Company registration in Seychelles

Seychelles is a relatively small island jurisdiction in the Indian Ocean. Its territory includes 115 rocky islands, 33 of which are inhabited.

Seychelles became a separate jurisdiction in 1976, but did not sever economic ties with the former metropolis and even became part of the Commonwealth of Nations. Despite its very modest size and limited resources, Seychelles has become a modern and economically prosperous country where free market principles are complemented by social support measures.

Seychelles is well known worldwide as an expensive tropical resort. Entrepreneurs appreciate these islands for their lenient tax laws and favourable conditions for offshore business. Currently, there are about 100,000 offshore firms registered in this jurisdiction.

7 reasons in favour of registering your company in Seychelles

1. Soft tax regime

   Offshore companies registered in Seychelles do not pay tax on profits earned, as well as stamp duty and other taxes. The only expenses of offshore structures in this jurisdiction are the annual state fee for renewal of status and minor organisational expenses.

2. Complete confidentiality

   There are no publicly accessible registers in this jurisdiction. Information on business owners is kept with the registration agent at the company’s registered office.

   If you feel that this level of privacy will not be enough, use nominal service, which is not prohibited in Seychelles.

3. Minimal corporate reporting

   Offshore companies established in Seychelles do not file a tax return and annual financial statement if all their activities take place outside the country.

   Of course, this does not mean that your offshore firm is completely exempt from having to keep financial records of its activities. Seychelles corporate law does not exclude the possibility of business audits, so you should retain all important documentation of your offshore organisation, be it accounting papers or bank statements.

4. No strict requirements for structure and founders

   Opening an offshore IBC company in Seychelles is relatively easy because:

   • For this purpose, 1 founder and 1 director are sufficient. The law does not prohibit combining these functions in one person;

   • The director and founder can be a person or company from any country in the world;

   • There is no minimum amount of share capital for an offshore company. Before registering a business, you will not be required to transfer the stated amount of authorised capital to a special bank account;

   • Although most Seychelles offshore structures issue only registered shares, under certain conditions they have the option to issue bearer shares.

5. Ease of business registration

   You will not be able to open an offshore company on your own, without the assistance of a licensed registration agent resident in Seychelles. On the one hand, this rule entails small additional costs. On the other hand, the involvement of a professional lawyer greatly simplifies the procedure of registering an offshore company. With the help of a registration agent you will save a lot of time and money, as you will not need to fly to Seychelles personally to open a business.

6. Convenience of calculations

   As there are no currency controls in Seychelles, your company will be able to accept payment for goods or services in any world currency, which is especially convenient for organising international online trade.

7. Corporate law

   The laws of Seychelles, which regulate the business activities of companies registered in the country, are based on the principles of island law and legal practice of Great Britain and France. Therefore, the interests of Seychellois businessmen are reliably protected at the legislative level, and all economic disputes are resolved in an independent court.

What type of company is suitable for launching an offshore business in Seychelles?

As in other modern countries, to register a business in Seychelles a foreign entrepreneur has a choice of several convenient legal forms. Most often enterprising foreigners opt for 2 types of corporate structures:

1. CSL — Seychellois company with a special licence;

2. IBC — international business company.

Special Licence Company / CSL — a company with a special licence

This is the name given to a corporate entity in tax resident status that has a special licence from SIBA, the Seychelles International Business Authority, which imposes a preferential corporate tax rate of 1.5% on all corporate income.

Generally, foreign businessmen are attracted to Seychelles CSL for 3 reasons:

• Due to a significantly reduced tax burden on business, thanks to a reduced corporate tax rate and numerous double taxation avoidance agreements with other jurisdictions;

• Because of the higher status of a company with a special licence compared to a normal international business company;

• Due to the fact that under the Seychelles “Special Licences Act” of 2003, certain areas of business can only be conducted through a Special Licence Company unless otherwise subject to a special permit from SIBA.

