Introduction to the Seychelles
A byword for tropical beauty, the Seychelles is an archipelago located in the Indian Ocean to the north east of Madagascar. However, as well as being a popular tourist destination, the Seychelles has established itself on the map as a modern and competitive offshore financial center.
Advantages of the Seychelles
In a mostly open, globalized economy, there are many low-tax jurisdictions for investors to choose from when considering where to locate an international company, depending on their specific needs. The Seychelles’ offering includes politically stability, a predictable legal framework with corporate legislation based on English law, a flexible international business company format with minimal requirements, and no taxation provided certain conditions are met.
There are two main company law statutes in the Seychelles: the Companies Act 1972, which is largely used by local companies trading within the Seychelles; and the International Business Companies Act 2016, under which most international companies are formed. Here, we contrate on the latter of the two statutes.
International Business Companies
The most widely-used vehicle for offshore operations in the Seychelles, the IBC normally takes the form of a private company limited by shares, but can also be a limited life company. Statutory requirements are minimal and flexible:
- Only one director and one shareholder is required
- Shareholders, directors and officers need not be resident in the Seychelles and there is no stipulation as to their nationality
- Shareholders and directors meetings need not be held in the Seychelles and can be held by telephone or other means of electronic communication
- There is no minimum capital requirement, although shares must be registered. A Seychelles IBC may not issue bearer shares.
- While accounting records must be kept, there is no need for these to be audited.
- A copy of the share register must be kept in the Seychelles. This rule also applies to a register of directors and officers.
- The Memorandum and Articles of Association are the only documents to be held on the public record; beneficial ownership information is known only by the registered agent.
IBC status is granted subject to certain conditions:
- No business may be transacted with residents of the Seychelles
- No ownership interest in real property in the Seychelles is permitted; property may be leased for office use only
- Banking or trust business may be carried on only if an appropriate license is issued
- Likewise, a license is required to carry on insurance or re-insurance business
- Engaging in the business of company management or providing registered facilities for Seychelles-incorporated companies is not permitted.
IBCs are permitted various activities within the Seychelles without compromising their offshore status under the Act; these include:
- professional contacts with lawyers, accountants etc.
- preparation and maintenance of books and records
- the holding of directors’ or shareholders’ meetings
- ownership of shares in other Seychelles companies, whether under the Act or the Companies Act 1972
- ownership of Government or Central Bank securities
- ownership of a vessel registered in Seychelles.
There is a flat incorporation and annual renewal fee of USD100, irrespective of the level of share capital, which may be unlimited.
Incorporation typically takes around 24 hours.
Other company forms
Besides local companies and IBCs, legislation in the Seychelles enables the formation of special license companies, limited partnerships, protected cell companies, trusts and foundations.
The Seychelles has a territorial income tax regime, and provided that an IBC does not trade within the jurisdiction, they are generally exempt from the Business Tax (25 percent on the first SCR1m (USD69,580) and 33 percent on the excess) and from withholding taxes. However, IBCs cannot utilize the Seychelles’ network of double tax avoidance treaties.