternatively, each Cell may be given an identifying number, rather than a name.

Where assets have been allocated to a particular cell, those assets are held exclusively for the benefit of the owners of the particular cell and any counterparty to a transaction linked to this cell. Only persons who have entered into transactions with the cell, or who otherwise have become creditors of the cell concerned, will have recourse to that cell’s assets. Any asset which attaches to a particular cell is not available to meet liabilities of the PCC or any of the other cells.

Advantage of the PCC concept
The legal segregation of the assets and liabilities of each cell, particularly with respect to creditor recourse, enables the PCC to be used in many circumstances where previously a group structure of various companies may have been required. It is less expensive and less unwieldy than forming numerous subsidiary companies and it avoids the need for explicit limited recourse provisions in contracts with third parties and the issues associated with such provisions.

Range of applications
The PCC legislation represents a major opportunity for many international businesses. Prospective uses include “master-feeder”, umbrella or other mutual fund structures, providing for multiple classes of shares and multiple investment options, property development companies, asset holding, structured finance business, replacement for operating subsidiaries or divisions of any company, insurance business including captive insurance and re-insurance and facilitation of product line or geographic segmentation.

• A PCC must have a Global Business License, with one exception: Real estate investments are also permitted in a PCC as a Domestic Company.
  Activities
• A PCC can be setup either as an asset holding or as an investment holding. A mixture in between is not permitted.

The incorporation procedure for a PCC is similar to that of a GBC.
Turnaround time for registration and licensing of a PCC varies between 1 to 3 weeks depending on the proposed activity.

Shareholders

• The shareholders of the core and of the cells can be non resident of Mauritius. The minimum of shareholders is one.
• Directors & management
• At least two directors must be appointed who are resident in Mauritius. They must be of sufficient calibre to exercise independence of mind and judgement.
• The management board is the same for the entire PCC structure. The shareholders of the core are in control of the management. On the other hand, the shareholders of the cells have no influence
• Additional directors can be assigned to specific cells. Here, the shareholders of the cell can have a (limited) influence.

Registered office

• A PCC shall, at all times, have a registered office in Mauritius which shall be a management company.
• Administration
• A PCC shall, at all times, be administered by a management company.
• Bank account
• A PCC’s principal bank account shall be maintained in Mauritius at all times.
• Bank accounts can be held in any convertible currency.

Effective management

Must be in Mauritius. Substance requirements include:
• Employment, either directly or indirectly, of a reasonable nmumber of suitable qualified persons to carry out the core activities;
• A minimum level of expenditure, which is proportionate to its level of activities.
The assessment by the FSC will be made on a case by case basis. However, the FSC has released some indicative guidelines.

Accounting & audit
Audited financial statements must be filed with the FSC annually. Auditing is compulsory .

Taxation

• The same rules apply for a PCC as for a GBC.
• Each cell is taxed separately.

Conclusion
The legislation pertaining to PCCs represents a major opportunity for many international businesses, particularly in the mutual fund and insurance industries, to exploit a structure allowing for cost effective and efficient segregation of assets and liabilities within a single legal entity.

Our team can structure and administer a wide range of trusts including discretionary trusts, fixed interest trusts, charitable and non-charitable purpose trusts and commercial trust structures to suit your individual needs and circumstances.
A trust is a powerful tool for succession planning, asset protection, taxation and family wealth management purposes. They allow you to direct how your assets are managed during your life and after your death.

Trusts can be used in a variety of ways including:
• Controlling asset distributions (especially for minor children) over time
• Protecting heirs from family disputes
• Providing for a disabled or special needs family member
• Charitable donations
• Managing assets in the event you become incapacitated

We provide professional fiduciary services to help ensure the legacy you desire is carried out according to your wishes.

We can take care of the step-by-step details of maintaining, monitoring and reporting for you, including:
Administration • Maintain thorough records
• Providing required statements to beneficiaries
• Gathering and updating information on all trust beneficiaries
• Paying bills
• Managing service level agreements defined by the client
Accounting and tax reporting • Tracking and reporting trust principal and income accounting
• Preparing and filing fiduciary income tax returns
• Collecting income from trust assets
• Disbursing funds in accordance with the trust agreement
• Providing tax reporting to beneficiaries

Trust vs. Foundation Comparison Table
Description A three-party relationship where a “settlor,” (a.k.a. “grantor” or “trustor,”) transfers assets to a “trustee,” who hold assets for the “beneficiaries.” The trustee must follow the terms of the trust and act in the best interest of the other parties. Depending on the trust purpose, one party can hold one or more of the three roles. A foundation an stand-alone legal entity that is separate from the assets of the founder. It is not a company. It does not issue shares. It does not have owners. It is a nonprofit organization. It usually gives support to others through grants directly or to other charities. Some foundations engage in other activities besides grantmaking.

Examples -Parents who make a trust so that their children and grandchildren receive their assets after they die.
-People who have concerns about lawsuits, setup an asset protection trust to keep assets away from creditors.
-Those who want to own real estate privately transfer property into a land trust.
-An elderly person sets up a Medicaid trust and transfer all assets into the trust so that (after a 5-year holding period) personal assets do not exceed amount that qualifies for Medicaid support. Individuals, families, companies or public entities (such as hospitals and churches) set up foundations to support a charitable cause such as childhood disease, hunger, education, general healthcare, etc. Some well-known foundations include The Make-A-Wish Foundation, The Bill and Melinda Gates Foundation, PBS Foundation, Rockefeller Foundation, Nobel Foundation, Walton Family Foundation
Legal Origin Common law (England) Civil law (mainland Europe)

Who Originates the Organization? Settlor (AKA Grantor, Trustor) Founder?

