The Seychelles foundation is a popular choice for those looking to set up a private foundation or family foundation, however the Seychelles Foundations Act allows for other uses as well. The Seychelles foundation encompasses many of the best provisions found in other foundation jurisdictions such as Panama, but provides more clarity on important legal issues (such as the assigning of the rights of the founder), more flexibility and stronger asset protection. The flexibility of the Seychelles foundation makes it ideal for carrying out private purposes such as family succession/estate planning and asset protection (a "Private Foundation" or "Private Interest Foundation"), charitable purposes (a "Charitable Foundation), a specific purpose (a "Purpose Foundation") or any combination of the three.
Assets transferred to a Seychelles foundation become the property of the foundation with full legal and "beneficial" title and are no longer considered to be the assets of the Founder. Similarly, beneficiaries of Seychelles foundations are not considered the “owners” of the foundation and have no legal or beneficial rights to its assets nor control over the decisions of the foundation.
Seychelles Foundations are managed by a Foundation Council which is typically provided by the licensed Seychelles International Foundation Services Provider in order to ensure that the Foundation is properly administered and controlled from Seychelles and to help avoid any confusion over the “tax residency” of the Foundation. A Seychelles Foundation may additionally have a “Protector” which would normally at a minimum have powers to oversee the activities of the Foundation Council and remove them if they are not fulfilling the objects of the Foundation.
The Founder may also retain certain powers and rights to himself or may convey these to another person. Examples would be powers such as the right to remove and add beneficiaries or perhaps to direct the investments of the Foundation. Since a Seychelles Foundation is an incorporated legal entity, this level of involvement by the Founder would not expose the Foundation to a “sham” argument or debate over “certainty” as it would with a trust where the Settlor retained such powers.
Seychelles Foundation Features and Advantages
1. Low Government Fees - only $200 annual licensing fees payable to the Seychelles Financial Services Authority
2. No Seychelles taxes - Seychelles foundations are completely exempt from any form of taxes in Seychelles meaning that all income and gains of any kind of the foundation are not taxable in Seychelles. Distributions to beneficiaries, fees paid to investment advisors and similar are also tax exempt.
3. Fast registration - a Seychelles foundation can be registered and subsequently "incorporated" in less than 24 hours
4. Formation - the Charter and optionally, Regulations, are submitted to the Seychelles Financial Services Authority by a licensed International Foundation Services Provider (Sterling) who then registers the documents and provides a certificate signifying the official incorporation.
- A Seychelles Foundation shall have a minimum of $1 initial assets
- Assets may originate from any lawful source and consist of present or future assets of any nature
- In addition to non-Seychelles assets, the assets may include - a. any entitlement or interest as a beneficiary in another Foundation or a trust under the International Trusts Act; or b. any shares, debentures or other interest in a company incorporated under the Seychelles International Business Companies Act, Companies (Special Licenses) Act, Protected Cell Companies Act and/or an interest in a partnership registered under the International Limited Partnership Act; or c. any company, trust or other entity licensed as a mutual fund under the Mutual Fund and Hedge Fund Act; or any funds in an account with a bank licensed under the Financial Institutions Act; and d. shall not include immovable properties or other properties in Seychelles, including shares, debentures or other interests in any other legal person incorporated or registered, in Seychelles
- May be any individual or legal entity (including companies, trusts or even another Foundation) and may be a “nominee” (recommended for privacy as the Founder is named in the publicly filed Charter)
- May have two or more Co-Founders
- May reserve certain rights to himself or another person in the Charter or Regulations such as the right to direct investments, appoint/remove beneficiaries, dissolve the Foundation, etc.
- May assign his rights to another party which shall have all rights construed to the Founder (the Panama law is quiet on this even though it is a common practice for the "nominee" founder provided by the Panama law firm to assign his/its rights to the principal which could pose legal issues)
- May be a beneficiary, but not the sole beneficiary
7. Foundation Council
- The Councilors manage the business and affairs of the Foundation
- A minimum of one Councilor is required
- May be natural persons or legal entities
- Founder may be a Councilor but not the sole Councilor
- May be identified in the Charter or Regulations (not publicly filed)
- If so provided in the Charter or Regulations the Foundation may appoint a Protector
- A Founder, Councilor or beneficiary may be appointed as the Protector except that a sole Councilor or sole beneficiary shall not act as a Protector
Purpose and Objects
A Foundation's main purposes or objects shall include the management of its assets and the distribution of its assets and income to the Foundation’s beneficiaries in accord with its charter or regulations. A purpose or object of a Foundation may be, but need not be, charitable.
- May be (a) in the English or French language; or (b) in a language other than in English or French, in which case it shall be accompanied by a translation in English or French
- Publicly filed constitutional document of the company which contains details such as the name of the Founder, objects and purpose.
A Foundation may, but is not obligated to, adopt a document called its “Regulations” providing, for example, for the identification and designation of Councilors and beneficiaries, distribution of Foundation assets, beneficiary entitlement proportions, etc. Unlike the charter, the regulations are a private document (not filed at the Registry).
A Seychelles Foundation must at all times have a registered agent in Seychelles licensed as an International Foundation Services provider under the International Corporate Services Providers Act 2003 ( as amended).
Government licensing fees are a flat US$200 each year and are due on the anniversary date of the registration of the Foundation on a yearly basis.
Books and Records
- A Seychelles Foundation shall keep proper books of account and records as its council considers necessary in order to reflect its financial position, about - a. all sums of money received, expended and distributed by the Foundation, and the matters about which the receipt, expenditure and distribution took place; b. all sales and purchases by the Foundation; and c. the assets and liabilities of the Foundation.
- The books of account and records required to be kept shall be kept at the registered office or such other place as the councilors consider fit.
- Where the books of account and records of a Foundation are kept at such other place, the Foundation shall inform its registered agent of the address of the other place.
Time to Establish
- 1-3 days depending on the complexity
- “Shelf Foundations” available for immediate use
Standard Documents and Services
- Checking name availability
- Up to 1 hour consultation
- Due Diligence on up to two connected parties
- Drafting of Foundation Documents
- Certified Certificate of Registration
- Certified Foundation Charter
- Certified Foundation Regulations
- Minutes of the initial meeting of the Foundation Council
- Register of Councilors
- Register of Agents and Attorneys
- Provision of Registered Agent and Registered Office for 1 year
- Maintenance and safekeeping of books and records
- Apostiled Appointment of Protector (if applicable)
- Banking Resolution (if applicable)
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