Services · Trusts & private foundations

Seychelles trust

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

A Seychelles trust is not a company and not a legal entity. It is a relationship: a settlor transfers property to a trustee, who becomes its legal owner and must administer it for the beneficiaries on the terms of the trust instrument. After the transfer neither the settlor nor the beneficiaries own the assets. What the beneficiaries have is the right to proper administration and to whatever the instrument provides.

The single most important thing to know about a Seychelles trust today is that the old statute is gone. The International Trusts Act 1994 was repealed by the Trusts Act 2021, in force since 6 August 2021. Material online that still cites the 1994 Act and a 100-year maximum trust period is out of date. Trusts registered under the old law are treated as re-registered automatically and keep their reference number.

If you need a structure with a separate legal entity and no trustee at all, look at the Seychelles private foundation, where ownership works on a completely different principle. Jurisdiction comparisons sit in trusts and private foundations.

What the Trusts Act 2021 changed

The new statute consolidated the rules for Seychelles and foreign trusts into one act and rewrote the key provisions. What matters in practice:

• Form. A trust is created in writing only: either by a declaration of trust executed by the trustees, or by a trust deed between settlor and trustees transferring the property.
• Proper law. The proper law of a Seychelles trust is the law of Seychelles.
• Trustee. Every trust must have an approved trustee - a licensed Seychelles trustee. Co-trustees are permitted and may be non-resident. For connected trusts a private trust company can act as the approved trustee.
• Registration. The trustee files a trustee appointment declaration with the Authority stating the trust name, date of formation, name and address of each approved trustee, the proper law, confirmation the instrument is in writing, and confirmation that the trust property includes no Seychelles immovable property. False or misleading information in the declaration carries a fine of up to USD 25,000.
• Duration. The rule against perpetuities is abolished: a trust may continue indefinitely. Under the old statute the maximum was 100 years.
• Prohibition. A Seychelles trust may not hold immovable property in Seychelles, nor shares in a company that holds any interest in such property.
• Purpose trusts. A trust with no identifiable beneficiary is valid only if the terms provide for an enforcer and for the appointment of a replacement.

Notices of change must be filed within 21 days, with a penalty of up to USD 5,000 for late filing. These are Seychelles state fees, not our charges: the licensed trustee's remuneration is separate and usually makes up the bulk of the budget.

Who is involved and who does what

A word on the letter of wishes. It is not required by statute, but it is what actually shapes trustee decisions after the settlor dies or loses capacity. It does not bind the trustee legally - and that is the point, because binding directions turn a trust into a revocable one. A stale letter of wishes is among the most common causes of family disputes over trusts, so it should be revisited whenever the structure is reviewed.

Powers the settlor may keep

Section 16 of the Trusts Act 2021 is the most practical provision in the statute. It lists powers whose reservation does not invalidate the trust:

• to revoke, vary or amend the terms of the trust;
• to direct or approve distributions of income or capital;
• to act as, or appoint and remove, directors of a company owned by the trust;
• to direct the trustee on the purchase, retention, sale, management, lending or pledging of trust property;
• to appoint or remove any trustee, enforcer, protector or beneficiary;
• to appoint or remove professionals acting in relation to the trust;
• to change the proper law of the trust and the forum of administration;
• to require the settlor's consent before a trustee exercises a power;
• to retain a beneficial interest in the trust property.

The statute adds that holding such a power does not make the holder a trustee or impose a fiduciary duty, and that a trustee complying with a lawful direction is not in breach of trust.

It reads like the perfect arrangement, and that is exactly where to pause. Reserved powers are ordinary Seychelles law. Whether your country of residence treats such a trust as genuinely separating the property is not a question of Seychelles law at all. The more you keep, the easier it is for a tax authority or a court at home to treat the trust as revocable and the assets as yours. The sensible practice is to reserve as little as possible, exercise influence through a protector and a letter of wishes, and keep a power of revocation only if you fully understand the tax consequences where you live.

Asset protection: two years and the beyond reasonable doubt standard

The key provision is section 67.

As a general rule a transfer of property to a trust is not void, voidable or liable to be set aside by reason of the settlor's bankruptcy or a creditor's claim. The exception: the court must set the disposition aside if satisfied beyond reasonable doubt that it was made either with intent to defraud and at an undervalue, or at a time when the transferor was insolvent or became insolvent as a result. The obligation must have existed at the date of the disposition and the transferor must have had actual notice of it.

Three details that rarely get written down:

• The burden of proving intent to defraud rests on the creditor, not on the trustee or the beneficiaries.
• The standard of proof is beyond reasonable doubt - a criminal standard, not the civil balance of probabilities. That is a very high bar.
• No action may be commenced later than two years from the date of the relevant disposition. The clock runs from the transfer, not from the date the creditor found out about it.

Add section 66. Questions of the validity of the trust, the validity of a transfer, the settlor's capacity, administration and the extent of powers are determined by Seychelles law alone. Foreign forced heirship rules and foreign judgments inconsistent with that are not enforced in Seychelles.

And the honest caveat, without which this section would be advertising. All of the above describes what a Seychelles court will do. A creditor holding a judgment from their own court, who knows where the assets physically sit, usually goes not to Seychelles but to the assets: the bank, the broker, the share register. The Seychelles shield helps where the chain has to run through Seychelles and helps very little where the assets are within reach at the place of the dispute.

Two further provisions are worth knowing. Sections 79 and 80 let the court set aside a transfer to a trust, or the exercise of a power, made under a mistake - which cuts both ways and occasionally rescues a structuring error. Claims against the trustee run on a different clock: there is no limitation period at all for trustee fraud, and three years for breach of trust from delivery of the final accounts or from the date the beneficiary, protector or enforcer first knew of the breach.

