Legal & Accounting & Tax considerations for Seychelles company formation in 2021
- If properly structured, a Seychelles nonresident company’s offshore profits are legally tax exempt;
- A resident company is taxed at corporate income 25% on revenue generated in Seychelles. However, there are no capital gain tax, interest, dividends, no gift, inheritance, property or estate taxes. A Seychelles formed company can benefit from the double tax treaties;
- Withholding tax for Seychelles companies is levied as follows:
- 15% on non-resident dividends;
- 15% on non-resident interest;
- 15% on non-resident royalties;
- 33% on payments of interests by a financial institution at maturity of a bearer security.
- An IBC company is completely tax free for a period of twenty years from the Seychelles business setup date, provided the company does not enter into business with local residents. However, the company is allowed to conduct business with other IBCs. IBCs cannot benefit from the double tax treaties;
- An IBC cannot take advantage of Seychelles double taxation agreements;
- A Seychelles Special License Company (CSL) is a domestic company formation with a special license, authorized to carry out specific business as per the laws. A corporate income tax of 1.5% is levied on its worldwide profits. Investors pursuing a CSL company formation can benefit from Seychelles’ double taxation treaties with several countries, including China, Indonesia, Malaysia and Thailand;
- Clients should note, the beneficial owners of the CSL are notified to the Seychelles Financial Services Authority during the company formation process. A register of shareholders and directors is also to be kept with the company’s agent in Seychelles
- Seychelles has signed 28 DTAs worldwide, minimizing withholding tax on fund transfers between countries;
- There is no personal income tax in Seychelles. Employment income earned by individuals is not subject to income tax. There are no individual or corporate capital gains, net worth or inheritance taxes;
- In accordance with the Seychelles Business Tax Act 2007, each Seychelles IBC must provide signed Annual Declaration disclosing the location of the company accounts and other financial records of the company. There is no requirement to file annual accounts;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations;
- Seychelles ranks 44th on the Corporate Tax Haven Index 2019. The index notes that Seychelles’ corporate tax policies are ‘corrosive’ to the global economy.
Legal and compliance
- According to the Companies Act, a company must have at least one director and one shareholder of any nationality for a company formation in Seychelles;
- The Memorandum of Association is a contract between the shareholders signed during the company formation and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
- Seychelles company formation are dispensed from lodging annual return or tax return;
- A private company is required to maintain both a local registered address and a local resident company secretary for Seychelles company formation;
- Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with the companies registry;
- Company information such as capital structure and shareholder and director details are not publicly available. However, the Seychelles Business Register discloses information including i) legal name ii) trading or business name iii) type of entity (company, partnership, trust etc) and Seychelles Business Number (SBN) status;
- The process of deregistering a company is dictated by the Government. This process will take a minimum of 6 months. Healy Consultants’ fee to project manage company deregistration is US$1,450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office.
- The Seychelles government requires all entities registered in the country to submit annually an Ultimate Beneficial Owners’ (UBO) Declaration. The declaration is held as an electronic or paper register with the company’s registered agent’s office in the Seychelles, and may on request be shared with i) the Seychelles Anti-Corruption Bureau ii) the Central Bank iii) the Seychelles police iv) Seychelles Financial Intelligence Unit and v) the Seychelles tax authority.
- The UBO declaration includes information such as i) name and address of each beneficial owner and ii) details of the beneficial interest. A company failing to maintain the UBO register will be liable to a fine. However, the register is not available for public viewing.
- Public companies whose securities are listed on securities exchanges licensed under the Seychelles Securities Act or licensed in an International Organization of Securities Commissions’ member state are exempt from making a UBO declaration.
- Because of the period leaking of information to the public, for example via the Pandora Papers and the Panama papers, the Seychelles has implemented stricter rules on the maintenance of accounting records.
Recruitment in Seychelles
- Recruitment of foreign labour requires the employer to justify the hiring of foreign worker in place of a Seychelles national. The foreign employee is expected to have professional and educational qualifications relevant to the position;
- Foreign investors in Seychelles International Trade Zones can recruit expatriate workers free of government fees. This helps international investors fulfill economic substance requirements in the Seychelles.
Licensing in Seychelles
- When pursuing Seychelles company formation, a general license is required;
- Any financial business registered in Seychelles requires a financial license and payment of an annual fee to the Government.