Wealth management in the Seychelles: foundations, trusts and custody banks

A structuring centre more than a banking centre

Wealth management in the Seychelles relies mainly on estate-planning structures such as foundations and trusts, administered by providers licensed by the FSA. Financial assets are often held and managed by banks in other financial centres. The islands have few private banking institutions in the European sense, so securities portfolios are generally booked in Mauritius, Dubai, Geneva, London or Singapore.

The Seychelles have few private banking institutions in the European sense. In Seychelles wealth management, local expertise lies mainly in setting up and administering structures; securities portfolios are generally booked in Mauritius, Dubai, Geneva, London or Singapore.

The 2009 Seychelles foundation

The 2009 Foundations Act allows the creation of a Seychelles foundation, an entity with legal personality, a council and possibly a protector, to hold assets for beneficiaries or a defined purpose. The bank account is opened in the foundation's name.

International trusts administered from Mahé

The Seychelles have legislation on international trusts, administered by FSA-licensed trustees. The bank opens the account in the trustee's name and identifies the settlor, protector and beneficiaries, in line with FATF and OECD standards.

Who is reported under CRS in a foundation or trust

The founder, council members exercising control, the protector and beneficiaries can be reported as controlling persons. Distributions are tracked as well; a French-resident beneficiary therefore has their information sent to the tax authority.

French obligations linked to trusts

A French-resident settlor or beneficiary must declare the trust on form 2181-TRUST, and assets placed in trust fall under French rules on transfer duties and the real estate wealth tax. Choosing the Seychelles does not change these obligations.

Currency accounts and term deposits on the islands

For assets held in the islands, local banks mainly offer current accounts and term deposits in dollars, euros or pounds. The offer of discretionary mandates, diversified funds and custody of international securities remains limited.

Source of wealth: the most scrutinised point

The licensed provider and the bank require detailed proof of how wealth was built: a business sale, an inheritance, professional income over a long period. A vague file or a structure unrelated to the client's life leads to refusal.

Real estate and high-end tourism investment

Part of the wealth linked to the islands is invested in hotels or villas, subject to government approval for foreign buyers. These assets are managed through local companies that have their own rupee accounts.

Relationship with a Seychelles bank

Seychelles Commercial Bank offers rupee and foreign currency deposits to its Seychellois clientele; for substantial wealth it serves rather as a local operating bank than as portfolio manager, a role generally given to a foreign private bank.

Fees, lifespan and exit from a Seychelles structure

A foundation or trust generates annual provider, registration and accounting fees on top of bank charges. Planning distribution, dissolution and succession arrangements from the outset avoids high costs and tax difficulties later.

Steps to organise wealth management in the Seychelles

The first step is to define the objective: protecting family wealth, preparing succession, holding a specific asset or pooling investments. That objective determines the suitable structure, foundation or trust, and the country where the financial assets will be held. An independent legal and tax adviser should be involved before any contact with a local provider, to avoid a structure chosen for the wrong reasons.

The FSA-licensed provider then forms the entity, keeps the registers and identifies the people concerned. Next comes opening the bank account in the name of the foundation or the trustee, often with several institutions: one for local needs, another for custody of securities in a specialised centre. Each bank carries out its own review and may decide differently from the others.

Plan for solid documents: incorporation deeds, certified identity of the founder, council members and beneficiaries, proof of address and detailed evidence of the source of wealth. A wealth management structure in the Seychelles whose economic purpose is hard to explain will be examined for longer. A realistic timetable runs to several weeks, or more depending on the number of countries involved.

Seychelles foundation or trust: questions for the provider

Ask the provider who actually administers the structure, what powers the founder keeps, what role the protector plays and how investment decisions are taken. A Seychelles trust or foundation must not become an empty shell: effective control and the rights of beneficiaries should be described in the deeds, clearly and consistently with your family situation. Ask for each answer in writing.

Have the fees itemised: formation, annual registration, administration, accounting, trustee or advisory fees and bank charges. Also ask how deeds can be amended, how distributions to beneficiaries are made and how the structure is dissolved. These rules, often neglected at the outset, determine the real cost of the structure over ten or twenty years and how easily it can evolve.

Check the reporting duties: annual accounts, registers, information sent to the authorities and record-keeping. The provider should be able to explain what it reports and to whom. If answers stay evasive, or if you are promised absolute discretion, treat that as a warning sign. A serious estate-planning structure relies on transparency, not on secrecy. The deeds should state this plainly.

Wealth management in the Seychelles: choosing the custody bank

Local banks mainly offer current accounts and term deposits. For portfolios of securities, funds or discretionary mandates, the foundation or trust generally turns to a private bank in another centre. Compare institutions on their soundness, product range, custody fees, mandates offered and experience with foreign structures. Ask for a sample set of statements. Statements should show positions, fees and cash clearly.

Ask the custody bank about its acceptance policy for foundations and trusts, the documents it requires and the minimum level of assets requested. Some prefer structures whose council genuinely meets and whose documentation is complete. Others refuse structures whose beneficiaries live in certain countries. These criteria vary and are never guaranteed. Choose a custodian that explains its criteria openly. Vague acceptance can turn into a refusal later.

For wealth management in the Seychelles, keep in mind that the Seychelles bank mainly serves as an operating bank. Check who holds the securities, in which country, under what asset protection regime and under what procedure if the custodian fails. Ask for regular statements in the name of the structure and keep them with the council's decisions. A short call to the bank can confirm the position.

Tax reporting and checks before structuring wealth

Banks and providers collect the tax residence of the people linked to the structure and send the information required under CRS. The founder, council members, protector and beneficiaries may be reported. A resident of a country with controlled taxation should therefore assume that the authority knows about the structure, its accounts and its distributions, and meet its own reporting duties.

Rules vary from country to country: specific forms for trusts, declaration of foreign accounts, taxation of distributions and inheritance duties. Have a written note drafted by a tax adviser who knows both your country of residence and foreign structures. This prior analysis costs less than a late regularisation accompanied by penalties. Written cost estimates make comparison fairer. Ask for the same items from each provider.

Before signing, check that the provider is authorised by the FSA, that its name matches the documents received and that the bank opening the account is a supervised institution. Reject any promise of guaranteed tax savings or total confidentiality. The only serious guarantee is a structure that is understandable, declared, documented and maintained every year. Keep the proof of every check you make.