How to start a Business in Seychelles?
When you think of places to start an offshore company and place where you want to move, Seychelles doesn’t exactly land on the top of your list, at least not on mine. But a couple of years ago, I was astonished by how potentially lucrative the Seychelles economy was. So i decided to start a business in Seychelles.
Nestled comfortably in the northeastern region of Madagascar, the Republic of Seychelles, which is composed of 115 islands and close to 100,000 people as of 2016, is responsible for producing the highest gross domestic product in the continent.
Its economic prowess is equaled by its natural resources and cultural diversity, making Seychelles not only a good place to start an offshore company, but also to live in.
But I get it; you don’t want to pack your stuff and move thousands of miles away from wherever your home is right now to take a chance and build a company in Seychelles without any concrete reason/s.
Why start a business in Seychelles
So before telling you how to start a business in Seychelles, let’s cover why to start a business there in the first place. For starters, Seychelles is a paradise for a business owner who loves the outdoors.
Sure, you can wear expensive silk suits on your company meetings and conference calls, but when you want to just relax and wear flip flops on the beach, Seychelles can deliver. Some activities you can partake in include hiking, island hopping, and snorkeling.
In addition to outdoor activities and plenty of natural space to de-stress and unwind after a stressful work week, Seychelles also offers a unique local cuisine that’s heavy on fresh seafood, coconut milk, and spices indigenous to Africa.
Now that you’ve gotten a brief travel review of Seychelles, let’s dig into unique political, geographic, and economic advantages of forming a lucrative business in Seychelles before finally talking about how to start a business in Seychelles.
Benefits of Starting a Business in Seychelles
The Seychelles government is actively looking for ways to strengthen its local economy, which has led to a ton of excellent tax advantages for aspiring company founders.
International business in Seychelles has no tax liabilities nor are there any minimum share capital requirements for your company.
The government of Seychelles also does not impose any ethnic restrictions on directors of a company in Seychelles; thus, a company can be completely owned and controlled by foreign directors and shareholders.
In addition, there are no tax returns, audits, and only minimum reporting required for a company in Seychelles.
Last but not least, Seychelles only requires a business to have one director and shareholder and both roles can be filled by the same individual.
One of the main concerns I had when I moved to Seychelles was its accessibility to and from surrounding cities and ports. You’d want good foot traffic for your business location in order to attract customers and investors. Seychelles has an international airport that caters to almost a million passengers per year.
Seychelles also has access to reliable telecommunication services, so an offshore company can stay connected with the rest of the world 24/7.
Low cost of living
An offshore company in Seychelles will have to deal with lower overhead and maintenance costs compared to a company situated in New York or Singapore where real estate alone can burn your runway in a few months.
According to Travel Tables (opens in a new tab), the cost of living for two people in Seychelles is an average of $1,275.
Registering a company in Seychelles will also be significantly cheaper, with registration fees starting as low as $150 USD. And because Seychelles doesn’t impose any minimum capital requirements, business owners can start their company small and not incur hefty business loans and the interest rates that come with it,
Now, you must be thinking, are there any disadvantages to how to start a business in Seychelles?
Or is it really an offshore entrepreneur’s paradise?
It would sound like a biased article if I didn’t include at least one disadvantage of forming a company in Seychelles, right?
Disadvantages of Starting a Business in Seychelles
Thanks to the IBC Act (opens in a new tab), which governs IBCs or international business companies in Seychelles, there are certain restrictions that an offshore company in Seychelles must deal with.
Keep in mind, however, that these restrictions only apply to a company that is categorized by the government of Seychelles as an IBC.
As an IBC, you are not allowed to own any property in Seychelles nor engage in any gambling activities in Seychelles.
Geopolitical instability is another factor that could prove to be a deterrent for those who wish to set up an offshore company in Seychelles.
Seychelles is a more urbanized region of Africa compared to its neighbors in the South. It also ranks high on the safety index.
Nonetheless, Seychelles is still subject and vulnerable to the civil unrest that is happening around it. It is no secret that business in the continent has been hampered for years by unstable and premature economic conditions. Cultural differences is another possible risk factor of forming an offshore business in Seychelles.
Since Seychelles is still an emerging economy, there are cultural practices, rituals, and market characteristics that an offshore company must prepare for and adapt to.
For instance, product usage in Seychelles may be very different from that of the western world. Now that you know, good and the bad of Seychelles better, it’s time to dive into how to start a business in Seychelles.
