Family Office
Family Office has known a history of stewardship since the sixth century. The modern concept of Family Office has recently taken its height with the global trend of ultra high net worth (‘UHNW’) families seeking to reconsider their wealth structure due to new economic substance laws.
In a nutshell a family office is a one-stop shop (see diagram 1) for the UHNW families which does almost everything including tax planning, wealth and property management, investment management, full-service concierge, charitable donations and others.
Family office licenses:
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The Single Family Office - This model exists to serve only one family client.
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The Multifamily Office - This model exists to serve various family clients
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Pursuant to the Rules, a family office must have no clients other than “family clients” as per listed below. The family office, whether it is an MFO or SFO may be:
(a) wholly owned by family clients; and
(b) exclusively controlled by family members / family entities
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Why the need for a Family Office?
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It all starts with the complex needs and requirements of UHNW families which can be met through set up of a family office for the following reasons
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To coordinate wealth management functions and creation of income tax efficiency.
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To bring wealth preservation and stability.
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To obtain expert, independent wealth management and financial advice.
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To build resilience for the family through set up of risk assessment frameworks.
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To create a family governance structure.
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To cater for family education.
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To simplify reporting obligations
Mauritius as your destination for a Family Office
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All aspects of setting up a family office correlates in some way with the actual jurisdiction in which it will be established. Mauritius has over the years developed sound legislations to service the UHNW families through set up and administration of various mechanisms for wealth and tax planning, asset protection, succession planning and others.
With the coming into force of Family Office legislation in June 2020, Mauritius has reinforced its commitment to understand the complex needs of the UNHW families and keeping up with the challenge.
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Mauritius offers the following to UNHW families:
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High calibre professionals with sound knowledge of the industry especially lawyers, trust practitioners, accountants and others.
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Allows foreign nationals to work and reside in Mauritius under occupation permit
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Provides good infrastructure and communication networks
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Political stability
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Attractive tax and solid legal framework
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Strong local legislation to protect the privacy of individuals
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Family clients
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include the following connected persons in relation to an individual within an SFO or MFO:
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spouse;
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the descendants of the individual and their spouses;
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parents, including step-parents;
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grandparents;
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parents-in-law, including step-parents-in-law;
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brother, step-brother, sister, step-sister and their spouses;
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spouse’s grandparents;
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spouse’s brother, step-brother, sister, step-sister and their spouses and children;
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parent’s brother, step-brother, sister, step-sister and their spouses;
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children of the brother, step-brother, sister or step-sister of the individual’s parents, both present and future, including stepchildren, and their spouses; and
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children of the individual’s brother, step-brother, sister or stepsister, both present and future, including step-children, and their spouses.
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Whereas
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For any of the relationships listed above that may be established by blood, that same relationship may also be established by adoption
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“descendants of the individual” means the individual’s children, the children of that individual’s children, the children of those children, and so on
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“children” includes step-children.
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Exemption from Income Tax
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The holder of a Family Office Licence (both SFO and MFO) is eligible to tax holidays for a period of 5 income years on income generated by the Family Office from the activities covered under the licence, provided the Employment and Substance Requirements (see below) are fulfilled.
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