Introduction
A Trust is a legal arrangement in which a Trustee holds assets on behalf of beneficiaries, who benefit from the assets but do not own them. Trusts are commonly used for estate planning, asset protection, and philanthropy.
- A Trust is set up by a person called a Settlor
- A Trust is managed day to day by a Trustee
- A Trust typically has Beneficiaries ie persons who are designed to benefit ultimately/financially from the set-up of the Trust
- A/The Trustee manages the Trust assets in accordance with a Trust Deed ie a governance document drafted or supplied by the Settlor or his/her Lawyers
In Seychelles, individuals and corporations can establish Trusts under the Seychelles Trusts Act 2021. However, there is also the option of setting up a Private Trust Company (PTC) instead of a traditional Trust. In this article, we will explain the key features of a Private Trust Company and how it differs from a normal Trust established under the Seychelles Trusts Act 2021.
What is a Private Trust Company?
A Private Trust Company (PTC) is a company specifically set up to act as a Trustee for one or more trusts. PTCs are often used by wealthy families or businesses to maintain control and confidentiality over their assets. The PTC can be owned and controlled by the family or business, allowing them to have greater input and control over the management of their assets.
Key Features of a Private Trust Company
- Control: One of the key features of a PTC is that it allows the Settlor to retain a significant degree of control over the Trust assets. This is because the PTC is owned and controlled by the Settlor, who can appoint the Directors and determine the investment strategy of the company.
- Customization: Another advantage of a PTC is that it can be customized to suit the needs of the Settlor and his/her Beneficiaries. The PTC can be set up to manage multiple Trusts, each with their own investment strategy and beneficiaries.
- Confidentiality: A PTC also offers greater confidentiality compared to a traditional Trust. This is because the Settlor can choose to keep the ownership and control of the PTC private, which can help to protect both the Settlor’s and the Beneficiaries’ privacy and anonymity.
- Limited Liability: A PTC is a separate legal entity and therefore provides limited liability protection to the Settlor and his/her beneficiaries. This means that the assets held within the Trust are protected from any claims or liabilities against the PTC.
Normal Trusts Established under the Seychelles Trusts Act 2021
In contrast to a PTC, a normal Trust established under the Seychelles Trusts Act 2021 is a traditional Trust arrangement. The Settlor establishes the Trust, appoints a Trustee to manage the Trust assets, and identifies the Beneficiaries who will benefit from the Trust assets/investments.
Key Features of a Normal Trust Established under the Seychelles Trusts Act 2021
- Asset Protection: A normal Trust established under the Seychelles Trusts Act 2021 provides asset protection for the Beneficiaries. This means that the assets held within the Trust are protected from any claims or liabilities against the Beneficiaries.
- Tax Efficiency: A Trust established under the Seychelles Trusts Act 2021 can also offer tax efficiency. This is because the Trust assets are held separately from the Settlor’s personal assets, which can help to reduce the Settlor’s tax liability.
- Confidentiality: A normal Trust established under the Seychelles Trusts Act 2021 also offers confidentiality to the Settlor and the Beneficiaries. The Trust Deed is not a public document, and the identity of the Settlor and Beneficiaries can be kept confidential.
Conclusion
In summary, a Private Trust Company (PTC) is a company specifically set up to act as a Trustee for one or more Trusts. PTCs offer greater control, customization, confidentiality, and limited liability protection to the Settlor and Beneficiaries. In contrast, a normal Trust established under the Seychelles Trusts Act 2021 provides asset protection, tax efficiency, and confidentiality to the Settlor and Beneficiaries. Ultimately, the choice between a PTC and normal Trust comes down to the circumstances and preferences of the Settlor.
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
