Guide To Seychelles Asset Protection Provisions

The article below discusses the Seychelles asset protection provisions and how to use it with a Seychelles trust. 

In common law jurisdictions, it is widely accepted that trust is a distinct legal relationship rather than an actual entity. An independent third party (the “Trustee”) receives certain assets through a Trust from the asset’s owner (the “Settlor”). In turn, the Trustee is required by law to keep these assets in good condition and manage them for the benefit of another person or group of people (the “Beneficiaries”). 

Seychelles trusts can be used for a variety of purposes, including wealth management, estate planning, and charitable purposes. Asset protection provisions significantly decrease the possibility of losing assets. One of the common approaches to keep your assets out of the hands of creditors is to use offshore asset protection trusts.

IMPORTANT ROLES IN THE SEYCHELLES TRUST

• The Settlor

The settlor is the individual who “provides property for a trust or makes a testamentary transfer of property on trust or to a trust.” In essence, the settlor establishes the trust by transferring specific property that they possess to another person (the trustee) with the explicit direction that the asset be held for the benefit of a third party. The Settlor may be a natural person or a business.

• Trustee

The organization that inherits control of the assets from the Settlor is known as a Trustee. According to the guidelines outlined in the Trust Deed, a Trustee will oversee the management of the Trust’s assets for the benefit of the Beneficiaries. Trustees cannot use the assets to serve their personal interests and must manage the assets to the best of their abilities. In the Seychelles, trustees must also meet strict requirements for professional licensing.

• The Beneficiary

A beneficiary is an individual for whom a trust asset is held in trust. A sufficiently specified group of people (for example, “all children and grandchildren”) may be the beneficiary or beneficiaries, who may be specifically established in the trust deed. In a unique twist, a trust’s settlor may also be listed as the beneficiary, although they are not required to be the only beneficiaries. The Seychelles also supports general-purpose trusts and trusts established for charitable reasons.

• Protector

A Protector supervises the appointment of Trustees and gives the Trustees guidance in his or her capacity as a supervisor of the Trustees. Additionally, the Protector’s approval is required before the Trustee can use certain assets. Although a Protector is not necessary for all Trusts, a Settlor may decide to name one in order to guarantee that the assets held by the Trust are handled properly.

ASSET PROTECTION

The Settlor’s estate no longer includes property that has been transferred to a Trust by the Settlor. As the assets of the trust are not regarded as belonging to the settlor, potential creditors of the settlor have no access to them. Furthermore, as these assets are not regarded as belonging to the settlor’s estate, the settlor cannot be charged with a crime for failing to disclose or report them.

The Trust must be established far in advance, ideally at a time when the Settlor could not even foresee the existence of future creditors for asset protection purposes. If not, the Trust may not be upheld as genuine. Trusts created with the intention of fending off claims from current creditors are commonly determined to be fraudulent and so invalid. As a result, trust planning should start early.

PROCESS OF STARTING A SEYCHELLES ASSET PROTECTION COMPANY

• The initial step is to select a licensed company consultant, such as Relin Consultants, who can assist you in managing the procedure better and simpler. 
• The next step is to submit the fundamental set of paperwork required for establishing an asset protection company in the Seychelles. Here is a list of what is essential:
  • Identity proof of the shareholder(s);
  • Address proof of the shareholder(s);
  • Detailed business plan;
  • Trust Deed;
  • Registration fees;
• After submitting the required documents, the application will be sent to the appropriate authorities for additional review, and the appropriate approvals must be obtained in accordance with that.
• Following the completion of the inspection, the appropriate approval will be given, serving as the business structure’s legal authorization to conduct the necessary operations without difficulty.
• Additionally, one must be sure to open an offshore bank account following completion.

Refer to Seychelles corporate bank account opening to know more.

ADVANTAGES OF SEYCHELLES ASSET PROTECTION PROVISIONS

• Strong privacy regulations in Seychelles safeguard the secrecy of both personal and business data. This is beneficial for people and businesses who want to keep their financial matters private.
• Seychelles provides advantageous tax policies, including the exclusion of IBCs and LLCs from all Seychelles taxes, which can result in significant tax savings for both firms and individuals.
• Seychelles provides a variety of corporate structures, including IBCs, PCCs, trusts, and LLCs, that can be customized to meet the needs of various organizations and individuals.
• The offshore banking industry in Seychelles is expanding and provides customers with high levels of confidentiality and anonymity.

Reach out to us at Relin Consultants for further assistance.