Seychelles IBC - Seychelles International Business Company

Introduction to Seychelles

Advantages

1. A popular and well respected jurisdiction with flexible incorporation laws and an innovative special licence company that can be used to take advantage of Seychelles’ growing network of double taxation agreements.
2. Directors and shareholders not placed in the public registry.
3. Banking secrecy still considered adequate for most offshore requirements.

Disadvantages

1. Restrictions on bearer share issuance which requires local registered agent to “immobilize” them.  (We recommend the setting up of a Panama foundation as sole shareholder or if unrestricted bearer shares are a must, a Panama company).
2. Limited number of local banking options and accounts not as easy to open as in prior years (but still possible despite additional paperwork requirements).
3. Network of Double Taxation Agreements with OECD approved language that include Mutual Legal Assistance agreement language which weaken Seychelles as the best asset protection haven. (check here to see if your country is on the list)

Seychelles comprises a group of 115 of the most scenic islands in the world located approximately 1000 miles east of Africa between 4 and 7 degrees south of the equator. Seychelles is not in the cyclone belt giving it an advantage over other jurisdictions such as Mauritius and all of the Caribbean jurisdictions.

Seychelles is a 100% self-governed democratic republic, gaining its independence in 1976 from the United Kingdom. Seychelles remains an independent member of the UK Commonwealth, but is under no authority of the British Crown (such as BVI, Anguilla, Caymans, Turks and Caicos, Isle of Man, Channel Islands and Gibraltar). Likewise, Seychelles is under no jurisdiction of the European Union. Seychelles is a full member of the United Nations.

Seychelles offers one of the most attractive total packages in the offshore world with its available non-resident tax free and tax resident low tax structures; growing network of tax treaties used for investment into other countries; low government fees; and international trade zone all created and supported by one of the best legal and regulatory regimes in the offshore world.          

Legal and Regulatory Features

• Common Law/Civil Law hybrid legal system
• Low government licensing fees ($100 for IBC/$1000 for CSL)
• Tax free Seychelles International Business Company (IBC)
• 1.5% low tax resident Special License Companies (CSL)
• Modern legislation allowing for and regulating offshore companies, offshore banking, offshore insurance (including captive insurance), mutual funds, hedge funds, protected cell companies, and limited partnerships
• Growing network of Double Taxation Avoidance treaties: Those ratified and in force include China, Cyprus, Malaysia, Indonesia, South Africa, Mauritius, Vietnam, Thailand, Botswana, UAE, Oman and Belgium and Qatar.  Negotiations concluded with Russia, Egypt, Kuwait, Czech Republic, Tunisia, Namibia, and Bahrain.  Negotiations in progress include Philippines, Malta, Burundi, Ivory Coast, Lesotho, Morocco and Uganda. 
• No mutual legal assistance treaties (although the DTA’s contain language recommended by the OECD)
• Not a member of the EU or under obligations of measures such as the EU Savings Directive 2005
• Government commitment to establishing Seychelles as a major international offshore financial center

Current Developments

Seychelles recently passed three new very important pieces of legislation: the Mutual Fund Act 2008, Securities Act 2007 and Insurance Act 2008. All build upon excellent existing products and reflect "best practices" born from the benefit of insight into other similar products in competing jurisdictions and leading international experts who assisted in crafting the legislation.

Seychelles IBC

Company Structure

Seychelles Beach

A Seychelles IBC is a flexible structure allowing for the corporation to conduct international business in an efficient manner.  It is a limited liability company with protections among the best of any jurisdiction due to its excellent enabling legislation, the International Business Companies Act 1994. 

• A Seychelles International Business Company can be incorporated in 2-3 business days The name of the company may be in any language; however an official translation into English or French is required if in anything but those two.
• A registered agent and registered office in Seychelles is a requirement for all offshore company formations. 
• Notarization and Apostille (often needed to establish an offshore bank account, especially in Europe) are available and included in our Seychelles incorporation packages.

