Accounting Requirements for Companies in Seychelles
Updated on Friday 10th January 2020
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Offshore companies in Seychelles that are registered anonymously and are not subject to the annual financial report as numerous companies are. Being an offshore jurisdiction, the taxation system is advantageous because there are no taxes on dividends, capital gains, royalties, interests, and rents. However, a company in Seychelles must keep its own accounting records in matters of transactions, invoices and many others.
The list below is a summary of the most important provisions regarding accounting included in the Seychelles International Business Companies Act:
-the records: as defined in the Act, the accounting records include the documents that prove the company’s assets and liabilities, the receipts, the sales and purchases records, and others that prove relevant transactions.
-annual account filing: the preparation and filing of the annual accounts are not mandatory for companies in Seychelles and neither is the appointment of an auditor.
-the preserved accounts: the company is required however required to keep the records listed above so as to explain the company’s transactions.
-the storage of the accounts: the accounting records are to be kept according to the International Business Companies Act, most often at the company’s registered office.
Company accounting and reporting requisites in Seychelles
In order to comply with the OECD’s recommendations, the Seychelles government amended the International Business Companies Law in 2011, when new accounting standards were enforced. These standards provide for:
- Seychelles offshore companies to keep accounting records which show the accuracy of their transactions;
- the accounting documents must be clear enough for the tax authorities to be able to verify them;
- the tax authorities must also be able to determine the financial status of an IBC company based on its financial statements;
- the amended law also provides for Seychelles IBC companies to be able to prepare accounts and other financial documents.
We also invite you to watch our video on the accounting requirements for Seychelles companies:
Accounting records in Seychelles
Establishing an IBC (International Business Company) in Seychelles comes with numerous advantages from which we mention the most important ones: complete privacy and tax exemptions. But the transactions made by an IBC in Seychelles must be recorded internally in a proper manner. The good part is that such a company is not obliged to prepare the audited annual records, but please remember that accounting records are necessary and also sufficient in such company. For example, an offshore IBC must keep accounting books in order to register the company’s assets, receipts, invoices, contracts, acquisitions, sales or other financial transactions. Such accounting records are kept in the company’s main office, or in other places if the director of the company considers so. We remind that theaccounting records of an offshore in Seychelles is not subject to public disclosure, and furthermore, these documents must be kept for seven years.
Company directors can request that the company provides to them the relevant accounting records for inspection. When a director makes such a request, the company must provide the original or the copies within two weeks from the request. Companies need to comply with the director’s requirement when he requests to see the accounting records. Failure to do so can result in fines and when the company refuses to disclose this information, a formal legal request can be made for a court to compel this disclosure. In practice, however, these cases are rare and would have to be precedent by a dispute or a conflict of interest between the company director and the shareholders/registered agent/other company representatives.
When choosing Seychelles for protecting the assets, we suggest you address to our company incorporation agents in Seychelles for registration matters among many other related services. We also guide through the VAT registration procedure in Seychelles.
Penalties for not keeping the records in Seychelles
Business persons worldwide choose Seychelles for creating offshores and protecting their money and assets. As it is known, there are no taxes levied on registering the company or on profits, which is why Seychelles became a preferred offshore jurisdiction. The main requirement in this matter as stipulated by the law inSeychellesis related to the accounting records which must be prepared and controlled inside the company without having to display it publicly for 7 years.
One should know that if such accounting records are not considered, the owner of the offshore can be penalized for each day of non-compliance in this matter. In most cases, the initial penalty is 100$ and the daily penalty is 25$ for each day during which the contravention continues. Those companies that do not comply with the conditions for keeping and storing the accounting documents are the ones liable for the highest fine, of up to 2,500 $. The value of these fees is informative and for any updates, we recommend that you get in touch with one of our agents who specialize in company registration in Seychelles as well as the accounting requirements.
Other accounting requirements in Seychelles
Bookkeeping, payroll administration, preparation and maintenance of accounting records, preparation of statutory financial statements and audits, besides full tax compliance services can be solicited for your company in Seychelles. Our advisors can offer such accounting services in conformity with the legislation in the insular state.
- the income tax which is levied on companies with activities in Seychelles at a rate of 25%;
- the lack of capital gains, dividend, inheritance or property taxes in Seychelles;
- withholding taxes are levied only on non-residents at rates varying between 15% and 33%;
- Seychelles IBC companies are exempt from taxes for a period of 20 years.
Maintaining updated and accurate financial records is in the best interest of the company and its beneficial owners and this is a requirement in many offshore jurisdictions, not only Seychelles. The fact that these centers do not require annual filing like other jurisdictions is enough for investors to already benefit from a more relaxed accounting and reporting regime. The simplicity of the accounting records that need to be prepared makes it very easy for those who open a Seychelles offshore company to prepare and maintain the accounting records themselves. This can be achieved by maintaining a good record of the company’s financial transactions using one of the many available accounting software that is available today.
While maintaining and preparing the accounting records is simple in Seychelles, we do recommend that investors explore the services offered by our team in connection with various accountants and tax experts. This is recommended for offshore companies as oftentimes foreign investors who open these companies are not present at all times in Seychelles and nevertheless the company needs to maintain an updated version of the financial transactions. The registered agent services are also important for this purpose, as they relate to the management of the company and the agent being the link between the Seychelles authorities and the company director. This agent needs to be licensed to provide the services, another manner in which the company owner can make sure that the affairs of the company are kept in order.
Investors who open an IBC offshore company in Seychelles enjoy lighter accounting and reporting requirements particularly because the IBC is designed to engage in business activities that are not conducted in the country. companies may be required to present their financial records to Seychelles authorities not as part of an annual submission but as part of an ongoing investigation and these cases are rare.
If you want to know more details about the accounting requirements and the taxation of companies in Seychelles, we invite you to get in touch with our team of company incorporation agents in Seychelles.
Call us now at +248 4321018 to set up an appointment with our business consultants in Victoria, Seychelles. Alternatively you can incorporate your company without traveling to Seychelles.
As a Valsen Fiduciaries client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Seychelles.