Seychelles is sought by foreign citizens who want to protect their assets. As one of the most renowned offshore destinations in the world, Seychelles allows for the creation of various types of structures through which foreign individuals can reduce their taxes.
Apart from the Seychelles offshore company, foreigners can also establish several types of trusts. Among these, the international trust is one of the most common estate planning tools in Seychelles.
Below, our company formation agents in Seychelles explain how to create an international trust in the insular state. Those who want to operate in Seychelles by opening a trust can rely on our local advisors.
The International Trusts Law in Seychelles
International trusts in Seychelles are governed by the law with the same name which was enabled in 1994. Under this law, an international trust is a non-corporate entity created through a legal agreement which stipulates the relation between the settlor, the trustee, and the beneficiaries.
In order to be considered an international trust, the entity must comply with the following requirements:
- – the settlor must be a foreign citizen – this condition is imposed for the entire duration of the Seychelles international trust;
- – the assets covered by the international trust must not be located in Seychelles;
- – one of the trustees must a be a Seychelles company holding an international corporate service provider license;
- – the international trust is created for a duration of maximum 100 years.
Our local consultants can offer more information on the conditions related to creating a Seychelles international trust. We can also assist those who want to set up an offshore company in Seychelles.
The Seychelles trust – main features
In Seychelles, the trust is not a legal entity, however, it falls under the jurisdiction of the Civil Law, like in other countries. The main principle under which a trust is created is the separation of ownership of assets from the rights over the respective assets of the beneficiary. The settlor will transfer the administration of the estate or other instruments as provided in the trust agreement to a third party called trustee who will maintain and manage them for the benefit of the beneficiary or beneficiaries.
The trust is seen as a tool through which the legal title over certain assets is unrelated to the control over them which enables the settlor and beneficiaries to only take advantage of the benefits resulted from the respective estate.
In Seychelles, the international trust is one of the most appreciated legal tools through which various types of assets, among which money, real estate and other types of properties can be protected through an agreement. Another important aspect about an international trust in Seychelles is that it is accessible to foreign citizens.
A Seychelles trust can also be created for one of the following purposes:
- for trading purposes, when it takes the form of a commercial trust;
- for offering insurance services, when it is set up as a life insurance trust;
- for managing various funds, such as pension or employment funds;
- for administering cash deposits, when created as a cash deposit trust.
The international trust, however, can be created for the original purpose it was designed for.
In Seychelles, international trusts are used together with offshore companies. If you are interested in setting up an offshore company in Seychelles, our specialists are at your service.
Types of international trusts in Seychelles
There are several types of international trusts that can be created in Seychelles, and they can be irrevocable or revocable. However, this is just a criterion under which a Seychelles trust can be set up.
The Seychelles Trust Law provides for the following types of international trusts:
- – discretionary trusts;
- – charitable trusts;
- – purpose trusts.
An important aspect to consider is that a Seychelles international trust can also be created or better said adapted to the needs of the settlor.
Seychelles is a very appealing destination for the establishment of an international trust which is why if you want to create one, you can rely on our company formation agents. You can also count on us if you need various legal services in the insular state.
The parties participating in a trust
In both cases of Seychelles national and international trusts, the parties participating in its establishment are the same. These are the settlor, the trustee and the beneficiary or beneficiaries, as it can have multiple.
It is also possible to appoint a protector when creating an international trust in Seychelles, however, this is a facultative measure of protection the settlor can make.
With respect to the relations between the parties involved in the creation of the Seychelles trust, there are several aspects to consider.
In the case of a Seychelles international trust, the settlor is the person who creates the trust by offering a property or other assets for administration to the trustee. He or she will transfer the goods through the trust agreement, however, the trustee will also receive clear instructions on how they will be managed.
The trustee is the person or legal entity in charge of administering the assets entrusted through the agreement. The creation of a Seychelles trust implies that the trustee will hold the legal title of the assets to be managed which comes with a fiduciary duty of care. The trustee must be licensed by the Revenue Commission.
The beneficiary of a Seychelles international trust will benefit from the assets managed by the trustee when the conditions of the agreement come to an end. It is possible to name each beneficiary or define them as a group upon the creation of the trust deed.
Our lawyers in Seychelles can help you draft a trust deed and can also provide other solutions in accordance with your needs and requests.
Why open an international trust in Seychelles?
There are many benefits related to the creation of an international trust in Seychelles. Among these we remind the following:
- – the international tax is exempt from several taxes applied in Seychelles;
- – the costs associated with the creation and administration of the Seychelles international trust are quite low;
- – the settlor has the right to appoint a protector of the trust who will ensure the supervision of the trustee;
- – Seychelles is a very sought destination for the creation of international trusts thanks to the comprehensive laws.
The 4 most important advantages of trusts in Seychelles
The creation of an international trust in Seychelles offers the following 4 benefits:
- – the protection of assets which can be used as an estate planning tool;
- – the enhanced confidentiality of the settlor’s identity and assets held in the trust;
- – the possibility of using the Seychelles trust as a tax minimization solution;
- – international trusts benefit from several tax advantages in Seychelles.
Our company formation agents in Seychelles can help foreign citizens who want to create international or charitable trusts here.
How to protect one’s assets through a trust in Seychelles
One of the greatest advantages of setting up a trust in Seychelles is the enhanced protection of the settlor’s assets or whole estate. Through a trust registered in Seychelles, the assets of the settlor will pass on to the trusts, therefore they will no longer be part of his or her estate. This way, in case of bankruptcy, creditors will not have access to the assets held by the Seychelles trust.
The Seychelles trust, a tax minimization tool
The Trust Act in Seychelles provides for trusts established here to be exempt from all types of taxes, as long as these assets are not located in Seychelles. This is why a trust created by foreign investors in Seychelles can be a great tax minimization solution.
When it comes to the taxes an international trust can be exempt from, these are:
- – the income tax;
- – the profits tax;
- – the estate tax;
- – the gift tax;
- – the inheritance tax;
- – the succession tax.
Facts on Seychelles’ economy
According to recent statistics, Seychelles:
- – registered a 3.9% Gross Domestic Product (GDP) increase in 2019, according to the National Bank;
- – had Foreign Direct Investment (FDI) inflows rose to 246 million USD in 2019;
- – had 28 double tax treaties in place at level of 2020;
- – ranked 100th in the World Bank’s 2020 Doing Business Report.
For assistance at company incorporation in Seychelles, please contact our local representatives.