Seychelles trusts are provided for by the International Trusts Act, 1994. A trust is created when the owner of the assets (the settlor) transfers ownership of those assets to a trustee to hold and administer under the terms of a trust deed for the benefit of one or more beneficiaries or for a charitable or other purpose.
As the assets of a trust are not the property of the settlor, trusts are useful vehicles for wealth management purposes including to hold and protect family wealth and for ‘outside estate’ succession planning. Although a Seychelles trust is registered with the Seychelles Financial Services Authority (FSA), the trust deed, including particulars of the trust’s settlor, beneficiaries and protector, if any, are not filed with the FSA and are not publicly accessible. A Seychelles trust is required to have a Seychelles resident trustee licensed by the FSA. Powers may be reserved under the trust deed to a protector, such as the right to appoint or remove trustees or to approve the addition or removal of beneficiaries or amendment of the trust deed. A Seychelles trust can own property worldwide except for property in Seychelles, though it can own shares in Seychelles international business companies and maintain bank accounts in Seychelles. A Seychelles trust and its trustee are not liable to tax in Seychelles in respect of the foreign income or profits of the trust. The International Trusts Act puts in place strong trust asset protection provisions, including a two-year claim limitation period protecting trust assets from attack by creditors of the settlor and exclusion of foreign forced-heirship laws.
Seychelles foundations are provided for by the Foundations Act, 2009. Foundations are increasingly being used as a cost-effective alternative to trusts. Analogous to a trust, the wealth protection and succession planning benefits of a foundation stem from the divestment of ownership of assets by the founder. When a founder donates assets to the foundation, those assets cease to belong to him or her and the foundation itself becomes the sole legal and beneficial owner of its assets. Unlike a trust (which may only hold property through a trustee), a foundation is a separate legal entity, capable of holding property in its own right. Like a trust, a foundation has beneficiaries, though they have no ownership interest in foundation assets unless a distribution is made to them. A foundation’s council is responsible for carrying out the foundation’s objects and for the management and distribution of its assets. A Seychelles foundation must have a minimum of one councillor, who may be an individual or company. It is not obligatory to appoint a Seychelles resident licensed councillor. The names of councillors, beneficiaries and protectors are not required to be filed with the FSA and are not publiclyaccessible.Similar to a trust, a foundation may appoint a protector.A Seychelles foundation is not liable to Seychelles tax in respect of its foreign income or profits. The Foundation Act provides for a two-year claim limitation period protecting foundation assets from claims by creditors of the founder and exclusion of foreign forced-heirship laws.