The advantages of Seychelles as an offshore jurisdiction are often asked about by clients considering establishing an International Business Company, or those moving business, and assets offshore.
The Republic of Seychelles is formed from 115 islands in the centre of the Indian Ocean, about 2,000 km of the eastern coast of Africa.
The population of the Seychelles is approximately 90,024 (2012). 70,000 live on Mahe. The official languages are English and French, with a French Creole being widely used by inhabitants. All official business is conducted in French and English.
Victoria is the capital of Seychelles, and located on the main island of Mahe. Victoria boasts the deepest port in the Indian ocean, and has played a large role in the transformation of Seychelles from an agricultural and tourism based economy to one focused on international trace and finance.
This change is a relatively new one, but has been quite successful. Since 1977 there has been a dedicate effort to alter the structure of the Seychelles economy, shifting away from otourism, fish processing, and agriculture, and focusing instead on becoming a nexus of international trade in the Indian Ocean, and a financial services center with global reach.
After careful study of other tax haven jurisdictions’ legislation, the government of Seychelles introduced a number of well-drafted laws allowing for the creation of International Business Companies, Offshore Banks, Insurance Companies, Mutual Funds, Trusts. This round of legislation also included extensive programmes to promote investment, and created an International Trade Zone. All of the above being essentially totally tax free. Another conscious step was taken to promote Seychelles as an international tax haven in 2003, when the government approved legislation creating additional business forms - Special Licence Companies, Protected Cell Companies and Limited Partnerships.All of the above, couple with a stable political environment, business friendly government, unspoiled geographic location close in time and distance to both Europe and Asia have allowed the Seychelles to become one of the newest, but most sucessful tax haven destinations worldwide. This trend towards the growth of the offshore industry in Seychelles continues apace, and is attracting more businesses all of the time.
GENERAL Type of Entity Seychelles IBC Legal System Blend of Common Law & Civil: Primary Corporate Legislation The International Business Companies Act 2016. Shelf Companies Permitted Yes Company Formation Time Two days - two weeks Minimum Mandatory Government Fees $ 100 (USD): Corporate Taxes None Double taxation treaty availability No
Default Currency USD Alternative currencies permitted All Minimum paid up capital $1 (USD)
Mandatory minimum number of directors One Domicile Anywhere Records of directors publicly available Yes ( From 1st December, 2018). Meeting location requirements Anywhere, including teleconference Frequency of meetings No requirement
Number One Shareholder information on public record No Nationality Restrictions None Meeting location requirements Anywhere, including teleconference
ACCOUNTS AND BOOKKEEPING
Must prepare and maintain Yes Account location requirements Anywhere Audits No Account filing requirements None Public record of company accounts No
Redomiciliation to or from jurisdiction allowed Yes Mandatory filing of annual return No
International Business Companies are the most common offshore entities in Seychelles, and are free from all taxes on income earned outside of Seychelles.
Statutory requirements are minimal, and very flexible:
- IBCS require a minimum of only one director, and only one shareholder.
- It is not required that directors, officers of shareholders, be resident in the Seychelles.
- No restrictions on nationalities of directors, officers or shareholders.
- Seychelles IBCs have no minimum capital requirement
- Shareholders and directors meetings need not be held in the Seychelles and can be held by telephone;
- A copy of the share register must be kept in the Seychelles.
- Owner and shareholder data is not filed with Registrar and is not for public inspection, it is only the Memorandum and Articles and director data that is filed with the Registrar.
IBC must observe certain restrictions:
- IBCS may not conduct any businesso with Seychelles residents.
- IBCS may not conduct any businesso with Seychelles residents.
- Banking or trust business is only permitted if the appropriate license is issued;
- A licence is similarly mandatory to conduct insurance or re-insurance business;
Seychelles Special License Company (CSL)
Special Licence Companies (CSL) are formed under the Companies (Special Licence) Act, 2003 (the Act). The CSL is considered a Seychelles domestic company, which is granted a special licence under the Act. In contrast to the Seychelles IBC, CSLs may carry on permitted business both in and outside of Seychelles.
CSLs have a substantial tax advantage over typical domestic Seychelles companies. CSLs may also take advantage of Seychelles Double Tax Agreements. Of particular note on this point, is that Seychelles has just such a treaty with China.
British Virgin Islands Trusts
The following are the key features of a CSL:
- A CSL may conduct any kind of business allowed by the companies act. This includes, but is not limited to international holding companies, franchise companies, marketing companies, intellectual property holding companies, investment conmpanies, and many others. Foreign shareholders are permitted.