Forming an offshore company is difficult enough, but forming one that can survive long enough to monetize is a whole different ball game. I’ll walk you through the steps that I took for my company and how to avoid the common traps that doom a lot of wantrepreneurs.
Here are the essentials you need to start a business in Seychelles.
First Figure Out What Type of Offshore Company to Form.
A sole trader, also known as a sole proprietor, is perhaps the simplest form of business entity in Seychelles. Sole traders are subject to minimal legislation relative to other business forms.
You retain 100% control of your Seychelles business rather than have your decisions be impacted by shareholders and board members.
Nonetheless, having unlimited liability translates to higher personal risk since you assume all damages, penalties, and defaulted loans when your business goes belly up.
Seychelles banks may also give you a harder time when you apply for a company loan, depending on how good/bad your credit history is.
A partnership is another common form of company in Seychelles. Partnerships, as the name implies, involve multiple owners of a company. A partnership offers the benefits of flexibility and ease of operations since you have more people wearing the same hats and juggling as many tasks as you are.
A Seychelles business that is set up as a partnership also entails less paperwork and tax forms to fill out. Furthermore, since you have multiple people sharing the financial risk in a company, it’s easier to get a company loan, which is critical to surviving the first few months of your Seychelles business entity.
A Seychelles corporation or company receives many financial and legal breaks but also deals with several caveats involving government regulation and public scrutiny.
A Seychelles business corporation has its existence separate from its members; thus, it can enter into contracts and lawsuits.
A business company and its activities are directly governed by the Companies Act (opens in a new tab), which oversees most of the business formation, operations, and expansion.
The Companies Act also governs the termination of the business entity.
A trust is the least common form of business in Seychelles. A Seychelles trust can take a variety of forms and usually involves fewer bureaucracies as opposed to a company in Seychelles.
A Seychelles trust can be technically complex, but can also be advantageous when attached to a corporation. Trusts that have been formed under the Seychelles International Trust Act of 1994 (opens in a new tab) create an efficient, practical, and legal way of safeguarding your assets, such as in the case of charitable trusts and property-holding trusts.
International business companies
There are other forms of business in Seychelles that operate within the region. One of these special types of business is IBC, which covered briefly in the early parts of the article. International business companies are limited liability entities that operate outside of Seychelles. They are incorporated through the Registrar of International Business Companies (opens in a new tab). IBCs are exempt from all sorts of taxation.
As such, this form of business is ideal for a range of use cases including holding companies and copyright firms.
Protected Cell Companies
There are also companies in Seychelles that have been able to divide themselves into distinguishable cells without having to take on a separate legal existence.
These are known as Protected Cell Companies. It is made possible by the country’s Protected Cell Companies Act of 2003 (opens in a new tab).
In order to be categorized as a protected cell company, however, the company in Seychelles must first be incorporated under the Companies Act 1972( opens in a new tab).
Figure Out What Offshore Company to Start
The next step on how to start a business in Seychelles is to determine the type of business you want to run, for your lucrative business in Seychelles.
There are dozens of possible answers, so it makes sense to set criteria for judging which types of offshore company best fits you.
Without a properly laid out plan on how to filter out these business ideas, it can get confusing fast.
Take into account the unique geographic and cultural qualities of Seychelles when figuring out what kind of business you want to open up.
Strong industries in Seychelles include:
- Healthcare products
Organizations, both foreign and local, are pouring in more investments in these said industries. In fact, the World Bank Group (opens in a new tab) has reportedly increased its investments in Seychelles agriculture by roughly $2 billion in the past year.
This means that the infrastructure to support an offshore company revolving around these industries already exists and available to new offshore business owners in Seychelles.
I would also advise picking an offshore company on Seychelles soil that you are genuinely interested in. You’ll be working on the offshore Seychelles business for years, so it’ll help if you have a real interest in the problem you’re trying to solve.
That being said, a passion project won’t go far without any real demand from the Seychelles market pushing it forward.
Test the Target Audience of Your Prospective Company
Now that you’ve honed in on what type of offshore business in Seychelles, you want to start, the next step on how to start a business in Seychelles is to test the waters.
See if anyone bites. While it may sound like the most clever business idea in the history of Africa, you can’t know for sure that someone in Seychelles will buy into your business, its products/services, or it is brand until you get some market validation.
A lean market validation approach to test your offshore company in Seychelles depends on interviews with potential customers of your product/service. You can also test it by interviewing Seychelles business experts and industry analysts.
If you’re planning on doing digital business in Seychelles, landing pages and low-cost ads are great tools to get some market traction.
