Seychelles: Types of Company
The Seychelles’ Foundations Act 2009 provides for a new addition to the Seychellois portfolio of financial services – Seychelles foundations. Key features and benefits under the Act are as follows:
- A Seychelles foundation is established by a charter made in writing and signed by one or more founders and on the issuance of a certificate of registration by the Registrar (the Seychelles International Business Authority) on registration of the foundation under the Act. On registration, a foundation is a separate legal entity.
- A fee of US$200 is payable to the Registry (Seychelles International Business Authority) when establishing a Seychelles foundation. An annual renewal fee of US$200 is payable thereafter to the Registry (due on the day before the anniversary of the foundation’s initial registration date).
- The assets of a foundation must be of a value of no less than US$1 or the equivalent in any other currency. The initial assets may be endowed after registration of a foundation.
- Unlike in other foundation jurisdictions, it is not mandatory to state in the charter, or to otherwise file at the Registry, the names of the councillors of a Seychelles foundation.
- While the charter of a foundation is required to be filed at the Registry, there is no requirement to file a foundation’s regulations. While a foundation must have a charter, it may adopt regulations. A foundation will commonly adopt regulations, to ensure that matters pertaining to foundation beneficiaries and distribution entitlements remain non-public.
- The objects of a Seychelles foundation may be charitable, non-charitable or both, and may be to benefit a beneficiary or beneficiaries, or to carry out a specified purpose, or to do both.
- A foundation’s Council manages the foundation and is responsible for the administration and distribution of the foundation’s assets and the carrying out the foundation’s objects. A Seychelles foundation must have a minimum of 1 councillor, who may be a natural person or corporate entity.
- A foundation is exempt from Seychelles Business Tax on its income and is exempt from Seychelles withholding tax, social security contributions and stamp duty (except in relation to any permitted lease of Seychelles real estate for own office use).
- A foundation may own assets worldwide. However, the assets of a foundation may not include any Seychelles real estate or other Seychelles property (subject to various exceptions under the Act, including shares in Seychelles IBCs or CSLs, interests under a Seychelles trust, Seychelles limited partnership or another Seychelles foundation, or a Seychelles bank account, etc.).
- A foundation’s founder may be a natural person or a corporate entity, and a founder may be a foundation beneficiary but not the sole beneficiary. Nominee founders are permissible. A founder may reserve, in the foundation charter or regulations, to the founder or for other persons, various rights – such as the right to approve investment activities of the foundation, the right to appoint or remove councillors, protectors and beneficiaries.
- The appointment of a protector (otherwise known as a guardian) is optional. A protector may be a natural or legal person.
- Seychelles foundation assets are the property of the foundation only, that is, neither the founder nor the beneficiaries have any ownership interest in foundation assets.
- While a Seychelles foundation is required to keep proper books of account and records as its council considers necessary in order to reflect the financial position of the foundation, it is not subject to a mandatory annual audit requirement or to any requirement to file financial accounts or annual return in Seychelles.
- The Act provides for continuation of foreign foundations in Seychelles and for continuation of Seychelles foundations overseas. The Act also provides for two or more existing foundations to consolidate into a new foundation and for an existing foundation to merge into another existing foundation.
The Act provides for strong foundation asset protection, including as follows:
- Provisions protecting dispositions to a Seychelles foundation from challenge from creditors of the founder; and a 2 year statute of limitations for creditors’ claims coupled with a high onus of proof (beyond reasonable doubt, rather than on the balance of probabilities);
- Specific exclusion of foreign forced-heirship laws;
- Provision may be made for the foundation to retain title to assets conditionally distributed to beneficiaries;
- Beneficiaries’ rights to information may be restricted;
- Provision may be made to disentitle a beneficiary who challenges asset transfers to or distributions by a foundation.