Family Office

The family office model in Mauritius has evolved significantly. Initially focused on investment management and asset allocation, family offices have expanded to offer a wide range of services, including:

• tax planning;
• risk management;
• estate planning; and
• philanthropy.

The introduction of the Family Office (Single) and Family Office (Multiple) licences in 2016 further consolidated Mauritius' position as a preferred destination for wealth management.

High-net-worth or ultra-high-net-worth families typically opt to set up family offices in Mauritius. Common reasons include:

• wealth preservation;
• succession planning; and
• the management of complex family affairs.

Over time, the appeal has grown due to Mauritius':

• favourable tax regime;
• political stability; and
• strategic location.

Given that there are specific licences for family office, independent family offices are now the providers of such services in Mauritius.

Family offices in Mauritius are typically located in major financial hubs such as Ebene and Port Louis.

The Mauritian government has been supportive of family offices, in particular through measures such as:

• introducing the family office licence; and
• offering a 10-year tax holiday for qualifying family offices.

These incentives aim to attract more high-net-worth individuals and families to establish family offices in Mauritius.

Family offices in Mauritius operate specifically under the Financial Services (Family Office) Rules 2020 and within a broader regulatory environment rather than any other specific industry codes of conduct exclusively for family offices. The regulatory regime involves the following elements:

• Regulation under the Financial Services (Family Office) Rules 2020: Family offices in Mauritius are governed by the Financial Services (Family Office) Rules 2020, which outline the regulatory framework and standards for providing family office services. These rules ensure that family offices operate with transparency and integrity, and in compliance with international standards.
• Anti-money laundering and counter-terrorism financing: Family offices must comply with the legal and regulatory framework on anti-money laundering and counter-terrorism financing.
• Tax and legal compliance and reporting.
• Data protection and privacy: Family offices must comply with the Data Protection Act 2017, which covers:
• • the rights of data subjects;
  • data security;
  • the right of access; and
  • consent for data processing.

In Mauritius, there are two types of family office models:

• Single family office (SFO):
• • Advantages: Provides highly personalised services tailored to one family's needs. Offers complete control and confidentiality.
  • Disadvantages: Can be costly to maintain due to the need for dedicated staff and resources.
• Multi-family office (MFO):
• • Advantages: Shares costs among multiple families, making it more cost-effective. Provides a broader range of expertise and services.
  • Disadvantages: Less personalised compared to SFOs and there might be less confidentiality.

By virtue of their licences, family offices in Mauritius are allowed to provide a range of services, including but not limited to:

• administration and management of investments, assets and/or estate(s);
• administration and management of concierge services;
• management of accounting and reporting;
• administration and management of philanthropic services;
• provision of training and development to the incoming generations;
• administration and management of disaster recovery planning;
• administration of risk management;
• provision of administrative support;
• assistance with compliance with domestic and international legislation;
• establishment of family governance, wealth strategies and family board(s), including family charter(s);
• tax advisory and compliance services;
• advice on wealth planning and protection.

The services provided can vary depending on the type of family office model.

When selecting the most appropriate family office model, families should consider the following factors:

• Wealth level: Higher wealth levels might justify the cost of an SFO for personalised services.
• Family needs: Specific needs such as investment management, tax planning and estate planning should be considered.
• Cost: The cost of maintaining the office should be evaluated and compared with the benefits received.
• Confidentiality: The level of confidentiality required for family affairs should be determined.
• Flexibility: Consideration should be given to how flexible the office needs to be in terms of services and scalability.
• Long-term goals: The family office structure should be aligned with long-term legacy and wealth preservation goals.

In Mauritius, family offices are most commonly structured as:

• companies limited by shares; or
• trusts.

Companies limited by shares:

• limit the liability of the shareholders;
• do not expose the assets of the shareholders to the liabilities of the company;
• provide flexibility in the governance structure; and
• benefit from the attractive tax rates and tax benefits available in Mauritius.

