Trust Registration

PROTECT YOUR BUSINESS OR PERSONAL INVESTMENT!

A Seychelles International Trust is required to be registered according to the International Trust Act 1994. A trust is a legal arrangement whereby the owner transfers his property or other assets to a trustee to hold and administer under the terms of a Trust Deed for the benefit of other persons. Given the Assets of a Trust are not the properties of the settlor, trusts provide significant scope for tax and succession planning, wealth management and assets protection. The Settlor is the person who transfers his or her assets to establish the Trust.

In many offshore jurisdictions, the trustee must be licensed in the country where the Trust is established. The Trustee must operate in the best interests of the beneficiaries, and may breach its legal duty if it fails to exercise a sufficient level of care. The trustee must obey the directions in the trust deed and must account for all transactions. A trustee is entitled to make reasonable charges, but is not permitted to derive any advantage from the Trust. A trustee's actions are strictly controlled by law.

The settlor needs to decide who he wishes to benefit under the terms of the trust - who will be the beneficiaries and how they are to benefit. A settlor may wish to nominate family members as beneficiaries, for example, upon his death or in a certain situation. The settlor may be a beneficiary but not the sole beneficiary.

The trustee administers the trust at its discretion, but a letter or expression of "wishes" is provided by the settlor, setting out his wishes in relation to administration of the trust, including as to distributions proportions, timings, etc. In practice, the trustee will operate in accordance with the letter of wishes but are not legally bound to do so. It acts as a guide to the trustee.

Some settlors appoint a "protector" to oversee operation of the Trust. While a protector should not control a trust, the protector can be given veto power on certain trust decisions, such as in respect of addition or exclusion of a beneficiary by the trustee. A protector may be given the power to remove or appoint trustees. Once a trust is created, the settlor should not be exerting undue control over the trust assets as if it remained his own property. This is one factor a court could consider in deciding if a trust is valid or a "sham".

A trust may be used together with an offshore company. Often an IBC and trust dual structure is used, where the IBC is the active entity and the Trust is passive and that its main role is to hold and own the shares in the IBC, with the IBC owning the property, funds or other external investments. Use of the dual structure is also one means of giving a settlor more influence than may be possible in relation to a sole Trust.

To register a Trust, a declaration must be filed by the licensed resident trustee with SIBA, declaring that the settlor of the Trust is not a Seychelles resident, that the Trust property does not include any land in Seychelles, and informing the name and the date of the Trust.

Although an International Trust is registered and a registration number is allocated, the Trust deed is not filed with the registry. There is no requirement to file with any registry the details of the settlor or the beneficiaries, except if the latter are Seychelles nationals. Seychelles international Trusts are not subjected to tax on income , assets, capital gains or any stamp duties.

Other features of an International Trust

• Must have a Seychelles resident trustee with a valid license issued by Seychelles International Business Authority. Non-resident co-trustee/s or protector may also be appointed
• Can own property worldwide, except in Seychelles, but it can own shares or maintain bank accounts in Seychelles
• The settlor cannot at any time during the duration of the Trust be a resident of Seychelles
• The duration of an International Trust is up to 100th anniversary of the date it came into existence and will then terminate, unless terminated earlier either pursuant to the trust terms or for any other reason, expect for purpose or charitable trusts
• There are no restrictions on the accumulation of income under this Act
• Seychelles International Trust may migrate. They can be administered from Seychelles or elsewhere. The terms of the trust may also provide for a change in the proper law of the Trust, but a change is only valid if the new proper law recognizes the validity of the trust and the interest of the beneficiaries.

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