Valsen Corporate

Seychelles Foundation

The Seychelles Private Interest Foundation(“PIF”) is the latest cutting edge tax planning/asset protection product to come out of the booming tax haven of Seychelles.
Passed into law in December 2009 the Seychelles Private Interest Foundation draws heavily on the more popular aspects of the Panama and Liechtenstein models, but includes its own unique features, sure to make it attractive particularly to those clients for whom asset protection and tax minimisation is a major focus.
The primary benefits of the Seychelles Private Interest Foundation are in terms of the opportunities it offers by way of Tax deferral, Succession planning and Financial Privacy. (The law also contains some of the strongest asset protection provisions ever conceived for a structure of its kind).
Neither the names of the person/s establishing the PIF nor the persons who are to benefit from the PIF have to be disclosed to the Registry and the structure is easy to register – achieved by simply filing the Foundation Charter (which document does NOT have to include the Founder or the Councillors’ names).
The Seychelles Foundation law is cleverly drafted in that it provides that, until such time as Foundation property is actually transferred to the beneficiaries, the beneficiaries hold no legal interest in Foundation property. The legal owner of property held by the Foundation is the Foundation itself!
As there are limits to the kind of trading activities that a Foundation can undertake a Seychelles Private Interest Foundation works best when it’s used to hold the shares of your Offshore Company. This dual structure not only makes it all but impossible for creditors/vultures to attack your assets but (given the wording of the Seychelles law) it also creates a scenario whereby you may be able to lawfully avoid having to declare and pay taxes Onshore on your Offshore earnings (unless or until such time as a distribution is paid to you by the Foundation).

General
  • Location – Seychelles is located in the Indian Ocean 1500 km east of Africa
  • Official Languages –  English (Business), Creole, French
  • Political Stability – excellent
  • Legal System – Common Law/Civil Law Hybrid
Foundation Legislation Seychelles Foundations Act 2009
Type of Entity Foundation
Names
  • May be any language, but if other than English or French must be accompanied by a translation to one of these two
  • Names must end with “Foundation”
Taxation Seychelles Foundations are completely exempted from payment of income, capital gains, stamp duty, withholding or any other form of taxation in Seychelles.
Foundation Assets
  1. A Seychelles Foundation shall have a minimum of $1 initial assets
  2. Assets may originate from any lawful source and consist of present or future assets of any nature

In addition to non-Seychelles assets, the Foundation assets may include –

  • Any entitlement or interest as a beneficiary in another Foundation under this  Act or a trust under the International Trusts Act; or
  • 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
  • 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
  • Shall not include immovable properties or other properties in Seychelles, including shares, debentures or other interests in a legal person incorporated or registered, in Seychelles
Founder
  • May be any individual or legal entity (including companies, trusts or even another Foundation)  and may be a “nominee”
  • 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
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)
Protector
  • 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.
Foundation Charter
  • 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.
Foundation Regulations A Foundation may 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).
Registered Agent 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 Costs 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 –

  • All sums of money received, expended and distributed by the Foundation, and  the matters about which the receipt, expenditure and distribution took place;
  • All sales and purchases by the Foundation; and
  • 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