Seychelles Companies and Seychelles Trusts

General Introductory and Offshore Tax Information

Seychelles puts a variety of offshore business entities in the hands of investors and high net worth individuals. These entities help reduce taxes due to their tax exempt status as offshore companies and entities, as well as play a pivotal role in international wealth management, tax planning an asset protection.

Most entities, to name, Seychelles offshore companies (IBC’s), limited partnerships, offshore banks, offshore trusts and foundations benefit from full tax exemption from gift tax, succession tax, death and inheritance tax, withholding tax on dividends and interests, corporate tax and income tax. These taxes do not only apply to Seychelles offshore companies (Limited partnerships, IBC’s) and entities (offshore trusts, foundations and banks) but to the directors and shareholders who hold some form of interest in them.

To facilitate foreign exchange transactions, all Seychelles offshore business entities are exempt from exchange controls which are imposed on domestic companies. This facility is particularly necessary for Seychelles offshore banks whose transactions are done only in foreign exchange, as well as trusts and foundations whose assets are denominated in foreign currencies. Transactions involving securities are tax exempt as well for all Seychelles offshore business entities.

Any Seychelles offshore business entity may take the form of a Protected Cell Company if a decision is taken to separate assets into cells. Such company will be taxed in accordance to the type of business conducted, whether offshore or onshore. Hence, offshore PCC’s are tax free.

However, Seychelles offshore business entities are subject to registration and annual registration (e.g. IBC’s) or license fees (offshore banks and insurance companies). With regard to Seychelles offshore limited partnerships, annual registration fees applied on an increasing scale according to how late fees are paid, while offshore trusts pay a one-off registration fee. Seychelles offshore foundations are exempt from tax for 20 years.

The Company Special License (CSL) or Special License Companies are specially designed to allow entrepreneurs to take advantage of double tax agreements that Seychelles has signed with other countries. The CSL is comparable to the IBC but differs in that it is structured to be ‘transparent’ in terms of the reporting requirements that a CSL is subject to, including tax. Seychelles Special License Companies are however beneficiaries to a number of fiscal incentives for a period of 10 years; to be continued even thereafter unless otherwise stated. The fiscal and incentive regime for Seychelles CSL’s is as follows:

• 1.5% corporate tax
• Exemption from withholding tax and stamp duty
• No exchange controls exemption from the Trade Tax Act as it relates to the importation of furniture and equipment, except vehicles, to be used in the company’s registered office established in Seychelles
• Zero tax on dividends paid to a Seychelles resident or non-resident
• Zero tax on interest paid to both residents and non-residents
• Zero tax on royalty tax for copyright, supply of technical knowledge and know-how, right to use of commercial, industrial or scientific equipment
• Expat employees at registered office are exempt from work permit fees levied under the Immigration Decree.

Introduced in December 2009, the Seychelles offshore foundation is the newest offshore business entity added to Seychelles list of offshore corporate vehicles.

Seychelles Offshore Business Entities :

• Seychelles International Business Company
• Seychelles Offshore Foundation
• Seychelles Company Special License
• Seychelles Protected Cell Company
• Seychelles Offshore Limited Partnership
• Seychelles Offshore Banking
• Seychelles Offshore Insurance

Seychelles International Business Company (IBC)

Main Features:

• Law- International Business Company Act, 1994
• Seychelles IBC’s are commonly known as Seychelles offshore companies
• Seychelles IBCs are capable of issuing registered, bearer, voting, non-voting, preferential or ordinary shares, redeemable, shares, options, rights or warrants, unnumbered shares or no par value shares
• All Seychelles offshore companies must have a registered agent and office in Seychelles
• Not allowed to conduct business in Seychelles
• May not own an interest in immovable property in Seychelles
• May only lease property subject to the provisions stipulated in the relevant laws
• Must be holder of the relevant licenses in order to provide trust, banking, insurance and reinsurance services
• Must be registered with the necessary authority before providing services as a registered agent of office on behalf of other international companies
• A Seychelles IBC Can establish and maintain professional contact with accountants and laws
• May prepare and maintain books and records in Seychelles
• May hold shareholders and directors meetings
• May own vessels, shares in other companies formed in Seychelles, securities issued by the Government and Central Bank of Seychelles
• The name of an international business company incorporated in Seychelles must not be identical with that of another company incorporated under the IBC Act, nor must the name be very similar to the extent that it confuses or deceives consumers, except if consent is granted by the company involved for use of a name which is similar to its own

Seychelles Limited Life Company (International Business Company)

• An international business company is able to lengthen its duration for a period that does not exceed in aggregate 99 years from the date of incorporation

Seychelles International Trust

Main Features:

• Seychelles offshore/international trusts were established by the Seychelles International Trust Act (1994)
• The settlor of a Seychelles offshore trusts does not a reside in Seychelles at any time of the trust’s duration
• A Seychelles offshore trust’s trustee may be an international business company or a financial institution given the authority to act as a trustee
• Established either by oral declaration or an instrument in writing such as a codicil or will
• Seychelles offshore trusts have a duration of 100 years
• May invest in securities and other commodities in Seychelles and own any immovable property needed for the trustee’s office
• May take the form of a charitable trust for the development of education and religion and reduction of poverty
• Generally used for asset protection, privacy, minimizing tax burden, tax planning and family and succession planning
• A Seychelles offshore trust can discontinue as a Seychelles trust and redomicile in a different jurisdiction
• Any rule of forced heirship cannot invalidate the transfer or disposition of a person who establishes an international trust cannot be invalidated by any foreign rule of heirship

