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Offshore Trusts Report: Seychelles

Legal Framework and Formation Rules and Fees

The International Trusts Act 1994 established, for the first time, a regime for international trusts in the Seychelles; it does not provide for domestic trusts. The Act was drafted after a thorough study of current practice in a number of leading offshore jurisdictions. Under the Act, the Seychelles International Business Authority (SIBA) is appointed as the regulatory body for trusts, alongside the Court.

The Seychelles is mostly a civil law jurisdiction to which the concept of the trust was unknown; thus the Trusts Act has to be sufficient unto itself, and indeed it contains some basic definitions which include the admittance of charitable, trust, purpose trusts, constructive trusts, and trusts resulting from action by the Court.

The following are some of the key features of the Seychelles Trust regime:

  • An international trust may be created in writing, by will or by oral declaration;

  • The settlor must reside outside the Seychelles for the duration of the trust; at least one trustee must reside in the jurisdiction, but this trustee may be an International Business Company (IBC), which shall not thus be deemed as resident; an IBC may therefore be a settlor;

  • A financial institution licensed under the Financial Institutions Act 1994 may also be a settlor;

  • The trust property may not include any Seychelles movable or immovable property or interests or rights to them in a Seychelles company owning such property;

  • The local trustee may with permission own local property for the trustees' accommodation, and, again with permission, may invest in local securities;

  • The settlor may choose the proper law of the trust; in the absence of a choice, the Act provides guidelines for establishing the proper law; in any event, the Seychelles Court has exclusive jurisdiction, and will apply the proper law itself (this allows the Act's forced heirship provisions to be effective);

  • The names of settlors and beneficiaries and the trust accounts are confidential under the Act, unless a Court orders disclosure under the Anti-money Laundering Act;

  • The standard perpetuity period is 100 years; but it does not apply to charitable or purpose trusts; a settlor cannot revoke a trust, but the beneficiaries can; the Court may revoke a fraudulent trust;

  • The accumulation of income is permitted;

  • A settlor can also be a trustee, and a beneficiary but not the sole beneficiary;

  • Forced heirship judgements are specifically excluded.

The Act contains extensive wording dealing with all aspects of the setting-up of trusts, the rights and responsibilities of trustees, and the powers of the Court.

International (Offshore) Trusts pay an initial registration fee of $100 (at the time of writing). Offshore Trusts are exempt from the Business Tax, from withholding taxes and from Stamp Duty.

In response to its listing by the OECD under the 'unfair tax competition' initiative, the Seychelles signed a letter of commitment in early 2001, which essentially meant that it had until 2005 to conform to high regulatory standards for all elements of its offshore sector, including trust business.

In July 2009, the Seychelles concluded a tax treaty with Belgium which contained provisions for the exchange of information in tax matters. More agreements facilitating the exchange of tax information between the seychelles and other jurisdictions are expected in the light of the OECD's latest crackdown on secrecy, prompted by the G20 London summit in April 2009. The Seychelles was, however, placed on the OECD's 'white list' of jurisdictions which have "substantially implemented the agreed tax standard." The Seychelles signed its first Tax Information Exchange Agreement, with the Netherlands, in August 2010.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Seychelles News

India, Seychelles To Exchange Tax Information Friday 16/9/2016 The tax information exchange agreement between India and Seychelles has entered into force, the Indian tax agency has said.

Seychelles's New FSA To Regulate Offshore Financial Sector Thursday 6/3/2014 On March 1, 2014, under The Financial Services Authority Act 2013, the Seychelles International Business Authority changed its name to the Financial Services Authority, and became the regulator for offshore non-bank financial services in the Seychelles.

Offshore Company Formations Have Slowed Wednesday 7/8/2013 The majority of offshore jurisdictions experienced a decline in company incorporation activity in the second half of 2012 compared with the first half, according to legal services consultancy the Applebly Group.

European Parliament ACP Report Targets Tax Havens Monday 25/1/2010 The European Parliament has called on the European Commission and the governments of the African, Caribbean and Pacific states to 'include the fight against abuse of tax havens, tax evasion and illicit capital flight as a matter of priority' in the revised Cotonou Agreement, which governs relations between the European Union and the ACP states.

USD31m IMF Loan Will Assist Seychelles Tax Reform Monday 28/12/2009 The International Monetary Fund has approved a three-year, USD31m extended fund facility to the Seychelles, which will support further fiscal and monetary reforms.

EU Signs Trade Agreement With Eastern And Southern Africa Countries Thursday 3/9/2009 The European Union on August 29 signed an interim Economic Partnership Agreement with countries from the Eastern and Southern Africa regional grouping.

IMF Reports Progress In Seychelles' Reform Program Friday 21/8/2009 An IMF mission led by Paul Mathieu visited Victoria during August 4-15 to assess the Seychelles' performance at end-June under the Stand-By Arrangement.

EU Seeks To Develop Trade With Africa Tuesday 28/4/2009 EU Trade Commissioner Catherine Ashton called for a continued push on trade facilitation to help developing countries, especially in Africa, reap the benefits of global trade.

OECD Delivers On G20 Tax Blacklist Pledge Monday 6/4/2009 The Organisation of Economic Cooperation and Development has published a list of jurisdictions it believes have not implemented internationally agreed standards of tax cooperation, following through on the G-20 nations' pledge to take action against 'non cooperative' territories in the interests of maintaining stability in the global financial system.

Barbados And Seychelles Sign Double Tax Agreement Thursday 26/6/2008 The government of Barbados intends to 'vigorously pursue' the expansion of its tax treaty network in 2008, a government official announced on Tuesday, following the recent signing and entry into force of a Double Taxation Agreement between Barbados and the Republic of Seychelles.