However, there are ongoing filings to be made and service providers to be hired, which adds to the operational costs.

Trusts are amazing for asset protection, estate planning and tax benefits. However, it is costly to set up and maintain a trust, as the compliance and management costs may be quite high.

All these structures are indeed available to families based outside Mauritius.

Selecting the right ownership structure for a family office in Mauritius hinges on various crucial factors, including the following:

• Wealth size and complexity significantly influence the choice.
• Legal liability protection is paramount. Companies limited by shares offer limited liability, ensuring that family members' personal assets are shielded from business liabilities.
• Tax efficiency is vital for families managing investments.
• Governance and control are also pivotal considerations. Families desiring more flexibility and direct control over day-to-day activities may lean towards a company limited by shares.
• For non-resident families, cross-border tax planning and adherence to international tax treaties are critical.

To establish a family office in Mauritius, the first step is to set up the legal structure, which will require a different process depending on the structure chosen.

Thereafter, the following formal and substantive requirements are applicable:

• Licensing: A Family Office (Single) or Family Office (Multiple) licence should be obtained from the Financial Services Commission.
• Wealth base: The aggregate value of assets and/or investments under the management of a single family office (SFO) or multi-family office (MFO) should be at least $5 million.
• Professional staff: A family office must at all times have:
• • a designated officer;
  • a money-laundering reporting officer; and
  • a deputy money-laundering officer.
• Minimum stated unimpaired capital: An SFO should at all times maintain a fully paid minimum unimpaired capital of at least $35,000; whereas an MFO should at all times maintain a fully paid minimum unimpaired capital of at least $70,000.
• Professional indemnity cover: A family office should subscribe to such insurance policies as are necessary to cover:
• • fraudulent activities of employees;
  • fraudulent instructions;
  • losses arising from the malicious or fraudulent corruption of electronic data or electronic transactions;
  • liabilities arising from breaches of professional duties; and
  • any other activities as the SFO or MFO deems appropriate.
• Risk management: A family office should develop and adopt an integrated risk management approach, which must be reviewed on a yearly basis.

The costs involved in establishing and operating a family office in Mauritius can vary depending on the chosen model and structure, as well as the services provided:

• Set-up fees: The fees involved in setting up the legal structure that will be licensed as a family office will vary depending on:
• • the type of structure chosen; and
  • the services providers involved.
• Licensing fees:
• • SFOs: $2,500 for processing and $5,000 in annual fees.
  • MFOs: $5,000 for processing and $10,000 in annual fees.
• Professional fees: The costs of hiring statutory service providers, professionals with expertise in wealth management, legal, accounting and other services will also vary depending on:
• • the level of services required; and
  • the service providers engaged.

Both SFOs and MFOs must comply with:

• the Financial Services (Family Office) Rules 2020;
• anti-money laundering/countering the financing of terrorism laws;
• data protection laws;
• tax reporting laws; and
• depending on the structure chosen, compliance and reporting requirements under the larger legal and regulatory framework applicable to entities in Mauritius generally.

When establishing and operating a family office in Mauritius, the following should be considered:

• Wealth structuring: Incorporate trusts or other legal structures for wealth protection and longevity.
• Global connectivity: Utilise Mauritius' strategic location for cross-border investments and access to international markets.
• Professional service providers: Engage reputable legal and financial service providers to navigate regulatory requirements.
• Long-term planning: When establishing and operating a family office in Mauritius, tax optimisation and planning for worldwide assets can be crucial. Taking into account the network of double taxation avoidance treaties to which Mauritius is a party is essential.

