Seychelles

Seychelles offshore foundations are legal entities established under the Foundations Act, 2009 of the Republic of Seychelles. This relatively modern legislation was enacted to accommodate the growing global demand for flexible private wealth and asset structuring tools while aligning with international regulatory standards. A foundation in Seychelles combines features of both trusts and corporations and is primarily used for asset protection, succession planning, and charitable or philanthropic purposes.

Legal Structure

A Seychelles foundation is a separate legal person, distinct from its founder and beneficiaries. Unlike a trust, which operates based on a fiduciary relationship between the settlor and trustee, a foundation owns its assets in its own name. It is not subject to shareholder control, as in the case of corporations, and is governed by its constitutional documents and administrative body (the council).

Once registered, the foundation acquires legal personality, enabling it to hold assets, enter into contracts, initiate legal proceedings, and carry out its purpose independently of the founder or any other party.

While the Charter is publicly registered, a confidential document known as the Foundation Regulations (optional but common) typically outlines more detailed governance, beneficiary rights, and distribution mechanisms. This separation helps maintain privacy for key operational matters.

There is no requirement to disclose beneficiaries in the public registry, offering a degree of confidentiality within the limits of international standards on anti-money laundering and tax transparency.

Capital and Asset Endowment

Unlike companies, Seychelles foundations do not have share capital. The founder may endow the foundation with an initial asset contribution, though this is not mandatory at the time of establishment. Subsequent transfers of assets may be made at any time during the life of the foundation.

Permitted assets can include bank accounts, real property (except immovable property in Seychelles), securities, and intellectual property. However, the foundation is not allowed to engage in commercial trading activities, except when incidental or necessary to achieving its purposes.

Key Persons

A Seychelles foundation typically involves several key roles:

• Founder: The individual or legal entity that creates the foundation. The founder may be granted certain reserved powers in the Foundation Charter or Regulations, such as the power to amend documents or appoint/remove council members. Founders may be residents or nonresidents of Seychelles.
• Foundation Council: This is the governing body of the foundation, akin to the board of directors of a corporation. It is responsible for ensuring the foundation acts in accordance with its Charter and any applicable laws. A foundation must have at least one council member, who may be an individual or a corporate entity.
• Beneficiaries: The individuals or entities that benefit from the foundation’s assets or purposes. Beneficiaries do not have ownership rights over the foundation’s assets, nor do they necessarily have any control over its operations. Their rights, if any, are determined solely by the foundation’s internal documents.
• Protector (optional): A protector may be appointed to oversee the activities of the council and safeguard the founder’s intent, although this role is not mandatory under Seychelles law.

Uses and Purposes

Seychelles foundations are versatile vehicles and may be used for various legitimate purposes, including:

• Asset Protection: As the foundation owns its assets independently, they are generally shielded from claims against the founder or beneficiaries, subject to applicable laws and limits on fraudulent conveyances.
• Estate and Succession Planning: Foundations can serve as tools for managing and distributing wealth across generations, avoiding probate and maintaining control over how assets are passed on.
• Charitable and Philanthropic Activities: A foundation can be established with wholly charitable purposes or combine private and public benefit aims.
• Holding and Consolidation of Assets: Seychelles foundations can be used to hold shares in companies, intellectual property rights, or real estate (outside Seychelles), thus centralizing ownership and governance.
• DAO: Foundations may also be used for the purpose of supporting decentralized autonomous organizations and representing such organizations in "real world" scenarios.

Taxes

Seychelles offshore foundations that do not derive income from within Seychelles are exempt from local taxation. Specifically:

• No corporate income tax
• No capital gains tax
• No withholding tax
• No stamp duty on transfers of assets to or from the foundation (except for Seychelles-based immovable property)

The foundation is required to maintain adequate accounting records, which must be kept for at least seven years and be available in or accessible from Seychelles. These do not need to be audited or publicly filed unless otherwise required. Copies of accounting records must be kept in the registered office of the Foundation in Seychelles.

A Seychelles foundation may be established for a limited or indefinite duration, depending on the founder’s objectives. The dissolution process is outlined in the foundation’s charter and regulations and must follow the formalities set by the law. Upon dissolution, assets must be distributed in accordance with the foundation’s governing documents and for lawful purposes only.

Seychelles offshore foundations present a robust and adaptable structure for individuals and entities seeking to manage assets independently from their personal or business holdings. Their legal form offers privacy, asset protection, and operational flexibility, while remaining subject to compliance requirements aligned with global transparency standards.