The liability of the shareholders of such a company is limited to their share in the authorised capital. For companies with a special licence there is no minimum amount of share capital, but unlike IBCs, the founders must pay at least 10% of the stated amount by depositing funds in an account in a Seychelles bank.

To register a company with a special licence in Seychelles, at least 2 shareholders are required. A CSL requires a resolution of the founders to appoint at least 2 directors and a local corporate secretary.

International Business Company / IBC — international business company

This is now the most common type of corporate structure for registering an offshore business in Seychelles.

Seychelles IBCs do not pay taxes on profits earned abroad. They are also exempt from the need to submit annual financial and tax returns.

International business companies registered in this country are subject to 4 restrictions:

1. IBC is prohibited from conducting commercial activities in Seychelles;

2. Such a firm may not buy or rent property in Seychelles. The exception to this rule is the lease of office space;

3. With an IBC, you cannot engage in banking and insurance activities or take third-party assets into trust;

4. IBCs cannot provide a registered office to other organisations.

To establish an international business company, at least 1 shareholder is required, which can be other corporate entities or individuals, including those of foreign origin. At least one director must be appointed to manage the IBC. The international business company must have an effective registered address in Seychelles, but you do not need to have a separate office in the islands or employ a corporate secretary.

The minimum authorised capital for an IBC is $1. Whatever amount you declare, it does not need to be paid in advance. Such business structures issue only registered shares. Shareholder liability is distributed in the same way as in an ordinary limited liability company.

Other forms of offshore business for foreign nationals in Seychelles

Anonymous company

Another sought-after structure for offshore company registration in Seychelles. Its key advantage is a high degree of confidentiality and protection of assets of foreign entrepreneurs. When setting up an anonymous company in Seychelles, a significant part of foreign businessmen hire nominee directors to achieve even greater security.

Holding company

Some foreign investors prefer to set up their own holding companies to indirectly control the majority of shares in a particular business. In this respect, a Seychelles holding company is a trust-like legal entity that can control another business within the country.

Trusts and investment funds

A Seychelles trust acts as an agent, managing a business or assets on behalf of a foreign person or entity. An investment trust is usually registered by foreign companies to indirectly make long-term or short-term investments, depending on the strategy chosen.

Limited liability partnerships

An unincorporated form of business registration in Seychelles that allows optimising fiscal costs through pass-through taxation. Within such organisations, a distinction is made between general partners, who are liable for the debts of the firm with all their assets, and limited partners, whose risks do not go beyond the contribution to the founding capital.

What kind of business is it profitable to run with a company registered in Seychelles?

It is possible to distinguish 5 key areas of commercial activity, which are convenient and profitable to carry out through a Seychelles offshore firm:

• Shipping and air transport (the islands offer favourable conditions for registering ownership of aircraft and ships);

• Investments through funds;

• Trade, international and through online venues;

• Holding structures;

• Intellectual property management, licensing.

Through Seychelles-registered CSLs, activities such as:

• Investment management and counselling;

• Offshore banking (separate banking licence required);

• Offshore insurance (separate insurance licence required);

• Marketing;

• Intellectual Property Management;

• Franchising;

• Human Resource Management;

• The operation of a holding company or headquarters of a foreign company.

If your company will be operating in Seychelles, almost any type of business activity will be licensed by the government and in some cases will require a separate permit from the regulatory organisation. Only farmers, small artisans and fishermen can operate in Seychelles without a licence.

Procedure for opening a company in Seychelles

In order for the registration and further operation of an offshore company to proceed without any problems, it is extremely important for aspiring foreign entrepreneurs to find a reliable registration agent in Seychelles.

After all, Seychellois registration agents have a lot of responsibility and many duties on their shoulders:

• It is only possible to register a company in the islands with the assistance of a registration agent;

• The involvement of a competent lawyer almost completely eliminates the possibility of errors in the registration process;

• The registered office for your offshore company is usually provided by the registration agent for a small additional fee;

• Since most of the founders of offshore structures are not located at the place of incorporation, your registration agent assumes the functions of a corporate secretary — receiving and transmitting incoming correspondence;

• Registers of beneficiaries and directors, accounting records and other corporate documents are kept at the office of the registration agent. In other words, the confidentiality of your business is ensured by the agent.