While we do not foresee any specific risks linked to Mauritius as such, the following should be taken into account generally:

• Key risks:
• • Geopolitical and macroeconomic risks: Changes in global political and economic landscapes can impact investments and wealth management.
  • Legal and regulatory risks: Compliance with local and international laws and regulations is crucial.
  • Technological risks: Cybersecurity threats and the need for technological advancements should be addressed.
  • Intergenerational communication issues: Smooth communication and transition between generations should be ensured.
  • Concentrated decision making: Over-reliance on a few key individuals should be avoided.
• Mitigation processes:
• • Risk management framework: Have a comprehensive risk management framework to identify, assess and mitigate risks.
  • Regular audits and reviews: Conduct regular audits and reviews of financial and operational activities.
  • Diversification: Diversify investments and decision-making responsibilities.
  • Training and development: Provide ongoing training for family members and staff on risk management and governance.

While there is no statutory documentation in this regard, typically family charters are established to guide the activities of the clients of the family office. In practice, the process as to how a family charter should be developed and updated is as follows.

Drafting the family charter:

• The input of all family members should be sought in the process to create a sense of ownership and commitment.
• The core values of the family should be defined.
• Family goals should identify short-term and long-term goals for the family. These could relate to:
• • education;
  • health;
  • finances; or
  • personal development.
• The family charter should also clearly define each family member's roles and responsibilities.
• A process for resolving conflicts should also be established. This could include:
• • rules for communication;
  • steps for addressing disagreements; and
  • methods for finding solutions.

Updating the family charter: Regular reviews should be planned via regular family meetings to review the charter. These could be:

• annual;
• bi-annual; or
• whenever there are significant changes in the family dynamics.

Since there is no statutory requirement to update the charter regularly, it will ultimately be up to the family to decide what best suits its needs.

Mauritian laws do not expressly provide for specific ways to communicate with key stakeholders, which affords flexibility to the family office to determine, together with the family, the best way to communicate.

• Family council: A family council can oversee the activities of the family office.
• Independent auditors: Engage independent auditors to review financial statements and operations.
• External advisers: Engage legal and tax experts to provide additional assistance in compliance and complex matters.
• Board of directors: Establish a board of directors with family members and external experts.

Transparency towards the family is a cornerstone of solid governance. Regularly updating the family on financial performance, investments and strategic decisions fosters trust.

Additionally, effective risk management plays a critical role, addressing financial, legal, operational and reputational risks. Incorporating regular audits, compliance reviews and risk assessments into the governance framework is essential for safeguarding the family office's operations.

Aligning the interests of family office staff and external advisers with those of the family is another crucial aspect. Implementing compensation structures, performance incentives and clear conflict-of-interest policies ensures that everyone is working towards the same goals.

Clear decision-making structures are vital for defining roles and responsibilities, preventing confusion or conflicts among family members and advisers. It is also important to establish conflict resolution mechanisms to manage differing views on:

• investments;
• succession; and
• family goals.

Succession planning is key to smooth generational transitions, helping to avoid disputes and ensure continuity in leadership and decision making. Understanding that a well-defined plan can safeguard the family's legacy and future prosperity is essential.

Finally, regulatory compliance with both Mauritian and international laws is crucial. Regular audits and legal reviews ensure that the family office operates within the law.

Balancing these considerations will ensure that a family office runs smoothly and maintains the trust and support of the family it serves.

(a) Investment and wealth management

• Diversification: Ensure a well-diversified portfolio to mitigate risks.
• Regulatory compliance: Adhere to local and international regulations.
• Performance monitoring: Regularly review investment performance and adjust strategies.

(b) Tax management

• Double taxation agreements: Leverage Mauritius' extensive network of double taxation agreements to minimise tax liabilities.
• Tax efficiency: Structure investments and assets to optimise tax efficiency.
• Compliance: Ensure compliance with local and international tax laws.

(c) Succession planning

• Family governance: Establish clear governance structures to manage family wealth.
• Wealth transfer: Plan for the seamless transfer of wealth to the next generation.
• Conflict resolution: Address potential family disputes related to wealth distribution.