• Founding Document Trust deed Charter
• Manager Trustee Board of Directors (AKA counsel) Also typically has a Chief Executive and other officers)
• Manager Role Role of trustee

Follows terms of the trust

• Administers trust according to the trust agreement
• Making decisions that follow trust guidelines
• Preparing or delegating creation of records, statements as needed
• Communicating with beneficiaries
• Answering questions of beneficiaries Role of board of directors
• Decides its organizational direction
• Make sure it follows its mission.
• Establishes the ethics standards
• Monitors its results
• Insures responsible management

Ownership Type Beneficial interest (beneficiaries essentially “own” the trust) Has no owners (there are no shareholders).
How Assets are Titled [Trustee name], as trustee of [name of trust] In name of foundation
Publicly filed? Certificate of trust but not the trust itself Publicly filed similar to a corporation
Common Types -Asset protection (offshore and domestic)

• Estate planning (living trust or inter vivos trust)
• Real estate (land trust)
• Personal property (automobiles, household goods, etc.)
• Charitable
• Special needs (for those with disabilities) -Independent (Usually funded by individual or family)
• Corporate (Funded by a corporation but is a separate legal entity. Often corporate officers manage and may give endowments)
• Operating (Purpose may be research, public benefit, etc. Most funds or grants go toward purpose stated in its charter).
• Taxation Two broad tax categories are “Simple” trusts and “Complex” trusts. With simple trusts, the parties associated with the trust (settlor, beneficiary) pay taxes on trust profits. With complex trusts, the trust, itself, pays taxes on trust profits. In tax Reform Act of 1969 private foundations are exempt from most taxation by providing social benefits under the following criterion. (1) The foundation must pay at least 5% of the value of its endowment and none of it must be to the benefit of a private individual. (2) It must not own/operate a for-profit business. (3) It needs to file detailed reports and conduct audits each year. (4) It must meet accounting requirements of nonprofit organizations.
  The operating and administrative expenses count toward the 5% minimum annual outgo

FAMILY TRUST

• Trusts have a long history of use as a means for individuals and families to control how their assets are held and transferred as part of succession planning.
• A trust is referred to as Family Trust when the beneficiaries are linked via family relationships.
• Family trust are often used by families as a tool for succession and/or legacy planning, and the underlying assets held may vary from one family to another. Discretionary Trust and Fixed Interests Trust are some of the most common types of trust.
• There are several benefits in setting up a family trust. For example, each trust can be revocable or irrevocable and can be customisable to include protector provisions to ensure that there is a form of oversight by an independent party.
• Unlike a will, it avoids the need to carry out probate and obtain grant letters of administration (or its equivalent) on the demise of the Settlor.
• Upon the Settlor’s demise, automatic succession by the beneficiaries to the underlying assets of the Trust can be distributed in accordance to the terms of the Trust Deed or at the discretion of the trustee, based on the wishes of the Settlor.

INSURANCE TRUST
• The Settlor (the insured person) will transfer his Life Insurance Policy to the Trustee by way of assignment for the Trustee to hold the insurance as the Trust’s assets for the benefit of the Trust’s beneficiaries.
• Upon the demise of the policy holder, the insurance proceeds received from the insurance policies are managed, protected and kept by the Trustee for the benefit of the beneficiaries of the Trust.
• Offers great flexibility in distribution of the insurance proceeds to the beneficiaries in accordance with the Settlor’s wishes.
• Distribution can be made in the form of financing their education needs, living, and medical expenses, etc.

TRUST ADMINISTRATION SERVICE
• Manage assets placed in a trust with reasonable care and skill.
• Make investment in accordance with the terms of the Trust Deed.
• Open, administer and monitor various designated accounts and reports on bank balances and accounts.
• Handling all administrative tasks such as making payments, miscellaneous services, legal, and tax related matters.
• Distribution of assets to the beneficiaries in accordance with the trustee’s resolutions.

PRIVATE TRUST COMPANY (“PTC”)
• A PTC is a company whose sole purpose is to provide trust services to specific trusts or specific group of trusts.
• PTC can only act as Trustee of such a Trust if each beneficiary of the trust is essentially connected by blood, marriage, or adoption.
• A PTC structure is a trust structure used by high net worth individuals wishing to establish their own trust company to hold and manage their assets, usually with the assistance of family members and trusted advisers.
• A PTC is exempt under Section 15(d) of the Trust Companies Act from the requirement to hold a trust business licence. However, it is mandatory for the PTC to engage a licensed trust company to carry out trust administration services for the purposes of conducting necessary checks to comply with any written direction issued by MAS on the prevention of AML/CFT (Section 4(2) Trust Companies (Exemption) Regulations 2005 (“compliance checks”).
• As a licensed trust company, ZICO Trust can assist with the set-up of PTC structures and be appointed as an administrator to assist the PTC in carrying out compliance checks.
• A PTC structure allows the settlor, his family members, and trusted advisers to oversee the conduct of the trust and family business. This structure is suited for families who want to retain a high degree of control in management of the family assets/business but is keen on having the benefits of these assets being held by a trust.