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Owning Private Trust Companies
The Seychelles Foundations can own private trust companies often in the case of families whose members and business interests are located in both civil and common law jurisdictions.
Although the foundation is a rival concept to the trust, and has many advantages compared with the trust (e.g. incorporated status) it is a fact that the trust concept will continue to be widely used in international tax and wealth planning for two reasons:
1. Many countries do not recognise the concept of trusts. It is often assumed that this is a disadvantage, but in fact it is an advantage as countries that do not recognise the trust concept cannot enact specific anti-avoidance legislation against trusts, and
2. Even where countries recognise and enact anti-avoidance legislation against trusts, at least one can advise with certainty in relation to such legislation and its impact on settlors and beneficiaries.
Trusts have been widely used as family succession planning vehicles, and will continue to be so used.
However, a well-known problem for would be settlors of trusts is that they must transfer ownership and control of valuable assets to third party professional trustees who they may not know well.
There are various solutions to mitigate this problem. One such solution is the concept of the family private trust company (PTC). A PTC is a company which is the sole corporate trustee of the family trust. The board of directors of the PTC will include family members, together with offshore professionals. In some PTC arrangements the Patriarch, or Head of the Family, will own all the shares of the PTC.