Mauritius family office licensing regime

Vanessen A. Palanee
13 July 2017

The 2016-2017 Budget of the Government of Mauritius, saw the announcement of a number of measures designed to further enhance the attractiveness of the Mauritius financial services sector. Amongst these initiatives was the creation of a new Overseas Family Corporation licence aimed at the growing market for family offices amongst wealthy families worldwide.

In this article Vanessen Palanee, Associate Director, Minerva Fiduciary Services (Mauritius) Limited looks at how Mauritius has positioned itself and what benefits it presents for families looking to establish a family office on the island.

Around the world, wealth in the hands of private families continues to grow. Reports such as the Capgemini / Royal Bank of Canada World Wealth Report forecast this trend will continue and that such wealth will be more widely spread geographically. This supports what we are seeing with more families expressing an interest in creating their own family office, relying on firms such as Minerva to provide supporting services.

But what is a family office? There is no single definition however most would agree that at its heart is a structure that provides for the long term, and has components including family governance, asset management, tax planning, succession planning, philanthropic activity and concierge type activity. Family involvement will vary, as will the extent to which some of these services are undertaken in-house by employees of the family office or are outsourced to professional service providers.

Mauritius has for many years had the infrastructure to support family office arrangements however the measures in last year’s budget saw the creation of two specific licencing regimes regulated by the Mauritius Financial Services Commission:

  • Single Overseas Family Office
    The Overseas Family Office (Single) Licence allows the entity to manage the affairs of only one family
  • Multiple Overseas Family Office
    The Overseas Family Office (Multiple) Licence allows the management of the affairs of several families.

The table below summarises the eligibility criteria and tax benefit; it should be noted that the applicant is required to have a physical office with a minimum number of employees and a minimum volume of assets under management in Mauritius.

The Overseas Family Office regimes give access to a range of benefits and incentives including:

  • Access to Mauritius’ extensive double tax treaties;
  • Opportunity to live and work in a desirable, socially and politically stable location with good infrastructure;
  • Opportunity to acquire immovable property in Mauritius;
  • Tax holiday of 5 years on income sourced from activities conducted under the licences, provided the substance requirements are satisfied;
  • Mauritius residence permit may be granted to the respective spouse, children up to the age of 24 and common law partners.

Professionalising the administration of family wealth through a modern family office now goes beyond just helping the family protect its assets for current and successive generations. The modern family office is now far more proactive in its approach to wealth management. Alongside traditional asset classes it is likely to hold private equity and hedge fund investments amongst its assets, and often invest in concert with other family offices. It also has to meet the demands of an increasingly complex global landscape, with tax and reporting responsibilities in multiple jurisdictions quite likely for a large, geographically dispersed family.

This complexity gives rise to greater dependency on specialist service providers and advisers. Such services can be sourced globally however Mauritius offers all the components a well-advised family needs to effectively structure ownership of its global wealth. Such components will include private trust companies, foundations, cell companies, specialist funds, limited partnerships and families find it reassuring these are administered in a highly regulated manner in a well established international financial centre.

In addition to a strong trust and corporate services sector, Mauritius has the full breadth of supporting professional services infrastructure needed to meet the normal requirements of families establishing offices on the island. For a family office, Mauritius can be a ‘one-stop’ shop.

Contacts

“This shows the professionalism of Minerva.”

Family Office, Bahrain