All Seychelles registration agents are state licensed, experienced and knowledgeable. However, it will not be easy for you to find a good agent in Seychelles on your own, one who will always be in touch during working hours and will stand up for your interests. Our specialists have helped foreign businessmen to register their business in Seychelles many times, so they have already established contacts on the islands and can recommend you an honest local agent.

Briefly, the procedure of opening a company in Seychelles can be summarised in 4 stages, the first of which we have already discussed in detail:

1. Finding a reliable registration agent;

2. Selection, verification and approval by the Registrar of a suitable name for the future company;

3. Preparation of documents for business registration – articles of association and memorandum of association of the company, as well as preparation of registers of directors and shareholders;

4. Approval of constituent documents, payment of the registration fee, official registration of the company.

You will be able to fit the procedure of opening a Seychelles offshore company into 5-7 working days if:

• You will have complete certainty with the organisational structure of the future company, the stated amount of share capital and the registration agent in the islands;

• You will be advised throughout the incorporation process by a knowledgeable corporate attorney.

The amount of the state registration fee depends directly on the amount of the authorised capital of your company. As mentioned above, once your IBC registration is complete, you do not stop working with the Island registration agent, as the registers and accounting records (updated every six months) will be kept at his office and official letters and notices for your company will be sent there.

Registration of an offshore company in Seychelles is valid for one year and must be renewed. Don’t forget that renewal of an offshore company in this country implies not only an annual payment to the state, but also renewal of the lease of the legal address and payment for the services of your registration agent.

What taxes do companies pay in Seychelles?

The islands have a progressive corporate tax scale for resident companies, so organisations pay between 15% and 25% of their profits. The exact amount of the rate depends on the income received by the company in the reporting period:

• 15% tax is imposed on the first 1 million Seychelles rupees* of profits earned in Seychelles;

• 25 per cent corporate tax is levied on that part of income exceeding Rs 1 million.

At the January 2024 exchange rate, 1 million Seychelles rupees is equal to 76,000 US dollars.

Example calculation. The profit of a Seychellois company during the accounting period was Rs. 2.6 million. The amount of corporate tax for the accounting period will be:

Rs 1 million x 15 per cent + Rs 1.6 million x 25 per cent = Rs 150,000 + Rs 400,000 = Rs 550,000.

Certain licensed business activities of companies registered in Seychelles are subject to corporate tax at a concessional rate of only 1.5%.

Also taxed:

• Interest on bank deposits is 5%;

• Dividends and royalties – 15%;

• The income received from the bonds is 33%.

Seychelles Value Added Tax (VAT) is only 15 per cent. Medicines and certain food products are exempt from VAT. An entrepreneur operating in Seychelles must register for VAT as soon as his company starts bringing in more than 2,000,000 Seychelles rupees, which at the current exchange rate of the year is about US$52,000.

If you have employees in your Seychelles company, 15% of the accrued salary will be personal income tax and 2% of the salary is paid by the employer as a contribution to the pension fund. In this jurisdiction, business owners have the option of opting out of their payroll, and as a consequence, the payment of personal income tax and pension levy, if they are the only employee in their firm.

Seychelles has double taxation treaties with other countries and the jurisdiction’s participation in the international tax information exchange programme has made tax optimisation even easier for those Seychellois companies operating abroad.

Offshore business registration in Seychelles with Imperial & Legal

Starting a new Seychelles company is relatively easy, especially if you are at least generally familiar with the local corporate law. But if you want to get the most favourable conditions in this offshore, it is better to seek the assistance of our corporate lawyers already at the stage of document preparation.

Our specialists will find you a reliable registration agent and register your offshore company quickly and cost-effectively. For entrepreneurs planning to operate in Seychelles, we will help them obtain a state licence and sign a service agreement with one of the local banks.