(d) Estate planning

• Asset protection: Implement strategies to protect family assets.
• Legal framework: Utilise Mauritius' robust legal framework for estate planning.
• Philanthropy: Incorporate philanthropic goals into estate planning.

(e) Management of real estate

• Property management: Efficiently manage real estate holdings.
• Market trends: Stay informed about local and international real estate market trends.
• Maintenance: Ensure proper maintenance and upkeep of properties.

(f) Management of luxury assets

• Maintenance and upkeep: Ensure regular maintenance of luxury assets such as private jets, yachts, and art collections.
• Insurance: Secure comprehensive insurance coverage for luxury assets.
• Regulatory compliance: Adhere to regulations related to the ownership and use of luxury assets.

(g) Reputational management

• Public image: Maintain a positive public image and manage media relations.
• Crisis management: Prepare for and manage potential reputational crises.
• Community engagement: Engage with the community and participate in philanthropic activities.

(h) Education and development of upcoming generations

• Financial literacy: Provide education on financial management and investment.
• Leadership training: Develop leadership skills in younger family members.
• Career guidance: Offer guidance on career paths and professional development.

(i) Hiring and management of staff

• Recruitment: Hire qualified and trustworthy staff for various roles.
• Training and development: Provide ongoing training and professional development.
• Performance management: Regularly evaluate staff performance and address any issues.

(j) Other

• Risk management: Implement strategies to mitigate various risks.
• Technology integration: Leverage technology for efficient management and communication.
• Sustainability: Incorporate sustainable practices in all activities.

Philanthropy in Mauritius typically takes several forms:

• Charitable foundations: Established under the Foundation Act 2012, these foundations can be either charitable or non-charitable. Charitable foundations focus on areas such as:
• • poverty relief;
  • education;
  • environmental protection; and
  • human rights.
• Donations and grants: Direct financial contributions to non-profit organisations and community projects.
• Corporate social responsibility (CSR): Since 2009, profit-making entities have been required to:
• • devote 2% of their profits to CSR; or
  • invest these funds in social and environmental projects.
• Crowdfunding: Leveraging online platforms to raise funds for specific causes.

• Advantages:
• • Tax benefits: Charitable foundations are exempt from income tax in Mauritius. Donations made to charitable institutions of up to $2,000 also provide individual donors with the possibility to deduct such donations from their net income.
  • Positive public image: Philanthropy enhances the reputation of individuals and businesses.
  • Community impact: Philanthropy directly addresses social issues and supports community development.
• Disadvantages:
• • Administrative costs: Managing philanthropic activities can be costly.
  • Regulatory compliance: Ensuring compliance with legal and regulatory requirements can be complex.
  • Impact measurement: Measuring the actual impact of philanthropic activities can be challenging.

Impact investing is becoming increasingly embedded in Mauritius. The country's business, legal and regulatory framework supports the set-up of impact funds. Mauritius serves as a platform for over 600 funds focused on Africa, many of which have an impact agenda.

Key concerns include the following:

• Impact measurement: Ensuring that investments are achieving their intended social and environmental outcomes is difficult to measure.
• Sustainability: Ensuring that investments are sustainable in the long term is another concern, as the trade-off between profit and social impact is often a delicate balance to achieve for investors.

The ESG agenda is shaping the activities of family offices in Mauritius by promoting sustainable and responsible investment practices. Family offices are increasingly incorporating ESG criteria into their investment decisions and operations.

Key concerns include the following:

• Regulatory framework: Understanding and complying with ESG-related regulations might not be simple for all parties involved.
• Stakeholder expectations: Meeting the expectations of stakeholders that prioritise ESG factors against those looking to solely maximise profits is a delicate issue.

• Alignment with global standards: Ensure that philanthropic and ESG activities align with global standards and best practices.
• Community engagement: Actively engage with local communities to understand their needs and priorities.
• Long-term impact: Focus on creating long-term, sustainable impact rather than short-term gains.
• Collaboration: Partner with other organisations and stakeholders to amplify the impact of philanthropic and ESG activities.

