Trusts are legal structures that involve three main parties: “the settlor”, who transfers the legal title of property or assets, whether tangible (e.g. real property) or intangible (e.g. shares) to “the trustee”, who holds and administers the property/assets conferred to him and in accordance with the terms laid out in the trust deed, on behalf of and for the ultimate benefit of “the beneficiary”, the third party for whom the trust has originally being set up. In some cases, there can be no beneficiary but then the trust will be held for special purposes, for e.g. charitable purposes. Moreover the trustee may be an individual or a corporate body.
Trusts in Mauritius are generally governed by the Trusts Act 2001 which provides for the setting up and regulation of different types of trusts including protective or discretionary trust, charitable trust, purpose trust or foreign trust among many others.
Private Trust Company (PTC)
It is a company which is formed to work as a trustee for either one specific family Trust or for a group of related Trusts and its setting up and monitoring is governed by the Companies Act 2001 and the Financial Services Act 2007 (FSA) respectively.
A PTC acts as a trustee mainly for the benefit of families of substantial wealth, also called High Net Worth families and not for the general public. In this type of company, the settlor can exercise a greater degree of control over the trust affairs and distributions to the family members are made in accordance with the decided framework.
The board of directors of a PTC still has the responsibility to manage the trust assets and it may comprise of such people as family members, family advisers, trust professionals and specialists in this domain.
Note that a PTC can be registered either as a GBC1 or as a GBC2.
Very much similar to conventional trusts, offshore trusts are set up for the same purposes except that they are managed in another jurisdiction, thus in a offshore financial centre. The reason as to why offshore trusts are preferred for asset protection, wealth management and inheritance planning purposes is principally the higher degree of confidentiality maintained.