TRUSTS, FOUNDATIONS & CRYPTO EXCHANGERS
It is very common that for a purpose of inheritance and distribution of property after death of their owners, people make Wills.
But there is another legal estate planning vehicle that offers an alternative to a Will. This is called Trust.
However, let's make a very important note right away, the Trust is not legally recognized worldwide. Another word, a Trust registered in one country under local law may not be legally recognized and accepted in another!
The trust is not a separate legal entity. It is a duly registered legal agreement established for purposes to hold, manage and distribute movable and immovable property of various kinds.
A Will (which does not provide for any disposal of the testator's property by third parties during his/her lifetime) involves two parties: the testator and the heir(s).
In a Trust, appears a third legal participant, so-called "Trustee", who is appointed to manage, control and distribute assets in accordance with wishes of the Trust’s "testator" (who is legally called in a Trust as the "Settlor") both during life time and after his / her death.
When forming a trust, a fundamental document to be signed is so-called “Letter of Wishes”. The letter indicates in particular:
- what kind of property and in what practical way/s will transferred to the Trustee by the Settlor;
- who will be the Beneficiary/ies (as the heirs in the Trust are called);
- how exactly the Trust will be managed according to the wishes of the Settlor and interests of the beneficiary/ies.
At the same time, the Settlor him/herself can be a Beneficiary (or one of the Beneficiaries) during his/her lifetime, and also (in some types of trusts), he/she can change the Letter of Wishes’ terms and conditions during his/her lifetime in accordance with various circumstances.
It is also common practice for Trusts when Settlor appoints a so-called "Protector" who can veto any Trustee's decision if the Protector deems the Trustee's actions to be contrary to the Letter of Wishes and detrimental to both the Settlor and the Beneficiaries.
A concept of the Trust is very broad and we can't cover all of its nuances (including various aspects of legal tax planning) within the scope of this short post, however, it is safe to say that, unlike a Will, the Seychelles Trust, as a legal instrument of inheritance, offers great flexibility in many aspects of this delicate matter.
We understand that, when it comes to personal and family business, every situation is unique, which is why we take it upon ourselves to understand your aspirations for the future.
A Foundation is a legal corporate entity separate from its creators and it can own assets or participate in legal proceedings in its name. It is formed like a company and managed by a board of councillors like a company's board of directors but it does not have owners.
Usually, foundations are used for charitable purposes in other jurisdiction, but in the Seychelles foundations are generally used as private and family foundations to transfer assets of an individual as part of an estate to give that individual the security that the assets will be managed or distributed in accordance to their wishes, making it harder for prospects to have access to the assets.
The founder, who establishes the foundation, is the one expected to transfer the initial assets into the foundation and they can be one of the councillors managing the foundation without influencing the credibility of the foundation. The councillors who manage the assets must act in the best interest of the foundation itself. When assets are moved into a foundation, they become the property of the foundation itself. The assets are no longer the property of the founder and neither do the assets become the property of the beneficiaries. The beneficiaries do not have any automatic rights to the assets. The Foundation can sign agreements, enter into contracts and own assets including funds in bank accounts in its name and trade and own shares or other interests in companies.
The key parties in a Seychelles Foundation are founders, councillors, protectors and beneficiaries. The main advantages of a Seychelles Foundation over other foundations are that it is itself the beneficial owner of the foundation assets. That in itself is a powerful advantage, non-existent elsewhere, which makes a Seychelles Foundation a very appealing, holding entity instead of a trust or a nominee shareholder.
The cryptocurrency market is one of the most interesting ecosystems and continues to grow rapidly in the recent years. It creates new opportunities to run a location independent business, tie it up to your own philosophy, run it with minimum personal identification, all while using existing tax legislations worldwide. Therefore more and more entrepreneurs are beginning to use it as a form of business. Some people claim that it is the future of money and entrepreneurship.
Despite the obvious benefits such a form of business has, cryptocurrencies are not without their challenges. One of the main ones is a confusion in many countries regarding how cryptocurrency should be regulated and taxed. Governmental bodies of certain jurisdictions of the world like China, Japan, Korea, US, UK and some countries in EU are starting to impose financial regulation on cryptocurrency transactions, reducing the benefits of the business and making its future uncertain.
While some countries are still debating how to regulate and tax cryptocurrency, several offshore jurisdictions still treat transaction with cryptocurrencies as unrestricted and have no special regulations allowing all transactions with cryptocurrencies being absolutely legal with no tax duties.
In certain jurisdictions depending on a type of your cryptocurrency business there is need to obtain a license.
We can provide you with the following cryptocurrency related services:
• Crypto-compliant company formations and cross-border structuring
• Digital asset and financial services licensing if required
• Blockchain and ICO advisory services
• Crypto transaction account opening introduction services
• Legal opinions and professional statements
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