Privacy

The names of directors and shareholders do not appear on the public record.  It is against the law for a registered agent or anyone else privy to information regarding the names of directors and shareholders of a Seychelles company to disclose to any third party accept if by request of the Seychelles Supreme Court or the Seychelles International Business Authority.  The only records delivered to the Registrar are the Memorandum and Articles of Association which have no reference to the beneficial owner, directors, officers or shareholders.

Protection Against Confiscation or Seizure

Where a governmental authority, whether it is legally constituted or not, in any jurisdiction outside Seychelles:

• By or in connection with a nationalisation, expropriation, confiscation, coercion, force or duress, or similar action; or
• By or in connection with the imposition of any confiscatory tax, assessment or other governmental charge,

takes or seizes any shares or other interest in a company incorporated under this Act, the company itself or a person holding shares or any other interest in a company, including an interest as a creditor, may apply to the court for an order that the company disregard the taking or seizure and continue to treat the person who would have held shares or any other interest in the Seychelles IBC company but for the taking or seizure of the shares or other interest as continuing to hold the shares or other interest.

Capital

Standard capitalisation for a Seychelles IBC is USD 100,000 and the licensing fee is USD 100.  Share capital and total shares are unlimited with no change in the government licensing fee.  There are no minimum or maximum capital requirements for a Seychelles IBC.

Shares

• Shares of the Seychelles corporation may be issued in a variety of forms and classifications and may include: Par or No Par Value, Voting or Non-voting, Preferential or Common, Nominal or Bearer
• Shares may be issued for money or for other valuable consideration.
• Shares may be issued before any payment is made.
• Shares can be issued in any currency.

Shareholders, Directors and Officers

• Only one director and shareholder are required and can be the same person.
• Nominee shareholders and directors are permitted and Sterling Offshore provides this service.
• No statutory requirement for officers; however, if officers are required they can also be directors and shareholders.
• Shareholders and directors may be of any nationality and reside in any country.
• Directors and shareholders may be either a natural person or a corporate entity.

Meetings of Shareholders and Directors

• Seychelles IBC's are not required to hold annual shareholder meetings or board meetings.
• When a meeting of shareholders and directors is held, a proxy may represent a shareholder or director and speak or vote on his behalf.

Taxation and Fees

• Seychelles International Business Companies are zero tax entities as long as profits are derived outside of Seychelles.
• All annual renewal fees are due on the anniversary of the company. 
• Government fees are fixed for life.
• IBC’s are exempt from stamp duty on exchange of shares or the sale of any assets.

Corporate Books and Records

• Annual filings or accounts and financials are not required.
• There is no requirement to have an auditor.
• If meetings of an IBC are held, then the company shall keep:
• Minutes of the meeting of its shareholders and directors
• Copies of all resolutions by shareholders and directors
• The records and Minutes of any meetings must either be kept at the registered office or another place chosen by the directors as long as this place is disclosed to the Registrar.

Registers

• A Register of all directors must be kept and maintained.
• A Share Register must be kept and maintained. The register may be in such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents.
• The Registers of directors shall be kept in any place as the directors determine and the company shall inform the Registrar of the place at which they are kept.

Currency

There are no currency limitations or foreign exchange controls allowing the Seychelles IBC to operate in any country and in any currency.

IBC Restrictions & Exemptions

An International Business Company incorporated in the Republic of Seychelles shall not:

• Carry on business in Seychelles;
• Own an interest in immovable property situated in Seychelles, or a lease of immovable property situated in Seychelles
• Carry on banking as defined in the Financial Institutions Act 1984 or a trust business;
• Carry on business as an insurance or a reinsurance company; or
• Carry on the business of providing the registered office for companies.

Seychelles IBC's may:

• Have professional contact with local lawyers, accountants, trust companies, management companies, etc.,
• Hold meetings of shareholders and directors in the Seychelles; 
• Own shares in other Seychelles Companies under the IBC Act or the 1972 Companies Act;
• Own government or central bank securities;
• Own vessels which are registered in Seychelles;
• Have its shares held by a resident of the Seychelles.