The key personnel will depend on:

• the structure chosen for the family office; and
• whether it is a single family office or a multi-family office.

To attract talent to a family office in Mauritius, consider the following strategies:

• Competitive compensation: Offer attractive salaries and benefits.
• Career development: Provide opportunities for professional growth and development.
• Work-life balance: Promote a healthy work-life balance to attract top talent.
• Cultural fit: Emphasise the importance of cultural fit and alignment with the family's values.
• Executive search firms: Partner with executive search firms to find specialised talent.
• Employer brand: Build a strong employer brand that highlights the unique aspects of working in a family office.

Very little data is available on this particular subject.

• Taxation benefits: Mauritius offers several attractive tax incentives that can be a major draw for international professionals. The country has a low corporate tax rate of 15%, with no capital gains tax and no withholding tax on dividends. These tax advantages make Mauritius a favourable destination for expatriates, enhancing the appeal of compensation packages offered by family offices.
• Work permits and immigration rules: Securing work permits and adhering to immigration rules are crucial aspects of talent acquisition. Mauritius has several visa options to facilitate the recruitment of international talent. The Occupation Permit (OP) allows foreign investors, professionals and self-employed individuals to reside and work in Mauritius. The OP combines a work and residence permit, streamlining the process for potential hires. For non-EU talent, working with immigration specialists can help navigate the complexities of securing permits, ensuring a timely and smooth recruitment process
• Permanent residency and incentives: Mauritius offers a Premium Visa for non-citizens who wish to stay in the country for up to one year while working remotely. This can be an attractive option for high-level executives and advisers. Additionally, Mauritius has a Permanent Residence Permit that is granted to eligible investors, retirees and professionals, providing long-term stability and incentives for relocating to Mauritius.
• Lifestyle and living conditions: Mauritius boasts a high quality of life, with a tropical climate, beautiful beaches and a safe environment. The island's multicultural society and excellent education and healthcare systems make it an appealing destination for expatriates and their families. These factors contribute to a positive living and working environment, aiding in the retention of top talent.
• Professional growth and opportunities: Mauritius is home to a growing financial services sector, offering numerous opportunities for professional growth and development. The presence of a robust regulatory framework and the island's strategic location as a gateway to Africa and Asia make it an attractive hub for family offices and international professionals.

By leveraging these benefits and addressing the specific needs of international talent, family offices in Mauritius can successfully attract and retain skilled professionals to manage and grow their operations.

In Mauritius, depending on the nature of the conflict, family disputes are typically resolved through:

• civil courts;
• family and juvenile courts;
• mediation; and
• occasionally, arbitration.

Civil and family courts handle most disputes, including matters related to:

• inheritance;
• asset division;
• divorce;
• child custody; and
• alimony.

Mediation offers a less adversarial and more collaborative approach. In this voluntary process, a neutral mediator helps parties to reach a mutually satisfactory agreement, making it particularly useful for:

• inheritance issues;
• asset division;
• estate planning conflicts; and
• family business issues.

Arbitration may also be chosen for disputes relating to contractual or commercial issues within family businesses. Arbitration offers a confidential and binding dispute resolution avenue.

Common issues in family disputes in Mauritius include:

• inheritance and succession conflicts;
• disagreements over family business management and profit distribution; and
• divorce-related matters such as alimony and child custody.

The legal framework relating to family matters, especially inheritance (forced heirship rules), should be well understood.

The choice of dispute resolution mechanism should also be well considered, as litigation can be longer compared to mediation or arbitration, but all those mechanisms may be as costly.

Confidentiality will also be a consideration as for most family matters, save for those involving children and juveniles, court proceedings are public, whereas arbitration is confidential.

