Foreign investors who come to the Seychelles islands are attracted by the types of companies they can set up here and by the taxation system which is very advantageous for some of them. The best combination between the type of business form and the tax it must pay is the offshore company in Seychelles.
Also, known as the International Business Company, or IBC, the offshore company offers several benefits, among which we mention the shareholder protection to foreign enterprisers. However, Seychelles IBCs come with certain restrictions. Ourcompany formation consultants in Seychelles can help foreign entrepreneurs who want to open offshore companies here.
Why IBC offshores in Seychelles are preferred by investors from abroad?
From the beginning, we mention that IBC companies are the most popular types of companies in Seychelles and they are addressed to all international players, whether companies or business persons. An IBC in Seychelles is subject to varied advantages among which we make reference to the following:
• the financial records of such company are not displayed publicly;
• there is no need for a minimum share capital when registering an IBC;
• the assets are completely protected;
• there are no corporate taxes imposed;
• the business can be controlled outside borders of Seychelles;
• the booking can be carried out in the home country of the owner;
• the information about the owners are private;
• there are no tax liabilities.
In completion to the above-mentioned benefits, linked to an IBC offshore in Seychelles, the owners of such company do not have to worry about audits or tax returns. Moreover, for high confidentiality, one can register the IBC offshore in Seychelles without having to offer details about the owners and the nominee directors. For complete information about the benefits of having an offshore in Seychelles and about the incorporation procedure, it is suggested to address to our team of specialists in company formation in Seychelles.
Why you should choose Seychelles for business
Seychelles is part of the Commonwealth, with an independent government which always put the accent on how foreign investments can be attracted. Having a diversified economy with a complete focus on the agriculture, tourism and manufacturing sectors, Seychelles rapidly gained respect and reliability among important players worldwide, which is also based on the importance of being a transit location between Africa and Asia.
In addition, Seychelles is known as a tax haven and a sustainer of transparency related to the significant business field which continues to flourish. IBC companies can obtain VAT registtration numbers with the help fo our local agents.
Tax legislation applicable to IBCs in Seychelles
The legislation related to starting an IBC in Seychelles was amended in 2016, however when it comes to the taxation of such entity, it remains under the Business Tax Act which provides for tax exemptions. This is because the IBC is prohibited from engaging in any commercial activity in Seychelles.
Foreign investors who want to open offshore companies in Seychelles can register them here, however the activities of the company must be carried outside the country and this is how the taxation or better said the tax exemption applied to an IBC is explained. The exemption applies for a period of 20 years in the case of a Seychelles offshore company. Our Seychelles company registration advisors can help you register an IBC here.
Are there any taxes paid by a Seychelles IBC?
It should be noted that a Seychelles IBC companyis not subject to any taxes as long as the condition of not having business activities in the country is satisfied. However, foreign investors who want to set up an offshore company in Seychelles must consider the business start-up costs such as the licensing fees, the capital which must be deposited for incorporating the company, the fee of the registered agent.
Also, most foreign investors who set up IBCs in Seychelles require nominee and accounting services which enter the category of maintenance costs. Foreign enterprisers must know that the IBC cannot benefit from the double taxation agreements signed by Seychelles.
Legal requirements for appointing company managers in Seychelles
According to the International Business Company Act, an offshore company in Seychelles must have at least one director who can be a resident or non-resident of this country. Also, the director can be a natural person or a corporation, and thus permitting the appointment of nominee directors. However, it is also possible for the owner of the company to be its director.
The director will be appointed by the shareholder(s) of the company prior to the registration of the offshore in order for his or her personal information to be filed with the Companies Register in Seychelles. The main role of the company director of a Seychelles offshore is to ensure the day-to-day activities of the business.
Natural persons as company directors in a Seychelles IBC companies
As mentioned earlier, the company management of an IBC company in Seychelles can be ensured by a natural person who can be the beneficial owner of the company, a person elected by the owner, or a specialized agent who provides nominee services.
It should be noted that if the beneficial owner decides to take on the role of a company director for the Seychelles offshore, a few aspects must be considered:
•the costs associated with the administration of the offshore company can decrease;
•the beneficial owner can become liable for paying the income tax in his home country;
•if the beneficial owner obtains a Seychelles residence permit, he will be liable for taxation here;
•it is important to know that the owner does not need to apply for a residence permit in Seychelles.
There is also the possibility of appointing one or more individuals to become managers in the offshore company in Seychelles. When appointing more individuals, these will form the Board of Directors of the company.
