Services · Trusts & private foundations

Seychelles private foundation

Open pricing. The final quote is fixed in writing before work starts.

A Seychelles private foundation is a legal entity with no shareholders and no participation interests. It has no owners in the usual sense: the assets belong to the foundation itself with full legal and beneficial title, and the foundation council deals with them under rules the founder wrote in advance. The vehicle runs on the Foundations Act 2009, a standalone statute Seychelles drafted with the Panamanian and Liechtenstein models in view, then topped up with its own asset protection provisions.

Demand for the tool usually comes from three situations: you need to break the direct link between a person and a pool of assets, you need to set succession outside forced heirship rules, or you need a holding layer above several companies and accounts. A Seychelles foundation covers all three at a fraction of Liechtenstein or Austrian cost. You pay for that partly in money and partly in the jurisdiction's reputation, and that trade-off gets its own section below, without varnish.

If a common law structure with no legal entity suits you better, see the neighbouring page: Seychelles trust. The difference is fundamental - a foundation owns its assets directly, a trust owns them through a trustee. The full menu sits in trusts and private foundations.

What the Foundations Act 2009 actually requires

The statute is short and the requirements are light. That is exactly why a foundation registers quickly, and exactly why banks look at it harder than at a European structure.

Note the one dollar figure. All it means is that the legislator declined to impose a capital threshold. The statutory minimum and the minimum a registered agent or a bank will actually service are two different numbers. In practice a foundation is endowed with real assets at the outset or under an undertaking to endow, which the foundation itself can enforce against the founder (s. 10).

Founder, council and protector

Founder. The person who signs the charter and endows the foundation. The statute allows rights to be reserved to the founder: to appoint and remove councillors, approve distributions, amend the regulations, appoint a protector. Those rights can also be assigned to someone else. Convenient and risky in equal measure: the more control you keep, the easier it is for an opponent or a tax authority in your country of residence to argue that the foundation is your wallet under another name.

Councillor. The person who actually runs things. The council must carry out the objects of the foundation and manage its assets. There can be a single councillor, councillors may be non-resident and may be corporate. There is one hard prohibition: neither the founder nor the protector may be the sole councillor. The do-it-all-yourself version of a foundation is closed off by the statute.

Protector. A supervisory figure appointed under the charter, the regulations or by the court. A protector is typically given a veto over significant distributions and the power to replace the council, without getting drawn into day-to-day management.

Beneficiary. Appointed by the charter, the regulations or the council itself. One provision matters more than the rest: the statute states expressly that no fiduciary duty is owed to a beneficiary, and that a beneficiary has no rights in specie over particular assets. Until a distribution is made a beneficiary owns nothing - only an expectation. That is the protection mechanism: a beneficiary's creditor has nothing to attach.

We supply a professional councillor and a professional founder where a client needs their own name kept off the charter. Why that is a question at all is the subject of the next section.

Charter and regulations: what is visible from outside

This is where most of the confusion about Seychelles foundations lives, so it is worth going through the statute line by line.

A foundation has two documents. The charter is constitutional: name of the foundation, name and address of the founder or founders, objects, initial assets, the establishment of a council, the agent's name and address, the registered office, and the duration. The regulations are internal: who the beneficiaries are, their entitlements, on what conditions and in what order distributions are made, who the protector is, how the council changes.

The Registrar keeps a Register of foundations. It is open to public inspection on payment of a fee and contains the name and registration number, the registered office address, the name and address of the registered agent, the name and address of each councillor, the date of establishment, the fee status and details of any striking off or dissolution. Beyond the Register itself only three categories of document are open to public inspection: the certificate of registration, the certificate of dissolution, and the charter or amended charter.

The charter. Which means the founder's name and address, which the charter is required to carry, are available to anyone for a fee of around USD 75. That has never been a secret, whatever a good many websites say. The regulations naming the beneficiaries are not public, council minutes are not public, accounts are not public.

The practical conclusion. If the point is to keep a name out of the public domain, you use a professional founder who signs the charter and immediately assigns their rights under s. 26. If the point is to protect who the beneficiaries are and how they are paid, the regulations do that on their own, with no extra engineering.

Separately there is the Beneficial Ownership Act 2020. Since 2020 every Seychelles foundation must keep a register of beneficial owners with its registered agent, and the Financial Intelligence Unit maintains a central database. That database is not public: access sits with authorised officials and, in the prescribed manner, with locally licensed agents and banks. There is no anonymity from the state at all. There is non-publicity from outsiders, which is a very different promise.

Asset protection and the two-year window

The statutory mechanics are worth knowing by section rather than by paraphrase.

Section 71. Assets transferred to a foundation become the foundation's assets with full legal and beneficial title and cease to be the founder's. Not nominally recorded in the foundation's name - they stop belonging to the founder. Nor do they become a beneficiary's assets until distributed.

Section 72. Neither the foundation nor a transfer of property to it can be set aside by reference to a foreign forced heirship rule. A foreign judgment inconsistent with that is neither recognised nor enforced in Seychelles.

Section 73. The founder's bankruptcy or a creditor's claim does not of itself bring the foundation down. But the court may declare a transfer void where it is proved that at the time of the transfer the founder was insolvent or intended to defraud a creditor. The onus of proving intent rests on the creditor.

