Offshore Foundation set up in the Seychelles
Summary
A Seychelles Foundation is a legal entity used as a tax-free wealth management, investment, estate planning legal vehicle. It offers a high level of privacy, and flexibility in regards to the Foundation’s objectives.
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It combines features from a Trust and a Company, and it is often referred to as a hybrid of a Trust and a Corporation.
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One of the key differences and benefits of a Seychelles Foundation is that it allows the creator or owner of the Foundation to avoid having to report the ownership or control of it in the country where he resides, as legally the Founder does not own the Foundation. Once the Foundation receives an asset, it belongs to the Foundation, and these assets are not managed under a “fiduciary” duty towards the beneficiaries (if any).
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Another benefit of a Foundation in comparison to a Trust is that it usually is less expensive as it is not required to have a licensed or resident Councillor.
What is the Foundation’s Charter?
The Seychelles Foundation Charter is the Foundation’s initial formation document. This document sets out the initial provision that will rule the Foundation. The information that is not included in the Charter is then agreed or provided in the Charter’s Regulations.
What must be included in a Foundation's Charter?
A charter shall specify the following ─ (a) the name of the Foundation; (b) the name and address of the founder or of each of the founders; (c) the object for which the Foundation has been established; (d) the initial assets of the Foundation; (e) where the Foundation has been established to carry on a specified purpose, the details of the specified purpose; (f) the establishment of a council; (g) the name and address of the Foundation's registered agent in Seychelles; (h) the address of the Foundation’s registered office in Seychelles; (i) that ─ (i) the Foundation is to be wound up and dissolved upon the happening of an event or the expiration of a fixed period of time including details of the event or period; or (ii) the period of time for which the Foundation has been established is indefinite; and (j) the manner in which a beneficiary of a Foundation is appointed. Subject to the Act, the charter may, in addition to the details in subsection (2), ─ (a) provide for the Foundation to be endowed with supplementary assets; (b) provide for the name and address of each of the initial councillors; (c) provide for the appointment and removal of a councillor; (d) establish the manner in which decisions of the council are to be made; (e) provide for ─ (i) the designation of any initial beneficiaries or any beneficiaries to be designated at a later date; (ii) the names and addresses of any beneficiaries; and (iii) the identification of any remaining beneficiary upon the winding up of the Foundation; (f) provide for the addition or removal of a beneficiary; (g) provide for ─ (i) the appointment of one or more persons to act as protector or protectors respectively; (ii) the duties, powers, functions and rights, including the rights to remuneration, of a protector; and (iii) the removal of a protector; (h) provide for the making of regulations; (i) provide for the appointment of a person by power of attorney or otherwise, to carry out particular duties on behalf of the Foundation; (j) provide for the appointment, term of office and removal of an auditor, if any, of the Foundation; (k) provide for the procedure by which the charter or regulations may be amended; (l) provide for ─ (i) the circumstances, if any, in which the Foundation may be continued in or outside Seychelles; and (ii) the conditions to be satisfied in respect of such continuation in or outside Seychelles; (m) provide for the reservation of rights or powers to its founder or founders, as the case may be; (n) provide for the appointment, term of office and removal of any other supervisory person to the Foundation; and (o) provide for any other lawful matter in respect of the Foundation.
Seychelles Foundation Regulations
The Foundation’s regulations is a document signed by the Founder which can set out other provisions omitted in the Charter, including but not limited to, the Foundation’s Councillors and Beneficiaries.
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If the Charter does not include who the Council or the Beneficiary is for privacy purposes, these can be appointed on the Foundation’s Regulations, as the Regulations are not filed with the Registrar, hence not accessible to the Public.
The Charter will prevail against the Regulations in case there is a contradiction between them.
Privacy and Public Records
The only document submitted to the Registrar to form the Foundation is the Foundation Charter. In regards to the Party’s identifying information, the Charter is only required to name of the Founder.
A Nominee Founder can be used to obtain extra privacy.
Parties of a Seychelles Foundation
The Parties in a Seychelles Foundation are:
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Founder
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Councillor(s)
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Protector (optional)
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Beneficiaries (optional)
Founder
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The founder can be an individual or a company.
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The founder can be a Councillor but not the only councilor.
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The founder can be a Nominee for extra privacy.
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The Founder can also be a nominee.
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The name of the funder must be added to the Charter.
Councillor
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A Seychelles Foundation is managed by a Council, which is integrated by one or more Councillors.
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Councillors can be individuals or corporate entities.
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Councillors do not need to reside or be licensed in Seychelles.
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A Founder can be a Councillor as long as the Founder is not the only Councillor.
Beneficiary
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The appointment of a Beneficiary is optional.
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The beneficiary can be one or more individuals or companies who receive Distributions according to the Foundation’s Charter and/or Regulations.
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​The Founder can also be a beneficiary as long as the Founder is not the sole beneficiary.
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A Foundation does not need to appoint a beneficiary for it to exist. A Founder can elect in the Charter or Foundation Regulations not to appoint a beneficiary at the moment of creation, and can elect to appoint a beneficiary at a later stage.
Management and Assets
Seychelles Foundation Management
A Foundation is managed by a Council which is integrated by Councillors
Assets Ownership and Management
The Foundation assets are owned by the Foundation itself, and not by the Founder or Beneficiary (if any). These assets are managed in accordance with the Foundation’s Purpose and objectives.
Minimum Initial Asset required
To open a Seychelles Foundation it is only required that the initial asset capital be US$1.
What assets can a Seychelles Foundation hold?
The foundation can hold any type of assets, including shares and bank accounts in Seychelles, but it cannot hold other type of assets in Seychelles like Real Estate or Movable property in Seychelles
Taxation of a Seychelles Foundation
Foundations established in Seychelles are not subject to any type of taxes in the Seychelles, but the distributed or undistributed income might have tax consequences to the beneficiary depending on the beneficiary's tax residency.
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