Another option is to appoint a specialized agent who provides nominee services in Seychelles. This service will be based on a contract and will usually have a limited duration. Our Seychelles company formation specialists can offer more information about the options related to the management of an offshore company.
Corporate shareholders for a Seychelles offshore company
The other option for company management in a Seychelles IBC company is to appoint corporate directors. This function can be completed by a Seychelles-based company which will have the same duties and responsibilities as a natural person.
Most of the times, corporate directors are appointed by foreign investors opening offshore companies in Seychelles without being required to come here. The corporate manager can also be appointed as a nominee director based on a services contract.
Nominee directors in Seychelles
As mentioned above, both natural persons and companies can be appointed as nominee directors for IBC companies in Seychelles. These are usually services meant to help foreign investors who want to set up offshore companies in Seychelles to benefit from fast business registration procedure. Both nominee shareholders and directors can be appointed in Seychelles and these services offer various benefits. Among these are:
•nominee directors are very popular in Seychelles and are also recognized by the law;
•the nominee director services are offered based on a fixed-term contract which can be renewed;
•the nominee director can provide important privacy benefits to the offshore owner;
•the costs of such services are usually low and can ease the administration of the company;
•the nominee director will perform the same activities as any other company manager;
•the nominee director will report directly to the beneficial owner of the Seychelles offshore.
Offshore company registration requirements in Seychelles
The registration of an offshore company in Seychelles implies respecting a few requirements, among which:
•ensuring the minimum shareholding structure requirement and having a local address in Seychelles;
•ensuring the company has at least one director, who can be a resident or non-resident natural person or corporation;
•ensuring the minimum share capital requirement which must comply with the activities of the company;
•ensuring the offshore company has a minimum authorized share capital, which can be denominated in any currency.
As seen above, a Seychelles offshore company must have a minimum paid-up capital, an authorized capital and a subscribed capital. Our local consultants can offer more information on the share capital requirements related to setting up an IBC company in Seychelles.
Types of share capital for offshore companies in Seychelles
According to the International Business Companies Law, there are 3 types of share capital available for offshore companies in Seychelles. These are: the authorized share capital, the paid-up share capital and the subscribed share capital. It is important to know, however, that the law does not impose a minimum amount of money to be deposited in a bank account as a share capital when opening an IBC company in Seychelles.
The authorized share capital of a Seychelles offshore company
Under the law, the authorized share capital of an offshore company in Seychelles is represented by the amount of money prescribed by the business’ Memorandum and Articles of Association. The authorized share capital is decided by the shareholders and usually represents the amount of money used for the operations of the company until it starts to make profits. It should be noted that there are no specific requirements for an authorized share capital when setting up an offshore company in Seychelles.
The subscribed share capital of an offshore in Seychelles
The subscribed share capital is another type of capital an offshore company can have. The main difference between the subscribed and the authorized share capital of a Seychelles offshore is that the former is deposited by the shareholders in return for the shares they will be issued. This means that the greater number of shares issued for a shareholder, the larger the share of the company will be owned by the respective shareholder.
The paid-up share capital of an IBC company in Seychelles
The paid-up capital is the actual amount of money deposited in the Seychelles offshore’s bank account upon registration. Even if the law does not impose a minimum amount of money, each shareholder is entitled to contribute to the amount of money they want in the company. This is also when the subscribed capital turns into the paid-up capital of the Seychelles IBC company. This will also the time when the shareholders earn the right to make decisions in the company. In other words, the paid-up share capital allows the shareholders to make decisions in relations to the activities and future of an offshore company.
Shares issued in an offshore company in Seychelles
The share capital of an offshore company is divided into shares. Compared to other countries, IBC companies cannot issue bearer shares to their shareholders, however, it can issue registered shares which can take the form of:
•voting shares which will grant the shareholders the right of voting for various action int the company;
•non-voting shares which are usually issued for minority shareholders, based on their contribution;
•no par value shares and unnumbered shares which can be issued to minority shareholders;
•common shares, preferred and redeemable shares can also be issued by a Seychelles offshore.
What are the restrictions on offshore companies under the IBC Act in Seychelles?
Before enumerating the restrictions imposed on offshore companies in Seychelles, it should be noted that this type of company is regulated by its own law – the IBC Act. The law provides for the following restrictions related toopening and managing an IBC company in Seychelles:
•it may not perform any business activities in Seychelles;
•it may not own any property in Seychelles;
•it may not operate in the insurance sector in the country;
•it may not sell or purchase securities in Seychelles;
•it may not engage in gambling activities in the country;
•it may not be constituted under the form of a mutual fund.
