Offshore Trust in Seychelles
What is a Seychelles Trust?
The concept of trusts is old and goes back to the Roman times. A trust can be in the form of a simple verbal agreement, which is then confirmed in writing and in that document (known as a “Trust Deed”) are the terms and conditions upon which the trust assets are held and managed by the trustees and the rights that can be exercised by the Beneficiaries.
An offshore trust or any other trust is an agreement entered into when assets are transferred from a person (known as the “Settler”) to another individual or corporate body (known as “The trustee”) to hold property for the benefit of a previously appointed person(s) (known as “The Beneficiary”). The assets of the trust normally include money, property (estates or intellectual rights), stocks and shares, and/or any movable or immovable assets.
What are the Advantages of the Seychelles Trusts?
Asset Protection: The main advantage of the offshore trust is the separation of the legal ownership from the beneficial ownership. For legal purposes the trustees of the offshore trust are recognized as the legal owners of the assets and the beneficiaries are protected by a body of legal rules, which require trustees to adhere to strict duties as to how to manage the trust.
That is why an offshore trust is such an irreplaceable tool for asset protection. Assets transferred to offshore trust are no longer part of the property owned by the settler and cannot be claimed by creditors, litigators, etc. The assets could be protected if the settler is experiencing financial difficulties due to bankruptcy, divorce or a professional negligence claim. In case the settler was found to be insolvent, a portion of his assets may have been safely placed in the trust structure offshore, prior to his being declared insolvent.
Asset protection should be taken as a preventative measure. You should consider setting up an offshore trust before you have a lawsuit filed against you. It works like insurance. It is too late to buy insurance when your house is on fire. Under certain circumstances the claimant can be successful in getting money out of the offshore trust if it can be proven that the settler moved the assets into trusts, knowing about the pending litigation. To avoid this, it is important to transfer specific assets to a trust as part of an asset protection strategy that is planned in advance once you become aware of the potential threats against your wealth.
Tax Planning: Offshore trust can be an exceptional tax planning tool and if correctly structured it will produce substantial savings in income tax, capital gains tax, inheritance tax, and stamp duty.
Because the beneficiary of the offshore trust is not a legal owner of it, the income and capital gains are taxed in accordance with the rules of the residence of the legal owners — the trustees.
Inheritance Planning: A lot of people these days do not want their assets to be passed to their heirs as prescribed by law. If you require more complex arrangements, like providing a source of income to somebody for life or putting money aside for children’s education, an offshore trust is an ideal tax planning tool for these purposes.
Trusts help to avoid forced heirship, but you must choose carefully the jurisdiction where you want to establish the offshore trust.
On death the estate of the person goes through the probate procedure, which is lengthy, expensive and is open to public eyes. Establishing an offshore trust can avoid all these problems.
Confidentiality: On asset transfer during the probate procedure, the tax authorities need to see the list of all assets owned in order to assess it for estate duty. The details of the assets therefore are open to the public. It is not wise to disclose the offshore structure which was set up during one’s lifetime on death, as it would have negative tax consequences. An offshore trust is an alternative legal method to a Will for transferring the assets which do not have to be included in the Will, hence disclosed to the tax authorities.
You can also derive benefits from setting up an offshore trust if you want to protect the welfare of infant children, the aged or disabled people; or just want to preserve the family wealth with possible payments to members of the family as they are needed and to gain planning flexibility. This list is not exhaustive and is for illustration purposes only.
Main Features of a Seychelles Trust Based on the International Trust Act 1994:
- There is no requirement to mention the name/s of the settler and /or the beneficiary of an offshore trust, unless the latter is a Seychellois or a body corporate resident in Seychelles.
- There are no taxes on international trusts registered in Seychelles.
- There is no requirement for stamp or capital gain tax on offshore trust in Seychelles.
- There is no restriction on the accumulation of income on offshore trust in Seychelles.
- Offshore trust cannot involve any land in Seychelles.
- Revocable and irrevocable offshore trusts are permitted.
- Seychelles offshore trust may own and trade in other shares, open bank accounts, or deal with Government securities in the country.
- The trust or the transfer or disposition by a person creating an international trust cannot be invalidated by any foreign rule of forced heir ship.
- The settlers or trustees can themselves be named as beneficiaries under the trust.
- The settler cannot at any time during the duration of the trust be a resident of Seychelles, but at least one trustee has to be a resident of Seychelles.
- Confidentiality is maintained. Any disclosure is prohibited by law, except under an injunction of the Seychelles Supreme Court on an application made by the Seychelles Attorney General and only for the purpose of an inquiry or trial relating to drug and arms trafficking or money laundering.
- The law governing an international trust is the law chosen by the settler to be the proper law, the choice may be expressed or implied in the terms of the offshore trust.
- An international trust is valid and enforceable in Seychelles.
- An International trust one-off registration fee is US$ 100.
Setting up an International Seychelles Trust
You can only apply to form an international trust through a licensed trustee in Seychelles.
We are here to set up an international offshore trust for you.
OUR FEE to form an offshore trust in Seychelles is just 1790 USD. Annual maintenance fee is 1290 USD. To set-up a Seychelles trust please contact us.
Trust Formation Procedures
We will check the name availability for your trust and let you know about the results via e-mail and may require additional information from you and answer your questions if you have any.
When you are ready we will need a copy of an identity document for the Settler. At the same time we will raise an invoice, which you have to pay by the method you choose (We accept Visa and MasterCard; wire transfer; Western Union or Money Gram. We will proceed with the trust registration after we receive the necessary information and payment.
The process of trust registration normally takes three working days. You will receive The Deed of Trust and Certificate of Registration by courier post. The delivery time varies upon your location.