When family disputes involve international aspects, the following should be considered:

• Jurisdiction: Determine which country's laws apply and where the case should be heard.
• International treaties: Mauritius is signatory to several treaties which can find their application.
• Enforcement of judgments: Ensure that court decisions will be recognised and enforceable across borders.
• Cross-border cooperation: Collaborate with legal professionals in other countries to resolve disputes effectively, as there should be an assurance that all laws are observed in all jurisdictions involved.

A family might decide to cease the activities of its family office in Mauritius for various reasons, including the following:

• Financial constraints: If the family office is no longer financially viable due to high operational costs or reduced family wealth.
• Change in family needs: Shifts in the family's needs or priorities that no longer align with the services provided by the family office.
• Regulatory changes: New regulations or changes in existing laws that make it difficult or less advantageous to operate a family office.
• Succession issues: Challenges in succession planning or conflicts among family members that hinder the effective operation of the family office.
• External factors: Economic downturns, geopolitical risks or other external factors that impact the family's financial situation.

Key concerns and considerations include the following:

• Legal and regulatory compliance: Ensure that all legal and regulatory requirements are met during the cessation process.
• Asset distribution: Properly distribute assets and manage any remaining investments.
• Confidentiality: Maintain confidentiality and discretion throughout the process.
• Communication: Clearly communicate the decision to all relevant stakeholders, including family members and staff.
• Financial impact: Assess the financial impact of ceasing operations and planning for any potential financial liabilities.

The family office landscape in Mauritius has been evolving rapidly but needs to develop further and become more cost friendly to attract more family offices to the jurisdiction. The requirement to have certain full-time staff is proving to be a deterrent.

Mauritius has had a new government in power since November 2024 and we are waiting to see what new changes this new government may bring for family offices.

Top tips:

• Clear governance structure:
• • Establish a well-defined governance structure that outlines roles, responsibilities and decision-making processes.
  • Ensure regular communication and meetings to keep all players involved updated.
• Professional expertise:
• • Hire experienced professionals with expertise in wealth management, legal matters, tax planning and other key areas.
• Robust risk management:
• • Implement a comprehensive risk management framework to identify, assess and mitigate potential risks.
  • Regularly review and update risk management policies to ensure proper risk management.
• Succession planning:
• • Develop a clear succession plan to ensure smooth transitions and continuity.
  • Involve the next generation in the family office's activities early on to prepare them for future responsibilities.
• Technological integration:
• • Leverage advanced technologies for efficient operations, data management and communication.
  • Ensure that cybersecurity measures are in place to protect sensitive information.
• Transparent communication:
• • Maintain open and transparent communication channels with family members, staff and other stakeholders.
  • Provide regular updates on the family office's activities, performance and any significant changes.
• Regulatory compliance:
• • Stay informed about local and international regulations and ensure full compliance.
  • Engage with legal advisers to navigate complex regulatory requirements.

Potential sticking points:

• Conflicts of interest:
• • Address potential conflicts of interest that may arise between family members or between family and professional staff.
  • Implement conflict resolution mechanisms to manage disputes effectively.
• Costs and financial viability:
• • Carefully manage operational costs to ensure that the family office remains financially viable.
  • Regularly assess the cost-benefit ratio of maintaining the family office.
• Cultural differences:
• • Be mindful of cultural differences within the family and among staff members, especially in multi-family offices.
  • Foster an inclusive and respectful work environment.
• Regulatory changes:
• • Stay updated on any changes in regulations that may impact the family office.
  • Be prepared to adapt to new regulatory requirements promptly.
• Intergenerational dynamics:
• • Address potential generational differences in values, goals and communication styles.
  • Facilitate regular family meetings to bridge gaps and ensure cohesive decision making.
• Data security:
• • Ensure that robust cybersecurity measures are in place to protect sensitive family and financial information.
  • Regularly update and test data security protocols.
• Employee retention:
• • Attracting and retaining top talent can be challenging.
  • Offer competitive compensation, career development opportunities and a positive work environment to retain key staff members.