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Seychelles international trust: Types, benefits and key parties.

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Seychelles international trust: Types, benefits and key parties

Understanding the Seychelles international trust is crucial for individuals and businesses seeking a flexible framework for wealth management and asset protection. This guide outlines the key features, types, parties involved and procedures of incorporating a Seychelles international trust.

Key takeaways:

  • Seychelles international trusts offer a flexible structure for managing assets, which allows the creation of irrevocable and revocable trusts.
  • Seychelles recognises many types of trusts, including charitable international trusts, purpose international trusts and other specific trusts.
  • The trust deed is not a public record, and the jurisdiction’s strict laws prohibit the disclosure of trust information.
  • Foreign-sourced income is exempt from tax if correctly structured.

What is a Seychelles international trust?

An international trust, as defined by Seychelles law, is a trust or constructive trust that meets the following criteria:

  • The settlor must not be a resident of Seychelles throughout the trust’s duration.
  • At least one trustee must be a licensed company under the International Corporate Service Providers Act authorised to provide international trustee services. The trust can include any assets except property in the Seychelles or shares, debentures, or interest in entities from countries other than Seychelles, including international business companies or other international trusts.

However, under certain conditions and with approval from the authority, a trustee may own immovable property required for office accommodation, invest in securities and other investments in Seychelles and maintain a financial institution account for international trust operations.

Types of Seychelles international trusts

Seychelles international trusts are considered irrevocable by default, providing a higher level of asset protection as the assets are placed under the control of a trustee, and changes cannot be made once it is established. However, the jurisdiction also allows the creation of revocable trusts, granting the settlor the flexibility to modify or terminate the trust. Many international trusts adopt a discretionary structure, giving the trustee discretionary powers to determine how the assets are distributed among the beneficiaries.

The Seychelles International Trusts Act specifies several trust categories, including charitable international trusts, purpose international trusts and other trusts such as commercial, life insurance and cash deposit trusts.

Parties involved in Seychelles international trusts

  • Settlor: The settlor is the individual who creates the trust by contributing trust property or through a testamentary disposition. They can take on the roles of a trustee, beneficiary, or protector but cannot be the sole beneficiary or trustee.
  • Trustee: The trustee is responsible for managing trusts in accordance with the trust deed and has a fiduciary duty to diligently care for the trust property for the benefit of the beneficiaries.
  • Beneficiary: All individuals or companies that the settlor appoints to receive benefits, such as cash or other assets, are considered as beneficiaries.
  • Protector: While not mandatory, the protector, appointed by the settlor, supervises the trustee and adds an extra level of assurance for asset management.

Trust establishment process

  1. The first step is drafting the Trust Deed, a document outlining the trust’s establishment and terms and conditions. It also includes the trustee’s role, duties, beneficiaries’ names and trust assets.
  2. Once the trust deed has been agreed upon, the next step is registering the trust.
  3. To register the trust, the following are required:
    1. File a declaration by the trustee declaring that the settlor is not a Seychelles resident.
    2. The trust does not own property in Seychelles.
    3. Provide the name and date of the trust. The trust name can be in any language but must be accompanied by a translation in English or French.
  4. A fee of USD 150 must be paid to the Registry.
  5. The international trust will receive a numbered registration certificate upon correct filing and payment.

Confidentiality

The trust deed is not a public record, and the disclosure of the international trust’s information or documents is prohibited by law unless a request is made by the beneficiary or to the extent allowed by the terms of the trust.

Taxation and accounting records

Under Seychelles law, international trusts are exempt from business, estate, inheritance, succession, gift tax and stamp duty as long as the income is sourced outside of the jurisdiction.

The trustees must maintain accurate accounting records, ensuring transparency and accountability. The records must be kept for a minimum of seven years. Licensed trustees must create an annual financial summary within six months of the trust’s financial year-end. If the records are kept outside of Seychelles, they must be submitted to the trustee’s principal place of business in Seychelles and available to local authorities when requested.

Conclusion

The Seychelles international trust’s distinctive features, such as irrevocable structures, discretionary power and a number of trust types, satisfy a wide range of requirements. Furthermore, its tax-exempt status is a major benefit, allowing assets to grow tax-free on foreign-sourced income. This beneficial tax policy, combined with the Seychelles international trust’s dedication to confidentiality, makes the Seychelles international trust an even more appealing option for those looking to preserve and protect their assets.

How Acclime can help you maintain confidentiality and protection

With Acclime’s expertise in corporate services, we provide invaluable support to businesses seeking to capitalise on the advantages of offshore jurisdictions. Our professional team understands the intricacies of Seychelles’ regulatory landscape, ensuring seamless compliance with local laws and regulations.