Seychelles Incorporation Benefits

Favorably and strategically located in the Indian Ocean, enjoying political stability and having the appropriate legal and administrative frameworks, Seychelles is today becoming one of the most attractive offshore jurisdictions. It is highly recommended for those looking for an efficient and secure offshore company structure.

Let us define the most attractive features of this jurisdiction and discuss how anyone can benefit from incorporating an offshore company in the Seychelles.

Seychelles entered the offshore financial services industry in December 1994, following the enactment of the International Business Companies Act 1994 and other legislation. Despite its small size and some other limitations, the Seychelles offshore sector had managed to succeed in recent decades. More than 30,000 Seychelles International Business Companies (IBCs) have been registered, and more than 600 new offshore companies are registered every month.

As a relative newcomer to the offshore industry, Seychelles has a greater number of available company names than other jurisdictions. Seychelles IBC benefits from zero local taxes, very few restrictions or reporting requirements, and superior confidentiality. It remains competitive even in the face of increased OECD enforcement and pressure from other well-respected offshore centres. The Seychelles government is increasingly encouraging foreign investment through the development of the International Business industry. This strategy encompasses IBC registration, offshore trading zones, ship and aircraft registration, as well as banking and insurance.

Below is a synopsis of the key positives that make a Seychelles IBC one of the most secure and tax efficient structures in the world.

1. Seychelles IBC is not subject to tax within Seychelles. You only pay the Government License fee. The law states that all exemptions for a Seychelles IBC will remain in force for a period of 20 years from the date of incorporation;

2. The incorporation fees are fixed for life. Even if the annual renewal fees increase in the future, a company incorporated before such increase took effect will not be negatively affected. However, if the rates were reduced, the same company would be entitled to pay the reduced amount;

3. There is no obligation to file and present any type of accounts or annual declarations. However, if they are retained, an audit is not required. This certainly makes it easy to set up and operate an IBC;

4. There is no minimum share capital requirement and the capital may be denominated in any currency. Shares can be issued with or without value;

5. Seychelles IBCs can be established with bearer shares that do not have the name of the beneficial owner registered. It is possible to make use of proprietary directors. That means that such business structure is private and confidential;

6. Corporate directors are allowed when creating the company;

7. Only one shareholder and one director are required, and both may be the same person. Your details do not appear in any public record;

8. Shareholders, directors and officers need not be residents of Seychelles and there is no stipulation as to their nationality;

9. Meetings of shareholders and directors do not need to be held in the Seychelles, a representative can attend, telephone meetings are possible. There is no requirement for an ordinary Annual General Meeting;

10. The Deed of Incorporation and the Articles of Association are the only documents that will be kept in the public registry. These documents do not contain any indication of the actual shareholders or beneficial owners;

11. No foreign exchange or other financial controls are imposed;

12. Seychelles IBCs are low cost with an annual license fee of only $100 for authorized share capital of up to $100,000 ($1,000 for authorized capital greater than $100,000);

13. Fast onboarding procedures and simple ongoing administration. The new IBC is usually incorporated within 24 hours;

14. The rate anniversary is 12 months from incorporation, not December 31;

15. IBCs may engage in any legal business in any country and may transact in any currency they choose;

16. Although a locally established IBC cannot trade within the Seychelles, it can do business with any other Seychelles IBC, it can be used to own or manage a yacht or private aircraft that is registered in the Seychelles, for example;

17. In fact, local legislation allows the migration of companies that are already registered in other jurisdictions, which can be particularly useful;

18. Seychelles is not subject to the EU Savings Tax Directive, unlike other offshore tax havens;

19. Seychelles has avoided entering into information exchange agreements with foreign countries or organizations for the exchange of financial assistance;

20. Not highlighted by the OECD;

21. Not yet widely perceived as a tax haven;

22. There is a continuous expansion of the Double Taxation Treaty network. Being a newcomer to the tax treaty network, it is entering into treaties, which are the most relevant to the needs of the new century;

23. Signatory of the Hague Convention (1961) for the Apostille.

To qualify as an IBC, the following restrictions are imposed:

1. IBCs must operate outside of Seychelles, no business may be conducted in the jurisdiction. However, these companies may invest in shares of local companies or purchase Seychelles government bonds;

2. You cannot own real estate in Seychelles. The property can be leased for office use only;

3. May not be used for banking, insurance, or registered agent activities.

In that way, IBCs are the most popular unless the operations take place in the Seychelles International Trade Zone. Meanwhile, companies trading in the Seychelles, as well as banks, insurance companies, and mutual funds, show a preference for various types of companies formed under the Companies Act of 1972. In 2003, the government legislated new types additional companies: Companies with a special license (CSL), Protected Cell Companies (PCC) and Limited Partnerships.

The CSL is a low tax company, subject to 1.5% tax on its income worldwide, with access to the growing number of Seychelles Double Taxation Agreements. It is the vehicle of choice for offshore operations that require treaty benefits. CSL and Limited Partnership may establish an office in Seychelles for the purpose of doing business outside of Seychelles. The PCC is the vehicle for offshore insurance, mutual funds and other approved collective investment plans. PPC companies are exempt from tax if their insurance or mutual fund activities are licensed by a Seychelles authority. Just in case, an IBC can be converted at any time to a CSL.

In general, during the last few years, Seychelles has made steady progress. It enjoys a very complete offshore tax haven legislation in the world. With two main types of offshore companies available in the jurisdiction, the classic tax-free IBC and the low-tax CSL, Seychelles retains a significant share of the global offshore business market and looks to the future with confidence.