When it comes to having reliable trust funds that can manage all your capital for you in the most efficient way possible, Seychelles just might be the perfect choice for many business owners and investors out there. A Seychelles trust fund is one of the most optimal ways of investing in the resources of the country and the trust industry of Seychelles is reputed throughout the world to be a well-established one. 

Let us find out how these Seychelles trust funds work, what their structure is and what regulations they have in place to keep everything under control. 

What is a Trust in Seychelles? 

A trust is not an entity of itself but rather a specific legal relationship which is widely recognized by most common law jurisdictions around the world. Via the means of a trust, the owner of certain assets (settlor) transfers these assets to an independent third party (trustee). The trustee, in turn, is legally bound to maintain and manage these assets for the benefit of another person or group of persons (beneficiaries).

These three parties work in synchronization to form the fundamental structure of a trust and all of these trusts that can be utilized in the country of Seychelles can be called as Seychelles trusts. Trusts are an important part of the Seychelles economy as many investors want to invest in the country without incurring heavy taxes in the process. 

The Trust Structure

There are several fundamental parts in a functional Seychelles trust that comprise its structure. To invest in these trusts successfully, it is necessary that you understand what these structural components are and what role they play in each trust. 

The Settlor

The settlor is an individual or a legal entity that provides property or a financial disposition in the name of a trust. In simpler terms, a settlor is the founder of a trust because of their property ownership that they gave to the trust. This property is transferred to another individual, the trustee that holds it for the benefit of another third party. The settler can be any individual or financial entity that holds property or disposition in the country.

The Trustee

The trustee is an individual or legal entity that the settlor works with to transfer a property or title to the trust’s ownership. The trustee must agree to a number of instructions that state the trustee should manage the trust and its property solely for the benefit and profit of any beneficiaries who invest in the trust. 

While the trustee is the legal owner of the property and the trust's assets, they are bound by the trust deed to maintain and utilize the property only and only for the trust’s beneficiaries. Thus, being a trustee means having extreme diligence and care while holding the property. The trustee can’t use the property for his own good and is also required to have a professional license to work. 

The Seychelles Trust Service providers have a rigorous set of regulations and requirements for each trustee that wishes to work in Seychelles. All trustees working in Seychelles, including the ones from offshore industries, need to be licensed by The Seychelles Trust Commission before they are allowed to engage in any international financial services. 

Seychelles is particularly strict about the standards and the integrity of the staff working trust firms, about the internal system of each firm and their proper capitalization. 

The Beneficiary

The beneficiary is a third party individual or organization that invests in trust firms and gets benefits from the trust assets managed by the trust’s trustee. The beneficiaries can be defined clearly by name or as a general non-specific group in the trust deed. What’s interesting is that legally, a settlor of a trust can also be its beneficiary provided that they are not the only beneficiary of the trust’s assets. The country of Seychelles also features trusts that are designed for charitable purposes and also those designed for general business purposes. 

The Protector

While not a compulsory part of the trust framework, a protector is often employed by the settlor of a trust to supervise the actions of the trustee. This gives the settlor the additional assurance that their property and assets are properly utilized by the trustee for the sole benefit of the beneficiaries. 

With a protector in the picture, the trustee can’t do most major actions without the legal consent of the protector beforehand. These actions mostly are 

-Adding new beneficiaries or removing old ones.

-Changing the old arrangements of payments for the trust income. 

-Adding or removing trustees. 

If need be, the protector has the ability to even remove or replace the trustee entirely.

While a beneficiary or a settlor himself can serve as a protector of the trust, usually it is a reliable and trustworthy friend or advisor of the settlor that takes up the role. 

It is important to note that despite their extremely crucial role in the trust, protectors are not compulsory to have in the firm. It is completely up to the decision of the settlor and the other members of the trust to have a protector for managing the assets and supervising the trustee’s actions. 

Types of Trusts

The best thing about international Seychelles trusts is while they are irrevocable by default, you can easily create a revocable trust with due permission. Most Seychelles trusts are designed to be discretionary by nature which allows the trusts to cater to the varying demands of their beneficiaries. 

While there are a number of different types of international trusts, the most major ones are  

-International industry trusts. 

-International charitable trusts.

-International general purpose trusts. 

-Commercial trusts. 

-Life insurance trusts. 

-Cash deposit trusts. 

-Trusts resulting from acts of the Court.

While these trusts comprise the majority of trusts in Seychelles, specific trusts that are created solely for the benefit of one individual or one organization can also be created and do not fit in a specific category. 

Seychelles’ Regulation for Trusts

All trust service providers in the country of Seychelles are liable to extremely strict regulations, rules and essential requirements. One of the most primary rules, as discussed before, is that all trusts based on offshore industries must be first licensed by the Financial Commission of Seychelles, before they engage into international financial services. 

All the trusts in Seychelles, including the employees that work inside them, are governed with the help of the International Trusts Act, The International Corporate Service Providers Act 2003 as well as the Anti-Money Laundering Act 2008. To be liable for proper licensing as a trust, all the members of a trust firm must go through a number of competence and integrity verifications. 

More specifically, the trust firms must necessarily provide a high standard of the competence of their staff and their integrity, have all systems of controls in place for internal procedures, and the firm must be fairly capitalized. While these regulations may seem exceedingly strict, they are also quite necessary considering the amount of international business that goes through these trusts. 

What can we do for you?

We at MUNDO have partnered with a very reliable and leading expert in Seychelles ready to help our clients to establish a required trust in Seychelles under very beneficial terms and conditions. Should you need this service, don’t hesitate to contact us for detailed information!