Section 73(4). Any such claim is barred absolutely on the expiry of two years from the date the property was transferred to the foundation.

Section 74. A beneficiary has no rights in specie, and assets available for distribution cannot be alienated on bankruptcy or seized, sold or taken in execution.

Two years is short by international standards and is the main practical edge Seychelles has over jurisdictions where the window runs four years or longer. It also has a flip side that deserves saying out loud: that clock runs in a Seychelles court. If your assets physically sit in a European bank and the dispute is heard in a European court, the local judge will apply local rules on setting aside a debtor's transactions, and the Seychelles two-year bar will at best be an argument rather than an obstacle. Asset protection works where the assets are, not where the charter was signed.

Two rules follow. First, a foundation is set up before a dispute exists, not after a claim lands. A transfer made under the shadow of a known claim is challengeable almost anywhere. Second, the only structure worth building is one where the assets have also moved beyond an opponent's quick reach. A Seychelles foundation with an account in the country where you are being sued is decoration, not defence.

Tax, economic substance and reporting

People still write that a Seychelles foundation is completely tax exempt. Formally Schedule 2 does list the Business Tax Act, the Social Security Act, the Foreign Exchange Act and the Stamp Duty Act, and s. 110(2) separately rules out estate, inheritance, succession and gift tax on property transferred to or held by a foundation. Under s. 110(3) those concessions run for 20 years from registration and continue afterwards unless legislation provides otherwise.

The bigger picture changed on 1 January 2019, when Seychelles moved to territorial taxation. The logic now is that Seychelles-source income is taxable and foreign-source income is not. For a foundation holding shares in foreign companies and a portfolio with a foreign broker, with no activity in Seychelles, local tax normally does not arise. Everything after that depends on your facts rather than on a general page.

Country-by-country tax regimes are collected in taxes by country, and ongoing reporting for Seychelles structures sits in Seychelles audit and accounts.

How banks treat a Seychelles foundation

Plainly: it is hard work. That is not a reason to drop the tool, but it is a factor to plan around from day one rather than discover after registration.

Seychelles is a classic offshore jurisdiction with fast incorporation, a token minimum capital and no residency requirement for governing bodies. The country spent 2020 and 2021 on the FATF grey list and came off it, and the legislation has been tightened noticeably since - a beneficial ownership register, mandatory accounting records, an economic substance regime. But compliance departments have long memories and internal risk models move slower than statutes. In practice:

• Large European and Swiss banks decline a Seychelles foundation in the great majority of cases, even with a fully transparent structure and clean source of funds. The refusal comes without reasons and there is no point in arguing it.
• What works are banks in jurisdictions that deliberately serve the offshore segment, Seychelles banks themselves, and some Asian and Middle Eastern institutions. Documentary standards there are strict: source of funds, the full chain down to individuals, the foundation's regulations, sometimes an interview with a councillor.
• A brokerage or custody account is generally easier to obtain than a transactional bank account, provided the foundation is honestly presented as an investment holding structure rather than a payment conduit.
• Timelines run in weeks and months. A refusal at any stage is possible and normal, so it is sensible to run two or three applications in parallel.
• A periodic file review after a year or two is routine, and accounts do get closed as a result. A backup account is not a sign that something is wrong with you - it is how the market works.

We say all of this before registration, not after. If your plan depends on one particular bank, find out first whether it will entertain a Seychelles structure at all, and only then register. Account selection and support is a separate service: corporate accounts.

Who a Seychelles foundation is not for

A short list, but every item on it costs money if ignored.

• Anyone already in a dispute. The two-year bar in s. 73(4) does not cure a transfer made with intent to defraud a known creditor. A foundation created after a claim lands is not protection - it is another chapter in the file and an invitation to argue bad faith.
• Anyone who wants to remain the sole decision maker. The founder cannot be the sole councillor. And if reserved powers and powers of attorney mean you decide everything anyway, the structure is easily recharacterised at home as nominee ownership, with the tax consequences that follow.
• Anyone counting on anonymity. The founder's name in the charter is publicly available, beneficial owners sit in the agent's register and the FIU database, and accounts are in CRS. Anyone promising you an anonymous Seychelles foundation has either not read the statute or is misleading you deliberately.
• Anyone who needs the jurisdiction to impress. In front of a bank, an institutional investor or a large counterparty, Seychelles loses to Liechtenstein, Jersey and Guernsey outright. If that is your case, look at a Liechtenstein private foundation or a Panama private foundation instead.
• Anyone whose assets include Seychelles real estate. That is a separate exercise and a foundation is not the answer.
• Anyone planning to leave the foundation unattended. Missing the annual fee leads to striking off, and restoration costs more and takes time. Reporting breaches carry fines, and a councillor can be personally liable.

Things that go wrong after registration: the registered agent resigns following an internal review, the bank closes the account at a periodic refresh, CFC rules change in the founder's country of residence, or a councillor and the beneficiaries fall out because nobody wrote proper regulations. The first and third are handled by having a fallback ready in advance, the second by holding more than one account, the fourth by drafting the regulations properly rather than downloading a two-page template.

Fees

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees and bank tariffs are billed separately unless explicitly included.

FAQ