Seychelles Foundation Overview

The Seychelles Foundation Act 2009 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 an ideal entity for to carry out private purposes such as family succession/estate planning and asset protection (a "Private Foundation") , charitable purposes (a "Charitable Foundation) a specific purpose (a "Purpose Foundation") or any combination of the three.

A Seychelles Foundation is a separate legal entity (like a company) but with beneficiaries rather than shareholders (like a trust). 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 a Seychelles Foundation are not the “owners” of the Foundation and have no legal rights to its assets nor control over its decisions. Both of these features can be particularly useful in tax planning as well as providing significant asset protection advantages.

The Seychelles Foundation is 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” similar to a trust which would normally 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 another person such as the right to remove and add beneficiaries or perhaps to direct the investments of the Foundation. Since it is a separate legal entity, this would not expose the Foundation to a “sham” argument or debate over “certainty” as it would with a similarly structured trust.

General

Location – Seychelles is located in the Indian Ocean 1500 km east of Africa
Legal System - Common Law/Civil Law Hybrid
Official Languages - English (Business), Creole, French
Political Stability - excellent

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

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 Foundation assets may include -
a any entitlement or interest as a beneficiary in another Foundation under this Act 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 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 -
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.