Seychelles IBC Summary

Seychelles IBC Package & Fees

Seychelles IBC registration and maintenance fees

For USD 1675 (+ USD 75 fedex) we provide the following complete Seychelles incorporation and account opening package:

Seychelles IBC package includes:

1. A Seychelles International Business Corporation comprising Certificate of Incorporation, Certificate of Endorsement, Articles of Incorporation, Transfer of Subscription Rights, Share Certificate(s) and initial corporate minutes resolution. Apostille included at no extra charge.

2. A full service multi-currency offshore bank account in Belize and/or St. Vincent and/or St. Lucia with internet banking, time deposit options, ability to send and receive bank wires from any other bank. Bank account opening option in Seychelles also available with major international bank for additional USD 400.

3.. No-name VISA Electron Debit/ATM card with 3,000 EUR (approx $4,500 USD) daily access limit or no-name USD Mastercard Debit/ATM card with $2,000 USD daily limit.

4. Secured offshore Mastercard with online access (annual fee billed to first statement).

5. An offshore brokerage account in Panama with full online execution available and access to all major stock and futures markets in North America, Asia and Europe, managed CTA and forex programs, USD and EUR account options.

6. Offshore mail receiving and forwarding pre-paid for the first six months. Upgrade to one full year for additional USD 150.

7. Optional nominee director and/or shareholder service available for USD 250 or USD 350 respectively.

Seychelles IBC only with brokerage account and debit card option available for USD 1275.  Other account opening options are available. Annual maintenance fee is USD 600.

Special Seychelles IBC – Panama foundation “Bullet Proof” Package includes:

1. Original Articles of Incorporation (in Spanish for foundation) with apostille for both foundation and IBC,

2. Official English Translations of Articles of Incorporation for foundation with apostille,

3. Original Certificates of Incorporation for both foundation and IBC and English certified translation with apostille for foundation.

4. Resident Agent and Registered Office for both foundation (in Panama) and company (in Seychelles)

5. 3 Individual Nominees appointed to the foundation council and two to the company board (if required for Seychelles IBC).

6. Pre-signed, undated nominee council and company board resignation letter with notarized and apostilled Powers of Attorney documents signed by the nominees for the foundation and company giving you or your designee full control over the day-to-day management and operations of both, allowing you to open bank accounts etc.  You may also provide the attorney-in-fact name, citizenship and passport information as an alternative if you need this information included in the text rather than being written in by yourself later.

7. Notarised foundation private protectorate document and Foundation beneficiary certificate with name left blank allowing you to issue it to any person or entity that you elect at a time of your choosing.

8. Registered signed and sealed Share Certificate naming Foundation as sole stockholder

9. Initial corporate resolution appointing officers of corporation (First Minutes) and First Act document for the foundation.

10. Panama based bank accounts for the foundation (or Belize) and for the company offshore bank accounts with full internet banking in Belize, St. Vincent, St. Lucia or Seychelles.

11. No-name VISA Electron Debit/ATM card with 3,000 EUR (approx $4,500 USD) daily access limit and/or no-name USD Mastercard Debit/ATM card with $2,000 USD daily limit.

12. An offshore brokerage account for the corporation and/or foundation with full online execution available and access to all major stock and futures markets.

13. Optional trading account with offshore forex broker.

14. Offshore mail receiving and forwarding pre-paid for one full year (only pay actual postage or courier expense).

15. All government taxes and registered agent fees paid up until formation anniversary (2nd year renewal cost only $1400 - includes all government taxes and registered agent fees for both structures along with nominee fees).

USD 3,450

The procedure:

1. Complete our secure order form here  and email us passport copy and recent home utility bill or other document showing home address for each appointed director.
2. We will send you our professional invoice and payment instructions dependent on your payment choice (Visa/Mastercard, Moneybookers, Wire transfer, Western Union, Moneygram, cheque).
3. We email you confirmation of receipt and/or processing of your payment along with electronic account opening forms (banks that require us to send only hard copy application will arrive with all the incorporation documents).
4. We receive your payment and start the incorporation process. Please allow about two weeks for the preparation of all applicable documents.
5. We notify you that documents are ready to be shipped and provide courier tracking number.
6. Account application documents are signed where indicated and sent back to us for further processing and completion (as needed) with notarized and/or apostilled identity documents and reference letters as specified in your account opening documents.
7. We notify you once account has been opened and provide you with further instructions from the bank for funding the account.

