The Seychelles Private Interest Foundation (“PIF”) is the latest cutting-edge tax planning/wealth protection product to emerge from the thriving tax haven of Seychelles.

Enacted into law in December 2009, the Seychelles Private Interest Foundation draws heavily on the most popular aspects of the Panamanian and Liechtenstein foundation models, but includes its own unique features, which are sure to make it particularly attractive to those clients for whom asset protection and tax minimization are a primary focus.

The main advantages of the Seychelles Private Interest Foundation are the opportunities it offers for tax deferral, estate planning, and financial privacy. (The law also contains some of the most stringent asset protection provisions ever devised for such a structure.).

Neither the names of the person(s) establishing the PIF nor the individuals who will benefit from it need to be communicated to the Registry, and the structure is easy to register – obtained by simply filing the Foundation's Statute (the document of which does NOT need to include the names of the Founder or the Directors).

The Seychelles Foundation Law is cleverly drafted, providing that, until the Foundation's ownership is effectively transferred to the beneficiaries, the beneficiaries have no legal interest in the Foundation's property. The Foundation itself is the legal owner of the assets held by the Foundation!

Because there are limits on the type of trading activities a foundation can undertake, a Seychelles private interest foundation works best when used to hold shares in your offshore company. This dual structure not only makes it nearly impossible for creditors/vultures to attack your assets, but (given the wording of Seychelles law) also creates a scenario where you may be able to legally avoid having to declare and pay onshore taxes on your offshore earnings (unless or until the foundation pays you a distribution).

No Tax: Complete exemption from Seychelles income or corporate tax, no withholding tax (“WHT”) is applied when distributions are made and no stamp duty is applicable.

Fast registration and name approval: Seychelles properties can be incorporated in as little as 4 hours from application.

Affordable: The minimum initial capital required is only $1, which can be paid out after registration (unlike Panama, where you need to invest a minimum of $10,000 to set up a PIF).

Easy to establish: it only requires the registration of a Foundation statute.

Simple to structure:

• Only one Councilor is required (who may be a natural person or an entity)
• The Founder may also be a Director (but may not be the sole Director).

Easy to administer:

• It is not necessary to submit the annual declaration
• Accounts do not need to be verified
• No obligation to submit annual accounts
• There is no need to call an annual meeting

Privacy:

• A candidate can sign the Foundation Charter
• It is not necessary to deposit the Foundation's regulations
• It is not necessary to deposit the names of the Beneficiaries of the Foundation (or the Protector)
• The names of the directors do not have to be indicated in the bylaws

Succession Planning: The right to benefit from the Foundation's assets may be passed from one generation to the next, outside the limits of the will or the Founder's personal estate. Seychelles law specifically excludes the application of foreign laws on forced inheritance.

The Founder may reserve specific powers to himself or others, including:

• the right to appoint or dismiss Directors
• the right to add or exclude Beneficiaries
• the right to add or remove Protectors

A Protector may be appointed: And may veto certain decisions (e.g., changing Directors or Beneficiaries). A Founder, a Beneficiary, or a Director may also be appointed Protector (but not a single Director or Beneficiary).

Flexible Uses: A Foundation in the Seychelles:

• It may have beneficiaries;
• o It can be exclusively for a specific purpose (without beneficiaries);
• o It can be for a specific purpose and have beneficiaries.

The most common uses of Seychelles offshore foundations are:

• Wealth Protection
• Estate/Succession Planning
• Asset protection and management
• Circumvention of the rules on forced inheritance
• Charitable purposes
• Pension funds
• Keep art collections
• Receive and manage capital and securities
• Minimize international income, capital gains and inheritance taxes
• Maintaining corporate control
• Separation of voting and economic benefits
• Employee stock option schemes
• Used by companies for employee benefit plans, pension and stock option plans, insurance plans, and special financing arrangements
• Recognized in both common law and civil law jurisdictions

Seychelles foundations can hold different types of assets:

• Stocks, bonds and other securities of public or private companies
• Intellectual Property • Real Estate/Immovable Property
• Banking Activities • Investment Portfolios
• Life insurance policies
• Most other types of resources

• Any income tax
• Professional tax
• Withholding tax
• Property tax
• Gift Tax
• Profit tax
• Capital gains tax
• Distribution Tax
• Inheritance tax
• Property tax
• Stamp duties

In addition to opening your Offshore Foundation, you will probably be interested in creating a life insurance policy on your tax situation by taking a second tax residence in a country with territorial taxation, such as a Residence in Panama or a Residence in Paraguay.