Company formation in Seychelles

Seychelles became an independent republic in 1976 and has since become an attractive destination for foreign investment. Several factors contribute to this, including:

Quick registration
Seychelles offers a convenient and fast company registration process. Registration usually takes one or two days after the documents have been verified.

Ease of maintaining a business
The government offers very favorable conditions for offshore companies, including no tax return filing and no annual meetings in the territory.

Territorial taxation system
The country has a territorial tax system that exempts companies from paying taxes on profits earned outside the country. This also applies to capital gains, stamp duty, and interest earned on transactions that take place outside Seychelles.

Simple business structures
Registering a company only requires one shareholder and one director, and this can be the same person. There are also no nationality restrictions in Seychelles and a company can be registered without the need to appoint a local director.

Confidentiality
Information about the beneficial owner of a company that is provided to the Registrar is confidential and will not be disclosed. The personal details of directors and shareholders are also protected from publication.

Versatility
It is a universal jurisdiction that is suitable for companies from a variety of sectors including entrepreneurship, commerce, e-commerce, SaaS, consulting, and intellectual property management.

Modern banking systems
Seychelles offers a wide range of banking services and products for companies incorporated in the islands. These services include multi-currency accounts with low financial requirements for customization.

Stability of the political and economic system
Seychelles is a democratic country with a market economy that has a stable political system. This means that the country’s laws and regulations are enforced and investors’ rights are protected. The government of Seychelles is focused on reducing the public debt. This creates a strong foundation for the economy, which ultimately leads to security for businesses and assets.

Transparent legal system
Seychelles offers strong legal protection for investors. The country’s legal system is based on a combination of French and English law, making it efficient and predictable.

Convenient location
Seychelles is a crossroads between Europe, Asia, and Africa. This makes it easy for companies registered in the islands to do business with clients all over the world.

To register a business in Seychelles, you need to meet various requirements depending on the type of company you choose. Common requirements include:

• Company name – must be unique and end with one of the suffixes indicating the type of company;
• at least one director over 18 years of age, of any nationality, residing anywhere in the world;
• company shareholders – for joint stock companies, a minimum of one shareholder is required, which can be an individual or a corporation, and can be of any nationality and reside anywhere in the world;
• the company must appoint a registered agent in Seychelles;
• the company must have a registered office in Seychelles and the office may be a physical address or a virtual office;
• the company must have a memorandum and articles of association;
• no authorized capital requirements;
• company secretary – a company is not required to have a company secretary (except for a company under a special license in Seychelles);
• company bank account – a company is not required to open a bank account in Seychelles but is encouraged to do so to facilitate transactions;

Once you have fulfilled all the requirements, you can proceed with the company registration process. The incorporation process usually takes 1-2 working days.

The main business structures to consider in Seychelles are:

Sole proprietorship
This is a business that is owned and operated by one person. This person is fully responsible for the business, both legally and financially. A sole proprietorship is a simple and affordable business structure and is a popular choice for non-residents. The registration fee is estimated to be around 150 SCR (approximately US$12), with the possibility of additional business license fees and taxes, depending on the type of business. This form of organization is attractive to most foreign entrepreneurs due to its low cost and the simplicity of the process.

Partnership
This is a business in which two or more people own and operate together. The partners share both the profits and losses of the business. A partnership can be successful if the partners trust each other and work together in a coordinated manner.

Limited Liability Company
This is a business structure similar to a partnership, but in an LLC, the owners are only responsible for the amount of money they put into the business. This means that the owner’s assets are protected in the event of a loss or liquidation of the business.

LLCs enjoy significant tax advantages in Seychelles. In particular, they do not have to pay taxes on income earned outside the country. This means that profits distributed to foreign partners are not taxed.

In addition, LLCs are exempt from certain taxes within the jurisdiction. For example, corporate income, real estate transactions, and import/export proceeds may not be taxed.

International Business Company (IBC)
This is a company set up to conduct international business. IBCs in Seychelles have several advantages including confidentiality, flexibility, and no taxation.

This structure is often used by entrepreneurs and investors for various purposes such as acquiring assets, owning and managing other companies, conducting international trade, or investing in overseas companies or projects. IBCs are also ideal for businesses operating over the Internet.

International company with a special license (CSL)
Foreign investors can set up a local company in Seychelles in the form of a Special License Company (CSL). This form of business was introduced in 2003 when the Special License Companies Act was issued.

Forming a CSL company in Seychelles does not require complicated procedures as in the case of an IBC. The main difference is that a CSL requires a special license issued by the Seychelles International Business Authority (SIBA). That said, a CSL can do business both inside and outside the country.

Also, unlike an IBC, to register a CSL a company must have at least two shareholders and at least two directors. A company secretary is a mandatory requirement. The authorized capital must be at least 1 US dollar, and it is mandatory to deposit at least 10% of this amount at the time of registration.

CSL, being a tax resident of Seychelles, is authorized to conduct business both domestically and abroad. Accordingly, it is subject to corporate income tax at the rate of 1.5%. However, unlike IBCs, companies with a special license can benefit from double tax treaties signed by Seychelles with the home countries of foreign investors. This is one of the main advantages of CSL. Seychelles has signed double taxation agreements with the following countries:

• China;
• Cyprus;
• Belgium;
• Malaysia;
• Thailand;
• Indonesia.

There are also several tax incentives applicable to CSL companies, such as exemption from stamp duty, social security contributions, and import and export duties related to equipment and furniture.

Seychelles is known for its relatively simple tax system. Today taxation in Seychelles is based on the following principles:

Territorial tax system. Only income earned in Seychelles is taxable, except certain passive income earned by Seychelles companies from non-residents, which is subject to an economic substance test. Offshore companies have no tax liability.

Self-assessment regime. Taxpayers are responsible for determining their taxable income, declaring and reporting it to the Seychelles Revenue Commission, and paying the relevant taxes.

That said, Seychelles does not levy personal income tax from 2022.

Corporate tax liabilities include:

• Corporate income tax. Corporate income tax applies to businesses operating in Seychelles. The standard corporate tax rate is 25% of the company’s income.
• Value Added Tax (VAT). The standard rate of VAT is 15%.
• Social Security Contributions. Social Security contributions are mandatory for both employers and employees. These contributions go to the National Pension Fund (NPF) and the program of assistance to victims of occupational injuries.
• Customs and Excise Duties. Seychelles levies customs and excise duties on imported goods. Prices may vary depending on the type of goods.
• Goods and Services Tax (GST). In addition to VAT, Seychelles also has a Goods and Services Tax (GST). It applies to certain goods and services.
• Property Tax. Property tax may apply, with rates varying depending on factors such as the value of the property and its use.

Please note that tax rules may change, so it is important to consult a Fast Offshore Licenses tax professional.

Companies in Seychelles are not required to have an annual audit but must keep records of their financial activities. Maintaining accounting records allows a company to control its financial activities and ensures compliance with tax laws. In the event of an audit, a company without proper accounting can be prosecuted.

Here are the main points to focus on when keeping accounting records:

• goods or materials purchased for the business, which includes date of purchase, cost, quantity, and supplier;
• all expenses related to the business, including payroll, utilities, rent, and others;
• sales proceeds;
• assets acquired, including real estate, equipment, and others;
• any funds transferred from the company for personal use.

In Seychelles, the most important 4 financial statements are the balance sheet, income statement, statement of cash flows, and statement of shareholders’ equity.