Seychelles CSL - Special Licence Company

The Seychelles CSL (Company Special Licence) is a Seychelles domestic company, incorporated under the Companies Act 1972, which is granted a special licence under the Companies (Special Licence) Act 2003 (“the CSL Act”).

Unlike the Seychelles IBC (which is a tax exempt entity and non-resident for Seychelles tax purposes), the CSL is a tax resident of the Seychelles and may carry on “permitted” business inside as well as outside of Seychelles. However, the permitted business requirements are such that CSL status is only granted where the Company is to hold investments, or provide services to clients, outside of Seychelles.

The CSL has substantial appeal (particularly to international groups), as a tax-efficient vehicle for permitted uses under the CSL Act including, in particular, use as an intermediary holding company, to hold and license out intellectual property or as a services company (e.g. management, consultancy, etc).

Fiscal Advantages

• A CSL is liable for Seychelles business tax at the rate of 1.5% on its world-wide taxable income (which, when a CSL is accessing a Seychelles Double Taxation Avoidance Agreement, may be fully avoided when tax credits apply – for example, if not less than 1.5% foreign withholding tax has been paid in respect of income received by a CSL). “Taxable income” means assessable (gross) income less allowable deductions.
• A CSL is exempt from Seychelles withholding taxes on dividends, interest and royalties
• A CSL is exempt from stamp duty on property transfers, share transfers and other business transactions
• The fiscal exemptions granted to a CSL under the CSL Act shall be guaranteed for ten years from the date of incorporation of a CSL and shall continue in force thereafter unless otherwise provided for by written law (the statutory guarantee period is anticipated to be extended to 20 years)
• The CSL (unlike the IBC) has access to Seychelles' steadily expanding network of double taxation avoidance agreements (“DTAs”) – including China, Thailand, Indonesia, Malaysia, Cyprus, South Africa, Botswana, Mauritius, Oman, etc. Details of any specific Seychelles DTA are available upon request. Seychelles DTAs with China and Indonesia are particularly attractive in terms of available tax relief.

Directors

• Minimum number of directors: 2
• Corporate directors permissible: yes
• Local director requirement: no (However, having all or a majority of Seychelles resident directors, is essential where a CSL intends to access a Seychelles Double Taxation Avoidance Agreement)
• Publicly accessible records of directors: yes
• Location of directors meetings: anywhere

Shareholders (members)

• Minimum number of shareholders: 2
• Corporate shareholders permissible: yes
• Local shareholder requirement: no
• Location of shareholders meetings: anywhere
• Details of shareholders are required to be filed with the Seychelles Government Registry, however such information is not publicly accessible

Beneficial owners (clients)

• Details of beneficial owners are required to be filed with the Seychelles Government Registry, however such information is not publicly accessible
• Shares may be held by a nominee on behalf of beneficial owner client (provided the beneficial owner’s details are also disclosed)

Company Secretary

• Seychelles resident Licensed Company Secretary required

Share Capital

• Standard currency: USD (but any other convertible currency is permitted)
• Registered shares (Bearer shares not permitted)
• At least 10% of the authorized share capital must be issued and paid up. Therefore and unless a client requires a higher share capital, “standard” authorized capital is $100 comprising 100 shares of $1 each; of which not less than 10 shares being issued and paid up on subscription

Accounts and Returns

• Audit requirement: yes
• Requirement to file annual audited accounts: yes
• Requirement to file annual company return: yes
• The filed Accounts and company return are not publicly accessible

