A Seychelles International Trust is a useful vehicle for asset protection and efficient tax planning.
A Trust is a private legal agreement (Trust Deed) between the individual who places his/her assets in the Trust (Settlor) and the individual or corporation entrusted with the protection, management, and ultimate distribution of the assets (Trustee) for the persons entitled to benefit from the capital assets and/or income held under the agreement (Beneficiaries).
Trusts in Seychelles are set up under the Trusts Act, 2021. Under Seychelles trust law, an international trust may be created in writing, by will or by oral declaration
The main benefits of a Seychelles Trust fall into one or more of the following categories:
- Strong Asset Protection
- Can be part of business company structure
- Investment and Real Estate ownership and administration
- Efficient Tax Planning,
- Charitable purposes, and
- Substitution of Wills and Testaments
Strong Asset Protection
Trusts are widely used for the protection of assets from the claims of actual or potential creditors. In Seychelles, the Trusts Act, 2021 makes specific provision that notwithstanding the provisions of any bankruptcy or liquidation laws in Seychelles or in any other country, and notwithstanding the fact that the trust is voluntary and without consideration, unless it is proven to the Court that the trust was made with intent to defraud persons who, at the time when the payment or transfer of assets was made to the trust, were creditors of the settlor, the trust shall not be void or voidable. The law specifies that the burden of proof of such an intent on the part of the settlor lies with the creditors seeking to annul the transfer made to a Seychelles International Trust. Moreover, such an action must be instituted by the creditors within two years from the date of transfer or disposal. This legislative provision effectively insulates the trust assets from creditors whilst limiting the time period within which they can bring any such claim to court
A trust provides a confidential and flexible way in which an individual can decide how their assets are to pass on death. Many countries have what we call “forced heirship” laws which govern how assets pass to relatives on death. An individual may want to circumvent these laws and decide for himself the proportions in which his assets will pass, or the special provisions he will make for a needy or disabled relative, or a gift he may wish to pass to a friend or a charitable institution. A trust is a good way of overcoming forced heirship laws thus permitting the settlor to dispose of his assets in the way he chooses in utmost confidentiality. In Seychelles, provision is made in the Trusts Act, 2021 that the Inheritance Law of any country shall in no way affect any transfer or disposition made to a Seychelles International Trust and the validity of such transfer shall not be challenged.
Many persons turn to trusts as a way of mitigating income, capital gains tax and inheritance tax. In Seychelles the Trusts Act, 2021 provides that the income and gains of an international trust derived from sources outside Seychelles shall be exempted from all kinds of tax in Seychelles and no estate duty shall be chargeable in respect of assets belonging to an international trust. In fact the only charge payable to the Registry in respect of an international trust is a one-off stamp duty payable when the trust is created.
Privacy / Confidentiality
Confidentiality is ensured as disclosure of any information or document relating to an international trust is strictly prohibited by law, except under an injunction of the Seychelles Supreme Court for the purpose of an inquiry or trial into or relating to the trafficking of narcotics and dangerous drugs, arms trafficking or money laundering or under a direct prescription of Seychelles written laws.
According to the International Trust (amendment) act, 2021 there is a requirement to keep a register of trustees, beneficiaries, beneficial owners and settlors of the Trust (the International Trust Register), but it is kept confidentially by a Trustee and is not filed with any Seychelles Government Registry publicly opened.