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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

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

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.