- Nominee shares may be issued, but disclosure of the name and address of beneficial owner to the Registrar of Companies is required. However, this information is not made publicly available.
- Minimum of 2 Directors. The directors are permitted to be located outside of Seychelles.
- A Seychelles-resident Company Secretary is required.
- Directors` or shareholders` meetings can take place anywhere, which includes meetings by means of tele or video conference.
- There is a requirement to file annual company returns and audited accounts.
- Foreign, or Seychelles IBC may be converted (continued) as CSLs. Additionally, any CSL may redomicile to another jurisdiction.
Seychelles Limited Partnership
Limited Partnerships (LP) are created under the Limited Partnership Act, 2003, and are considered domestic Seychelles entities. LPs have great tax advantages over other domestic Seychelles business forms. One advantage of note is that an LP may receive income from outside the Seychelles, redistribute the income to other foreign partners, and not be subject to any Seychelles tax liability for the transaction. For this reason, Seychelles LPs are considered a very appropriate vehichle for conducting international joint ventures.
Key features of the LP are as follows:
- The LP must have at least one general partner who is liable for the debts of the LP.
- The LP must have at least one limited partner who essentially has no liability for partnership debt.
- At least one general partner must be a Seychelles person (either a resident individual or an IBC or domestic company or CSL or an LP).
- A Seychelles registered office is mandatory.
- An LP may not conduct general business in Seychelles, with the exception that an LP may carry on local business to the extent necessary for the LP to conduct business outside of Seychelles.
- An annual compliance certificate must be filed every year.
Seychelles International Trusts
Seychelles passed the International Trusts Act in 1994, which established an international trust regime in Seychelles. The Act was drafted based on a detailed examination of leading trust law in a number of other jurisdictions, including Belize, and BVI. The Seychelles International Business Authority, and the Seychelles Supreme Court are the regulatory bodies for trusts under the Act.
The key features of Seychelles International Trusts are:
- An international trust may be created in writing, by will or by oral declaration.
- Purpose trusts are permitted.
- The minimum number of Trustees is one, and this must be a licensed Trustee in the Seychelles.
- Every International Trust must have a Seychelles resident corporate trustee, which holds a trust service providers licence issued by the Seychelles International Business Authority. Additional Non-resident co-trustee/s and/or protectors are permissible.
- Settlors are permitted to be beneficiaries under Seychelles International Trusts, but may never be the sole beneficiary of a trust.
- The settlor cannot at any time during the duration of a Trust be a resident of Seychelles.
- Seychelles International Trusts are permitted to exist with a maximum term of 100 years from the date of their creation. Upon reaching 100 years, the trust will automatically terminate resulting in a final distribution of the remaining trust assets to any remaining beneficiaries, or pursuant to the terms of trust termination set out in the trust deed. Termination of the trust may occur earlier than 100 years from the creation of the trust, should the terms of the Trust Deed provide so.
- The 100 year maximum duration does not apply to charitable, or purpose trusts, which may have an indefinite duration.
- Trust beneficiaries must be identifiable by name or ascertainable by reference to either:
- a class; or
- a relationship to another person, whether or not living at the time of the creation of the trust or at the time by reference to which, under the terms of the trust, members of a class are to be determined.
- The settlor must reside outside the Seychelles for the duration of the trust; at least one trustee must reside in the jurisdiction, but this trustee may be an IBC, which
- The trust property may not include any Seychelles movable or immovable property.
- The names of settlors and beneficiaries are confidential under the Act, unless a Court orders disclosure under the Anti-money Laundering Act;
- The standard perpetuity period is 100 years; but it does not apply to purpose trusts;
- The accumulation of income is permitted;
- Forced heirship judgements are specifically excluded.
International Business Companies
International Business Companies pay no taxes on any and all income earned outside of Seychelles. They are exempt from domestic business tax, withholding taxes and from stamp duty.
Despite this tax free status IBCs must still pay tax on the non-monetary benefits of employees, unless the IBC is in the International Free Trade Zoneor the employees are crew members of a ship in international waters.
Special Licence Companies (CSL)
- A CSL is subject to a Seychelles business tax rate of 1.5% on its world-wide income. Though Seychelles has a territorial tax system, CSLs are exempted from this by legislation, and instead, any foreign income earned by a CSL is considered by the Seychelles tax authority as Seychelles derived income.
