International Trusts
A Short Definition
An Offshore Trust is an enforceable obligation arising out of an arrangement or contract binding “the Trustee” and “the Settlor” requiring the Trustee to deal with the asset over which he is given control and authority for the benefit of “Beneficiaries” who are entitled to proceeds of the Trust. “The Trust Deed’ is the document regulating the arrangement between the Settlor and the Trustee to hold and manage the assets for distribution of the benefit to the Beneficiaries.
Why Set Up An Offshore Trust
While the legal title is passes onto the Trustee the settlor frees himself from major tax and other testamentary obligations.
This alienates the assets and also provides for the wishes of the Settlor to provide for his intended beneficiaries during his lifetime and after his death in full confidentiality and without interference of the concept of "forced heirship" and inheritance duty.
The Concept Of Seychelles International Trusts
The concept of Trusts is unknown to Seychelles domestic law.
In 1994 The Seychelles International Trust Act 1994 was established to provide for the current trend of management of assets and it made the Seychelles International Business Authority (SIBA) its regulatory body. Thus its offshore status.
The following Trusts are permissible under the Act:-
· Charitable Trust - Section 13
· Purpose Trust - Section 14
· Constructive Trust - Section 48
· Trust resulting from Court Action
The Trust Deed
The Trust Agreement between the Settlor and the Trustee must be in writing. The Asset must belong to the Settlor. The Agreement provides for:-
It contains:
· Description and purpose of the Trust.
· Terms and conditions for allocation of benefits and assets.
· Instructions and mandate to the Trustee on how to deal with asset/fund.
· Names, Addresses and description of class of beneficiaries.
· Compensation / Remuneration of the Trustee.
· Length of Term of the Trust.
· Termination of Trust and functions of Trustee.
Main Features of Seychelles International Trusts
· It is created in writing by way of trust agreement but its conditions for identifying the assets, the class of beneficiaries and allocation of benefits may be provided by Will and Testament or in the agreement itself. The Settlor may act as a Trustee and can even be a beneficiary, but he cannot be the sole beneficiary.
· The settlor may be an IBC or an individual who is non-resident in Seychelles.
· The Trustee(s) or at least 1 Trustee must be resident in Seychelles. (IBC’s registered in Seychelles are legally resident in Seychelles)
· Confidentiality is secured under the Act. The settlor, beneficiaries, trust assets, funds and accounts are not disclosed, save by a Court order pursuant to provision of International Treaties. (money laundering, drugs, arms)
· Income may be accumulated.
· Benefits, income and distribution to beneficiaries are tax free.
· The settlor’s personal bankruptcy or liquidation does not render the Trust void.
· The “foreign rule of forced heirship” is not enforceable against Seychelles Trusts. Thus the trust, transfer or disposition of assets is protected.
· Trusts may endure for any period up to 100 years.
· Trusts may only be revoked by beneficiaries or the Court in exceptional circumstances. (money laundering, drugs, arms, unlawful purpose)
The legal vehicle of Trusts require careful and detailed planning. Prices vary depending on volume, scope of works and size of assets/funds.
A Short Definition
An Offshore Trust is an enforceable obligation arising out of an arrangement or contract binding “the Trustee” and “the Settlor” requiring the Trustee to deal with the asset over which he is given control and authority for the benefit of “Beneficiaries” who are entitled to proceeds of the Trust. “The Trust Deed’ is the document regulating the arrangement between the Settlor and the Trustee to hold and manage the assets for distribution of the benefit to the Beneficiaries.
Why Set Up An Offshore Trust
While the legal title is passes onto the Trustee the settlor frees himself from major tax and other testamentary obligations.
This alienates the assets and also provides for the wishes of the Settlor to provide for his intended beneficiaries during his lifetime and after his death in full confidentiality and without interference of the concept of "forced heirship" and inheritance duty.
The Concept Of Seychelles International Trusts
The concept of Trusts is unknown to Seychelles domestic law.
In 1994 The Seychelles International Trust Act 1994 was established to provide for the current trend of management of assets and it made the Seychelles International Business Authority (SIBA) its regulatory body. Thus its offshore status.
The following Trusts are permissible under the Act:-
· Charitable Trust - Section 13
· Purpose Trust - Section 14
· Constructive Trust - Section 48
· Trust resulting from Court Action
The Trust Deed
The Trust Agreement between the Settlor and the Trustee must be in writing. The Asset must belong to the Settlor. The Agreement provides for:-
It contains:
· Description and purpose of the Trust.
· Terms and conditions for allocation of benefits and assets.
· Instructions and mandate to the Trustee on how to deal with asset/fund.
· Names, Addresses and description of class of beneficiaries.
· Compensation / Remuneration of the Trustee.
· Length of Term of the Trust.
· Termination of Trust and functions of Trustee.
Main Features of Seychelles International Trusts
· It is created in writing by way of trust agreement but its conditions for identifying the assets, the class of beneficiaries and allocation of benefits may be provided by Will and Testament or in the agreement itself. The Settlor may act as a Trustee and can even be a beneficiary, but he cannot be the sole beneficiary.
· The settlor may be an IBC or an individual who is non-resident in Seychelles.
· The Trustee(s) or at least 1 Trustee must be resident in Seychelles. (IBC’s registered in Seychelles are legally resident in Seychelles)
· Confidentiality is secured under the Act. The settlor, beneficiaries, trust assets, funds and accounts are not disclosed, save by a Court order pursuant to provision of International Treaties. (money laundering, drugs, arms)
· Income may be accumulated.
· Benefits, income and distribution to beneficiaries are tax free.
· The settlor’s personal bankruptcy or liquidation does not render the Trust void.
· The “foreign rule of forced heirship” is not enforceable against Seychelles Trusts. Thus the trust, transfer or disposition of assets is protected.
· Trusts may endure for any period up to 100 years.
· Trusts may only be revoked by beneficiaries or the Court in exceptional circumstances. (money laundering, drugs, arms, unlawful purpose)
The legal vehicle of Trusts require careful and detailed planning. Prices vary depending on volume, scope of works and size of assets/funds.