The register of trusts, confidentiality and information exchange

The claim that Seychelles has no register of trusts has been wrong since 2021 and was imprecise before that.

The Authority keeps a Register of registered trusts. It is open to inspection by any person on payment of a fee and contains the trust name, its reference number, the name and address of each approved trustee, the date the declaration was registered, the date of any termination notice, and the date of any court order setting the trust aside.

What the register does not contain: the settlor, the beneficiaries, the protector, the composition or value of the assets, or the text of the trust instrument. No other document filed with the Authority is open to inspection, apart from the trustee appointment declaration itself.

This is, incidentally, the case where a trust is more confidential than a foundation: a foundation's charter, carrying the founder's name and address, is publicly available too.

Then come the layers that are not public but do exist, and it is better to know about them upfront.

• Beneficial ownership register. Under the Beneficial Ownership Act 2020 it is kept by the Seychelles trustee, and the Financial Intelligence Unit maintains a central, non-public database. Access sits with authorised officials and, in the prescribed manner, with locally licensed agents and banks.
• The Authority's duty. The Authority must keep the information it receives confidential, but that duty falls away on a court order, where another statute requires disclosure, and with the trustee's written consent. Breach is a criminal offence.
• CRS. A professionally managed trust is usually a financial institution and reports through its trustee, bringing the settlor, the protector and beneficiaries who received distributions into scope. Where the trust is a passive non-financial entity, the bank reports its controlling persons.

The conclusion is simple and best accepted early. A stranger off the street will not see your structure. The tax authority where you are resident, through the normal exchange channels, will. Anyone selling you an anonymous trust is selling something that does not exist.

Tax and ongoing administration

Since 1 January 2019 Seychelles applies territorial taxation: Seychelles-source income is taxable, foreign-source income is not. For a trust holding foreign assets with no activity in Seychelles, local tax normally does not arise.

What the statute requires directly: if a trust derives assessable income in Seychelles, the trustee must notify the Authority in writing within one month, describing the activities that give rise to it, and within one year file an annual return with financial statements meeting Companies Act requirements. A copy of the notice goes to the Revenue Commission. Breach carries a penalty of up to USD 5,000. Instruments relating to the formation of a trust, transfers of property to or by it, transactions in beneficiaries' interests and security interests over trust property are exempt from stamp duty, except where Seychelles immovable property is involved.

After that come the obligations that have nothing to do with Seychelles, and they usually drive the economics of the whole structure.

• Controlled foreign company rules and trust attribution rules in the settlor's country of residence, which in many cases tax the settlor on trust income regardless of distributions.
• For settlors or beneficiaries in the EU and the UK: domestic trust taxation, anti-avoidance provisions and, in several countries, mandatory registration in a national trust register.
• A beneficiary with a US tax connection triggers a separate and very heavy foreign trust reporting regime. That is a case where the structure has to be designed together with a US adviser, not afterwards.

Running costs: the licensed trustee's annual remuneration, compliance reviews, state fees on notices, accounting and record retention. The trustee fee is the main line and depends on the size and nature of the assets, the number of beneficiaries and whether an operating business sits inside the structure. That is why there is no fixed trust price on the list: we quote after working through the actual case. Country tax regimes are collected in taxes by country.

Who a Seychelles trust is not for

• Anyone who wants to keep real control while telling the tax office the assets are not theirs. Reserved powers are lawful in Seychelles, and they are precisely what gives your country of residence the argument that the trust is revocable and the property is still yours.
• Anyone who arrives after a claim or once it is clear a claim is coming. Section 67 protects a bona fide transfer, not flight from a known debt.
• Anyone looking for anonymity. The trustee must know the settlor and the beneficiaries, a beneficial ownership register exists, and information exchange works.
• Anyone expecting a trust to be cheaper than a foundation. A trust has no fixed annual state fee on the scale of a foundation, but it does carry the ongoing remuneration of a licensed trustee, which sets the budget and rises with the complexity of the assets.
• Anyone with complex capital: several families, an operating business inside the structure, a planned listing, creditors across jurisdictions, disputes among heirs. That work goes to Jersey, Guernsey and the other large centres - not because the statute is fundamentally better, but because the trustee market is deeper, the case law richer and the banking reaction calmer.
• Anyone whose assets include Seychelles real estate. The statute prohibits it outright, and an intermediate company does not solve it: the prohibition extends to shares in companies holding such property.

What actually goes wrong after a trust is set up. A bank declines an account for a structure with a Seychelles trustee, and you must either change bank or change jurisdiction. The trustee refuses to act on the settlor's wish because it conflicts with the trust instrument, and nobody agreed in advance how such decisions get made. The settlor dies, the letter of wishes is ten years stale, and the beneficiaries fall into dispute. The country of residence changes its rules and a neutral structure becomes expensive to run and report. The first three are a matter of document quality and trustee selection at the outset. The last is a matter of reviewing the structure regularly rather than treating it as a one-off transaction.

Trust or foundation, and what we do

We start not with registration but with the question of whether Seychelles fits your case at all, or whether another jurisdiction makes more sense. If Seychelles fits, the work runs on: selecting a licensed trustee, agreeing the trust deed and the letter of wishes, defining the protector's powers, supporting the transfer of assets, and registering the trustee appointment declaration. After that comes administration: changes to the structure, dealing with the trustee, reporting, and a review whenever your tax position changes.

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.

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