Seychelles Offshore Foundation

Main Features:

• Main formation documents are the Foundation Charter and the Certificate of Registration
• Some of the details included in the Charter include the value of the assets put in the foundation, reasons for establishing the foundation, particulars of the foundation agent and founders, the foundation’s name
• A Seychelles foundation charter must be prepared in writing and signed by all founders
• Seychelles foundations must conduct their affairs only outside Seychelles
• Activities that a Seychelles offshore foundation may engage in the Seychelles include maintaining books and accounts, corresponding with local accountants and lawyers, leasing property and keeping meetings in the Seychelles
• Minimum value of foundation assets is USD1
• Assets may be of any nature as long as they are legal and legally obtained, to include shares, interest and debentures of an offshore trust, offshore bank, limited partnership, IBC, CSL or PCC incorporated in Seychelles
• Limited, partnership and company must not be part of a Seychelles offshore foundation name
• Seychelles offshore foundations must designate a registered agent which is based in Seychelles
• Must have a council comprising of at least one councilor
• Minutes of all council meetings must be maintained

Seychelles Company Special License (CSL)

Main Features:

• Seychelles Special Licenses companies were introduced under the Companies (Special Licenses) Act, 2003 and are incorporated in accordance with the Companies Act, 1972
• Applications to incorporate a Seychelles CSL must include the names and addresses of the company’s directors, shareholders, secretary and registered office, signed and dated memorandum and articles accompanies by a notarial certificate, a business description
• Company Special Licenses are not permitted to issue bearer shares, but can issue nominee shares
• Management is undertaken by a board; minimum of two (2) directors
• A Seychelles IBC or foreign company registered in Seychelles may redomicile or continue to Seychelles as a Company Special License upon granting of a Certificate of Continue by the Registrar
• A Seychelles CSL may also continue to another jurisdiction
• Allowed to reserve name for incorporation purposes
• Directors are not obligated to be resident in Seychelles
• Must have secretary resident in Seychelles
• Subject to the special provisions providing for low tax status and confidentiality
• Application documents must include the Memorandum and Articles of Association, addresses and names of the beneficial owners, company secretary and directors
• Subject to all disclosure requirements that are not required for other modern low tax corporations
• Has full access to the double tax treaties signed by Seychelles
• Must file returns, accounts and the beneficial owner’s details
• Filed documents are not made available to the public

Seychelles Protected Cell Company (PCC)

Main Features:

• Governed by the Protected Cell Companies Act, 2003
• This Act enables Seychelles domestic and offshore companies to segregate assets into distinct cells
• Seychelles protected cell companies have single legal personality
• However, a cell created by a protected cell company is not a legal person separate from the Seychelles company
• A Seychelles offshore company which already exists can be converted into a protected cell company if the power to do so is provided for in the articles of association
• Can decide to have assets which are cellular or non cellular
• Can undertake contracts with assets belonging to a single cell
• Provided the beneficial owner with tax residency and transparency
• Can be used in captive insurances and umbrella funds
• Required to file accounts annually

Seychelles Offshore Limited Partnership

Main Features:

• Law- Limited Partnership Act, 2003
• Seychelles offshore limited partnerships conduct trade only outside Seychelles
• Seychelles offshore limited partnerships contain one or more general partners who assume unlimited liability for the partnership’s debts and obligations
• Contains one or more limited partners who assume limited liability except if otherwise stated in the partnership agreement
• Only general partners may undertake the partnership’s business and sign contracts, deeds and other documents
• Limited partners of a Seychelles offshore limited partnership assume unlimited liability for any activity he or she undertakes the business of the partnership with a person (legal or natural) who is not a partner
• Acting as a director or shareholder, being an employee or agent, surety or guarantor, reviewing or approving or voting are not considered undertaking ‘business’ of the partnership
• Corporate entities may be partners
• Resident individuals and corporate entities may also be partners if deemed resident in Seychelles (individual), incorporated under the Companies Special License Act, IBC Act or Companies Act, 1972
• Required to designate a registered office in Seychelles

Seychelles Offshore Banking

Main Features:

• Law – Financial Institutions Act, 2004; replaces the Financial Institutions Act, 1984
• Seychelles offshore banking business includes but is not limited to portfolio management, accepting deposits, money transfers, holding and administering securities and valuables, money brokerage services, forex trade, financial leasing, offering loans and mortgages
• A Seychelles offshore bank branch may be established by a company incorporated under the Companies Act or a foreign financial institution
• Offshore banking licenses issues by the Central Bank
• Upholds strict privacy laws
• Audited accounts and balance sheets are required from all Seychelles offshore banks for every financial year
• Accounting methods must comply with the International Accounting Standards
• May not do offshore banking with local residents

Seychelles Offshore Insurance

Main Features:

• Law – Insurance Act, 2008; replaces Insurance Act, 1994
• Regulates both domestic and offshore insurance
• Seychelles offshore insurance business is undertaken solely with risks and persons outside the Seychelles
• 20 years tax exemption for all offshore insurance business
• Licenses are granted for either long-term or general insurance business
• Only reinsurers are granted Seychelles insurance licenses for both long-term and general insurance business
• All Seychelles offshore insurers must maintain the solvency requirements
• All Seychelles offshore insurance companies are required to designate an auditor and actuary