Miscellaneous

• Confidentiality: use of nominees is permitted, and whereas shareholder and beneficial ownership name and address are required to be disclosed to the Seychelles Government Registry, such information is subject to strict confidentiality obligations on the Registrar and will not be accessible pursuant to any public search of the Registry
• A CSL is required to have a registered office and a licensed Company Secretary in Seychelles
• A Company Seal is optional
• A CSL is required to hold an Annual General Meeting
• Trading restrictions: A CSL may carry on permitted business inside as well as outside of Seychelles, as authorized by its “special licence” and the objects clause of its Memorandum and Articles of Association. Certain activities may not be carried out by a CSL without the appropriate additional licence – such as mutual fund activity
• A Seychelles CSL has the same powers as a natural person, including the right to sue and be sued. It is a separate legal entity with limited liability and has perpetual existence
• Provision for "redomiciliation": a foreign company or Seychelles IBC may be continued as a CSL - and a CSL may redomicile to another jurisdiction
• A CSL’s name must end in the suffix, “LIMITED”, to denote limited liability
• A CSL is a Seychelles resident for taxation purposes
• Any charge, mortgage or other security interest created by a CSL over its assets is required to be registered pursuant to the provisions of the Companies Act 1972 (sections 92 and 93)
• A CSL is required under the Companies Act 1972 to maintain various registers at its registered office, including a Register of Members and a Register of Directors and Secretaries

Seychelles CSL Summary

Seychelles CSL Registration and Maintenance Fees:

Our complete cost to form a CSL is USD 4500 which includes everything needed with the exception of the following:

• Provision of a Resident Natural Person Director (add USD 300 each if non-resident and USD 700 if Seychelles resident needed for tax residency purposes) - minimum of 2 directors required
• Provision of a Nominee Corporate Shareholder (add USD 250 each) - minimum of 2 required

Annual Maintenance Fees

Annual fees start at USD 2000 in addition to any nominee director or shareholder fees that may apply.

Using a CSL as a Vehicle for Doing Business in China

China tax changes

China's recently enacted Enterprise Income Tax ("EIT") Law (effective from 1 January 2008) introduced a new uniform income tax regime which applies to both foreign and domestic enterprises. Under the EIT Law, foreign investors are now exposed to higher Chinese taxes than in the past. China is also becoming increasingly serious about tax collection (Chinese tax collection was up by approximately 30% for year ended 2007).

Under the EIT Law Chinese companies are generally subject to 20% Chinese tax on payments to non-residents. It is anticipated that many foreign owned businesses will enjoy a concessionary 10% withholding tax rate, but which may be further reduced using a Double Taxation Avoidance Agreement ("DTA").

Seychelles / China DTA

Use of a Seychelles CSL, in conjunction with the Seychelles / China DTA, provides significant scope to reduce Chinese tax exposure. The Seychelles / China DTA caps Chinese withholding tax on dividends at 5% and 10% on interest and royalties, provided that the CSL has its effective management in Seychelles (and the CSL is not tax resident in China). In contrast, while the Hong Kong / China DTA also caps Chinese withholding tax at 5% if the Hong Kong company owns 25% or more of the shares in a Chinese company, the Hong Kong / China DTA only caps Chinese withholding tax at 10% if the Hong Kong company owns less than 25% of a Chinese company. The Seychelles / China DTA therefore has a distinct advantage over the Hong Kong / China DTA in such cases, which will be relevant to Chinese investment mutual funds and other non-controlling foreign investors.

Another significant benefit under the Seychelles / China DTA is avoidance of Chinese tax on capital gains made by a CSL selling shares held by it in a Chinese company if the CSL holds less than 25% of the issued shares in the Chinese company and the assets of the Chinese company do not principally consist of immovable property (real estate). Once again, this will be of interest to China oriented mutual funds and other non-controlling investors. China has already indicated plans to enforce taxing of capital gains on Chinese share disposals.

A further attractive benefit under the Seychelles / China DTA is that no tax is payable in Seychelles (on Chinese-sourced income of the CSL) if Chinese withholding tax of at least 1.5% is paid on payments made by a Chinese company to a CSL. That is, under the Seychelles / China DTA withholding tax paid in China can be credited and set-off against the 1.5% Seychelles business tax payable by the CSL to fully discharge all business tax liability in Seychelles.