The growing popularity of Foundations in Africa

06 Aug 2021

Written by Akshay Asgarally, Associate Director - Business Development, IQ-EQ

In recent decades, estate planning and asset protection vehicles have seen a significant boost in popularity amongst High Net Worth Individuals (HNWI) in Africa. The estimated 25% growth in the HNWI population in Africa by 2025, coupled with the uncertainty brought by the COVID-19 pandemic, is also likely to bring about an upsurge in the use of these structures.

The most common vehicle used in estate planning is a Trust, a structure derived from the common law concept. While Trusts are widely known and used in anglophone countries around the world, wealthy African families have been slower to embrace them, uncomfortable with the idea of giving away control over their family estate assets to a third-party trustee. This position is even more apparent in the civil law countries in West Africa, where the concept of a Trust is somewhat unknown. This is where the Foundation comes into play.

The Foundation is usually defined as having the body of a company and the mind of a Trust. Essentially, a Foundation is a separate legal entity similar to a company, with a founder who endows property in the Foundation in the same way as a settlor in a Trust. It also has a Council to conduct the affairs and administer the property of the Foundation, like a board of directors managing a company. It may also have beneficiaries that are similar to a trust. By giving full control to the trustee, the fear of the family’s hard-earned assets falling into the wrong hands-a common concern with Trusts- is alleviated.

Mauritius introduced the Foundations Act in 2012 in an effort to broaden its private wealth offering for the African market. Despite its late addition, the Mauritius Foundation is increasingly used in Africa, as its inherent characteristics are more aligned with the cultural values attached to wealth and family control in many African countries. 

Comparison between a Trust and a Foundation


Mauritius trust

Mauritius foundation

Legal concept

Common law concept

Civil law concept


Trust Act 2001

Foundations Act 2012

Legal ownership

Assets are held by the Trustee

Assets are owned by the foundation, which may bring comfort to the founder

Legal personality

A trust is not a separate legal entity. It  is a legally binding agreement between parties

A foundation is a separate legal entity and has a certificate of registration



No requirement to register with the Registrar of Companies or elsewhere


Must be registered with the Registrar of Foundations


The trustees administer the trust. The settlor generally has no rights to control the trust or manage the trust property

The affairs of the foundation are run by the Council. The founder may be a member of the Council


The duration of a trust other than a purpose trust shall not exceed 99 years from the date of its establishment. The terms of a non-charitable purpose trust shall limit its duration to a term not exceeding 25 years.

A foundation does not have a defined duration imposed by legislation

Bankruptcy/creditor remoteness


Except where the intent was to defraud creditors, a trust will not be void or voidable or otherwise invalidated in the event of or by reason of the settlor’s bankruptcy or liquidation of his property or in any action or proceedings against the settlor at the suit of his creditors.


Except in cases of fraud, all property effectively transferred to a foundation will cease to be the property of the founder and the foundation will hold good title in such property.


Constitutive document

Trust deed (trust settlement of declaration of trust

Charter and articles (if any)

Forced heirship rule

No forced heirship rule applies

No forced heirship rule applies


Named/identified beneficiaries or class of beneficiaries are possible

Named/identified beneficiaries or class of beneficiaries are possible


Can be appointed and role of protector will be to ensure that the trustee is acting in accordance with the trust deed

Can be appointed and role of protector will be to ensure that the council is acting in accordance with the charter


Exempt from income tax if the trust is for a charitable purpose or is declared as non-resident in Mauritius

Exempt from income tax if the foundation is for a charitable purpose or is declared as non-resident in Mauritius


With its hybrid legal system and conducive eco-system, Mauritius offers a unique estate planning and asset protection solution that caters for the needs of HNWIs in both common law, and civil law countries in Africa. Other benefits that mark Mauritius out as a jurisdiction of choice for the transfer, preservation and protection of wealth of HNWIs family-owned businesses in Africa are: 

  • Modern legal and regulatory framework
  • Political stability and strong governance rules
  • Rule of law with the ultimate court of appeal being the Privy Council of UK
  • A well qualified and bilingual workforce
  • Consistently rated first in Africa for ease of doing business
  • Network of Double Taxation Treaties and Investment Promotion and Protection Agreements with African countries

In response to a surge of recent interest from U/HNWs and their family offices in trusts and foundations, IQ-EQ has launched an informative guide on the topic: IQ-EQ’s Guide to Trusts and Foundations.

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