Corporate Law and International Business in Seychelles
In the southern part of the equator in the waters of the Indian ocean there is an exotic island nation — the Republic of Seychelles. In spite of the fact that in recent years the country has been actively developing as an international resort and tourism destination, it is widely known as the region’s largest financial centre. In other words, Seychelles is a special jurisdiction with a loyal tax policy.
The Republic of Seychelles features relatively stable economic and political systems. Owing to the active diversification of the economy and reformation of the island corporate law, the local economy has been filled with foreign investments for many years to come. It should be noted that a record number of offshore entities is registered every year in the Seychelles jurisdiction. These are international offshore companies and trusts.
Seychelles: Financial Sector of the State
Alongside with the development of the tourism industry, the improvement of government financial sector and the financial services sphere is also being observed. The norms of the Seychelles corporate law provide a variety of financial tools for optimizing tax system and getting a preferential access to the world´s most promising markets.
Today, the island infrastructure meets all the international standards and satisfies the demands of any international business. These country offers a deepwater port, an international air harbour as well as modern telecommunications and communication services.
The Island Corporate Law
Speaking about the corporate legal relationships between the offshore businesses and the government, it must be noted that the legislation, which regulates registration and operation of the offshore companies, has undergone a reformation since the 90-ies of the last century. Such a necessity was driven by the new policy of the state, which was aimed at the development of international relations and support of the offshore business.
A number of the legislative acts were adopted, including the acts stimulating the investment activities and international trade. The government successfully implements a policy of diversification of the economy and actively develops such sectors as manufacturing industry, professional services, export of goods, etc.
The enacted legislative acts provide for the possibility of applying a zero tax rate to a certain category of companies. In particular, all the international companies, which conduct their commercial and economic activities outside the Seychelles jurisdiction, are not liable to corporate taxation.
It should be noted that the current legal model of the corporate relations in Seychelles is a progressive system based on the best practices of international financial centres. It comprises all the factors that are important for any entrepreneur, including:
- Ability to optimize tax payments and get more profits without violating the fiscal legislation;
- Simplified procedure of registering offshore company and the minimum cost of annual stamp duties;
- Effective tools that allow to ensure full secrecy and privacy of information about business and ultimate beneficiaries;
- Protection of financial assets and business interests at the legislative level, as well as active support of the offshore businesses by the government.
There is a possibility to register the most various legal forms and offshore entities in the case of getting a special state license. These include international insurance companies and offshore trusts, banking, finance and credit institutions, investment and public funds.
Tax Incentives for International Companies
An offshore company may enjoy a zero tax rate if all its income sources are located outside of Seychelles. Carrying out any financial transactions with the local tax residents is also prohibited. However, there is no restrictions on the tax residence of the managers and founders of the offshore entities. They can be either foreign individual persons or the offshore companies of a similar nature.
In general, the registration of an offshore company in the Seychelles offers the following opportunities for potential investors:
- Declared nature of the authorized capital of an offshore company and the absence of currency restrictions;
- Guaranteed repatriation of investment assets and received income;
- Preferential terms of importing professional equipment, semi-finished products, raw materials, vehicles and other equipment for the needs of а company;
- Possibility of the legalizing documents through the diplomatic representatives of the UK;
- Registration of the existing companies and creation of international holding structures;
- Fixed rate of annual stamp duty. Any changes to the current rate have no retroactive effect.
Offshore companies must have a local agent in order to be able to operate legally on the territory of the Seychelles jurisdiction. Functions of an agent may be performed by practising lawyers and legal advisers who have undergone a state registration and possess relevant powers. It is a local agent who provides you with a legal address for resending a correspondence from the state bodies. In addition to a local agent you can use the services of a local secretary, who will represent your company in the local state bodies. To register such a company you have only to contact our office in Dubai, the UAE.
Accounting and Financial Audit
The norms of the Seychelles fiscal law do not oblige offshore companies to conduct financial audit and file annual reports. A primary accounting is maintained in order to indicate the financial condition of a legal entity and evaluate the way of carrying out business activities. The shareholders choose independently the place of keeping primary accounting documents. Besides, there are no territorial restrictions.
Seychelles Offshore Company Dissolution
The applicable legislation provides for two ways of terminating activities of offshore entities, which are registered on the territory of the jurisdiction. In particular, these are dissolution by the decision of the founders of an offshore company and a compulsory government liquidation. The offshore company is also subject to dissolution and exclusion from the state register in the case of delaying the payment of the annual prolongation of registration.
In the case of a compulsory liquidation, a company can be reconstituted only after a long period of time and under the condition of paying all the fines and penalties. It is worth emphasizing that the compulsory liquidation of a company entails the liability of shareholders for debts and company obligations.
We are ready to help you and share our many years’ experience if you have any questions regarding the corporate law in Seychelles, or if you want to bring your business up to the international market and look for an appropriate jurisdiction. Contact our office in Dubai and get an expert advice.