- A CSL is exempt from withholding taxes on dividends, interest and royalties.
- A CSL is exempt from stamp duty on property transfers, share transfers and other business transactions.
- A CSL is exempt from trade tax on all furniture and equipment imported into Seychelles for office use.
- A CSL is exempt from the Social Security Act
- A CSL is exempt from work permit fees for expatriate workers.
International (Offshore) Trusts
Offshore Trusts are completely tax free in Seychelles. They are exempt from the business tax, withholding taxes, and from Stamp Duty.
International Free Zone (SITZ) Companies
Seychelles International Trade Zone Companies are exempt from business tax, withholding taxes, customs duties and from Stamp Duty.
SITZ companies, however, must pay annual license fees and application processing fees as follows:
- Redistribution license: $550 (USD);
- Light Assembly License: $550(USD);
- Manufacturing License: $2,700(USD) plus $1,300(USD) initial processing fee;
- Processing License: $2,700(USD) plus $1,300(USD) initial processing fee;
- Export Services License: $1,500(USD) plus $500(USD) initial processing fee.
The Seychelles legal system has its origins in French civil law, but most modern law is closer to Anglo-Saxon common law practice.
The Following is a non-exhaustive list of Seychelles laws related to international business activities with links to the original text:
Anti Money Laundering Act 2006
Central Bank of Seychelles Act 2004
Companies Law 1972
Companies (Special Licence) Act 2003
Financial Institutions Act 1984
Financial Institution Act 2004
Foreign Exchange Act 2009
Foundations Act 2009
Insurance Act 1994
Insurance (Non-Domestic Insurance Business) Regulations 1996
Insurance Act 2008
International Business Companies Act 1994
International Trade Zone Act 1995
International Trade Zone Regulations 1995
International Trusts Act 1994
Investment Promotion Act 1994
Limited Partnership Act 2003
Merchant Shipping Act 1992
Mutual Funds Act 1997
Mutual Funds and Hedge Funds Act 2008
Securities Act 2007
Seychelles International Business Authorities Act 1994
Double Tax Treaties
Seychelles has Double Tax Agreement in force with the follwoing countries:
Bahrain, Barbados, Botswana, China, Cyprus, Indonesia, Malaysia, Mauritius, Oman, Qatar, South Africa, Thailand, the United Arab Emirates, Vietnam and Zambia.
Double Tax Agreements with the following countries have been signed but are not in force: Belgium, Bermuda, Ethiopia, Kuwait, Lesotho, Luxembourg, Malawi, Monaco, Sri Lanka and Zimbabwe.
Negotiations have been concluded with Egypt, Kenya, Morocco, Mozambique, Namibia, Pakistan, Portugal, Tunisia and Swaziland.
Main reasons to choose Seychelles:
- Seychelles IBCs provide excellent value for money – they feature a very low annual Government license fee of $0 if authorised capital is $100,0 or less (compared to $0 in BVI for $50,0 authorized capital and $0 in Belize for $50,0 authorized capital).
- There are no surprises lurking in the legislation behind this business form - Seychelles IBCs have classic, recognizable features, which are understood the world over, as the entity was created by laws modelled on BVI legislation.
- The Seychelles Business Registry is one of the fastest Registries of International Business Companies in the world. New IBCs are usually incorporated within 24 hours.
- Seychelles IBCs are not subject to any taxation of any kind on any of their income. Additionally Seychelles does not impose any stamp or excise duties of any kind.
- Asset protection and the observation of confidentiality are cornerstones of Seychelles IBC law. Seychelles IBCs are not required to disclose the personal details of beneficial owner`s to the Seychelles Government, and no public register of shareholders or owners is maintained in Seychelles. Only the register of directors is filed with the Registrar and will be made available for public access from 1st December, 2018.
- Seychelles is not on any OECD or FATF blacklists.
- Your personal details will not be a part of any public record in Seychelles, as neither company beneficial owners, the director, or any shareholder information is a part of any public record.
- Seychelles is an independent, democratic, presidential republic. It has an outstanding record of political stability, and its diverse economy has allowed it to enjoy a substantially higher standard of living than most other countries in the region.
- English is the official language of the Seychelles.
- Seychelles is close in time zone to all of Europe, which facilitates the seamless execution of business and banking plans.
- IBC incorporation with prices starting from USD 500*.
- Seychelles Special License Company "CSL" formation with prices starts from USD 4350*.