Our Seychelles company registration agents can offer full information on these restrictions imposed on offshore companies and details about company formation in Seychelles. Our specialists can offer more details on the characteristics of the Seychelles IBC companies, as well as on the procedures involved when selecting the IBC for incorporation in Seychelles.
Foreign investors should be aware of the fact that the Seychelles IBC is also restricted from obtaining any tax benefits that are stipulated under the treaties for the avoidance of double taxation signed by the local authorities with other countries. However, this company type is entitled to numerous tax exemptions that are prescribed by the national law.
Currently, the local legislationprohibits Seychelles IBCsto be registered with the local authorities with trading names that include any of the following words: building society, stock exchange, government, licensing, bank, chamber of commerce, credit union, cooperative, royal and others, which are mentioned under the stipulations of the IBC Act.
Please watch our video on the restrictions of offshore companies in Seychelles:
Restriction exceptions in Seychelles
Even if the restrictions may seem many, foreign investors who want to open IBC companies in Seychelles must know that there are also a few exceptions to these impositions. Investors starting a Seychelles IBC must know that this company type can engage in various activities, that are mentioned below.
Even if the offshore company cannot undertake any activity in the country, it can engage in commercial activities with another IBC registered in Seychelles; the offshore company may open a bank account in Seychelles, it may own a vessel or aircraft registered in Seychelles and rent properties in Seychelles.
Although the Seychelles IBC is not entitled to develop any business activities under the form of a mutual fund, it must be observed that the local legislation stipulates an exemption from this rule, which is applied if the company is registered as a licensed entity under the Mutual Fund and Hedge Fund Act.
As presented above, the Seychelles IBC can’t develop securities related operations on the country’s territory, but the IBC is allowed to enter this type of operations outside the country’s territory, as long as it has a license in the field in the country in which it will enter this type of activity. Our specialists in company formation in Seychelles can offer more details on this stipulation.
Another restriction addressed to the Seychelle offshore company is that it can’t be used as a vehicle for entering the gambling sector. Still, foreign investors have to be aware that the company can be used for this purpose in the case in which the gambling activities will be carried out outside Seychelles. The regulation is available only if the company’s representative will apply for a license on the territory where he or she wants to develop this type of activity.
When starting the procedure of company formation in Seychelles, the company’s founders will need to provide a suitable company name. As we presented above, there are specific restrictions related to the wording of the company name, but specific words can be added as long as they receive an approval from the Registrar of Companies.
The exemption on the restrictions of the company name refers to the following words: union, mutual fund, insurance, bitcoin, charity or gaming. Our team of consultants can assist with more information on other words that can be used for the trading name of a Seychelles IBC.
What are the tax benefits of a Seychelles IBC?
Businessmen have a set of advantages when referring to the taxes applicable to IBCs. As an offshore jurisdiction, Seychelles provides numerous tax exemptions and low fees applicable to registration of the company. Our team of consultants in company formation in Seychelles can advise on the main benefits of this company type, but you can find out below some of the highlights of IBC:
•the company applies a 0% tax on the profits of the company obtained outside Seychelles;
•it also benefits from a 0% corporate income tax and 0% personal income tax;
•the company must pay an annual licensing fee, payable to the local institutions, which has a value of $100;
•the procedure for company formation in Seychelles can be completed in 1 day;
•it can be incorporated by 1 shareholder and it can have 1 director.
What are the basic rights of a Seychelles IBC?
Persons interested in company formation in Seychelles for an IBC company should know that they can benefit from multiple rights when setting up this legal entity. The Seychelles IBC is allowed to maintain a close business relation with entities such as attorneys, management companies, trust companies, investment advisers or accountants.
The company is also entitled to have its books of accounts kept in Seychelles, as well as its bank accounts and other deposits. With regards to the company’s shares, persons who are residents in Seychelles are entitled to own shares of an IBC, as per the regulations of the Seychelles IBC Act.
The obligations the company has from an accounting point of view can be explained by our specialists. Our team can also present the tax requirements addressed to this company type. The legislation regulating the tax compliance procedures can be verified with the Seychelles Revenue Commission, the authority which regulates the tax system addressed to taxable entities.
The meeting of the shareholders andmanagers can also be held in Seychelles, even if the company is an IBC. Related to shareholders and managers, we remind you that we offer nominee manager and shareholder services. For full information on the advantages of setting up an offshore company in Seychelles, please contact us.
Call us now at +230 5252 6703 to set up an appointment with our business consultants in Victoria, Seychelles. Alternatively you can incorporate your company without traveling to Seychelles.
As a our 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.