- Seychelles private Foundations are governed by the Foundations Act, 2009.
- A Foundation is a legal entity and is subject to state registration. A Foundation Charter is to be filed with the Registrar which thereafter issues a certificate of registration.
- The purposes of a Foundation include management of its assets and distribution of profits from such activity between beneficiaries.
- A Foundation has no capital subscription and has no shareholders (members).
- A Foundation must have registered office and registered agent in Seychelles with local Foundation services license. A Foundation may not operate in Seychelles.
- Legal entities and/or individuals of any residency may be founders of a Foundation.
- A Foundation Charter is a public deed. Regulations is a Foundation’s internal document. Both Charter and Regulations must comply with the Foundations Act.
- Beneficiaries of a Foundation may be identifiable by name or be ascertainable by reference to a class or a relationship to another person. A founder may be a beneficiary (but a founder may not be a sole beneficiary).
- The minimal value of a Foundation’s initial assets must be not less than USD1 or the equivalent. A Foundation’s assets may include any property or valuable rights, including shares, real estate (except located in Seychelles), trademarks etc.
- A Foundation’s management body is a Council which consists of one or more persons. Despite the fact that the Foundation’s assets are managed by the Council, a founder may reserve a number of supervisory powers in respect of the Foundation’s affairs.
- A protector may be appointed to supervise the Council’s decisions in the interests of beneficiaries.
- A Foundation may operate for a limited or unlimited period.
Use of Foundations
- Corporate and tax planning (a Foundation as a part of international corporate structure);
- Asset protection and management;
- Securing the intended way of succession;
Advantages of Foundation
- A separate legal personality. A Foundation acts in civil transactions on its own behalf and is independently liable for its obligations.
- Tax exemption. The Foundation’s income as well as payments to non-resident beneficiaries are exempt from taxes in Seychelles.
- Confidentiality. The councilors must keep the information on exercising their powers confidential.
- The beneficiaries may be fixed in the Charter or in the Regulations. A method of appointment of beneficiaries may be indicated in the Charter (public deed), while the names of beneficiaries, rules of their admission and exclusion, amount and manner of payment to the beneficiaries may be fixed in the Regulations (the internal document of a Foundation).
- Flexibility. The Act gives a wide discretion in formulating the provisions of Foundation’s documents. In a number of cases, the Charter or Regulations may contain provisions different from the optional rules of the Act.
- Legal protection of founders’ and beneficiaries’ interests. The assets transferred to a Foundation by a founder become the Foundation’s property. The assets of the Foundation may not be used to satisfy obligations of the founders or beneficiaries (provided that the Foundation is organized in a legally correct way).
- A Foundation or a transfer of property to a Foundation cannot be held void or legally defective by reference to a foreign rule of forced heirship or any other written law of a foreign jurisdiction. The respective judgements of foreign courts will not be recognized or enforced in Seychelles.
Limitations of a Foundation
- In countries which have controlled foreign companies’ (CFC) legislation the income of a Foundation may be taxed at the level of its founders or beneficiaries resident in such countries.