Obviously, you should start customer interviews with family and close friends.
When I was starting out, I would ask relatives and people I’ve worked with before in Seychelles on what they thought about my company idea.
Regardless if it’s positive or negative feedback, I always make sure to keep an open mind and listen to what they like/hate about the company idea.
Social media platforms, like Facebook and Instagram, are also great places to get feedback for your company without having to spend a dime or too much of your time.
Post a question or start a poll concerning your company. Stir the pot and soon you’ll figure out if there is a real need or value proposition that your offshore company brings or if your company just creates a problem that nobody in Seychelles cares about.
Register Your Company
Registering your company with the appropriate Seychelles government departments is perhaps the most important step on how to start a business in Seychelles.
It cements your entrepreneurial venture, strengthens your resolve, and officially declares your company in Seychelles.
This part of the process on how to start a business in Seychelles can also be quite stressful and time-consuming as this is the part when you start going to government agencies to fill out forms and pay registration fees. To register your offshore company in Seychelles, visit the Seychelles Registrar website (opens in a new tab).
Provide them with a company name that you would like to use and check if the company name is available. If it’s taken, you’ll have to come up with another name.
Coming up with a name for your company should be a step of its own. It’s a huge deal as I’m sure every entrepreneur in Seychelles can agree to.
To successfully register your offshore company in Seychelles, you’ll also need the proper license issued by the Seychelles Licensing Authority (opens in a new tab).
Detailed information on your business
There are exceptions to registration through this process including Seychelles agriculture business projects, which are overseen by the Ministry of Environment, Natural Resources and Transport, and foreign vessels, which should report to the Maritime Safety Administration company.
Two other business types that have their separate respective licensing agencies are crafts and cottage industries and the agriculture sector.
The registration form that’s available on the Seychelles government’s website will ask for detailed information about your company including:
- Entity name
- Registration type
- Company address
- Names of sole trader or partners
- Nominal share capital
- Any supporting documents, such as a declaration of compliance and an article of association.
If your offshore company is planning on doing any construction on Seychelles soil, you’ll also need a construction permit from the Planning Authority, Ministry of National Development.
Furthermore, Seychelles will require you to procure an Environment Impact Assessment from the Department of Environment of Seychelles (opens in a new tab).
If your offshore company operations involve any food or chemical processing or any activities that could put the life of the Seychelles locals at risk, you’ll also need to pass an occupational safety and health inspection from the Department of Health (opens in a new tab).
You can schedule an appointment or inquire more information about the inspection by contacting the Ministry of Health and Social Development branch of the Department of Health.
Lastly, you’ll need to register your offshore company with the Social Security Fund (opens in a new tab). This step must be done within one full week after your company is officially operational.
Build Your Company Brand
Now that you are finished with the launch of your Seychelles company, it’s time to start growing the company.
Start building your company brand online, through targeted ads and social media campaigns. Blog about your new company and tailor the content to connect with your Seychelles audience.
Building a solid company brand will take time. It’s unlikely that you’ll see results from your efforts in the next week or so. Use search engine optimization techniques to get better placement for your Seychelles company marketing content.
Next, go online and subscribe or follow pages that are based in Seychelles. Any high-profile individual or group should be of interest to your company.
Seychelles is fairly large, with almost 100,000 residents. You’ll best cover the country by means of digital marketing tools and resources.
Refine Your Company and Its Offerings
Now that your company is gaining more attention, it’s time to look at how you can streamline it for faster growth and more profits.
Your company isn’t perfect as is. It will need countless revisions and constant finetuning to keep growing. Your company will greatly benefit from the feedback that you receive from your customers.
Use it to make the necessary adjustments, whether it’s as simple as changing the name of a product line that your company sells or something bigger, like modifying the assembly line or financial model that your company is using.
Find a Supplier/Distributor For Your Company
Working with a reputable supplier/distributor is important for your offshore Seychelles company. If your company supplier or company distributor cannot deliver, it suffers the backlash from your Seychelles customers.
Not only do hiccups from your Seychelles supplier/distributor result in lost profit, but the damage it does to your brand may be irreparable and even costlier than the monetary loss.
You can find a list of distributors and suppliers for your Seychelles company in YellowPages.sc, which is a third-party website listing all registered distributors within Seychelles.
Depending on what your Seychelles company sells and what type of delivery timeline it needs, you can find several choices for your company without compromising on price and quality.
Get a Company Loan
For the most part, all the previous steps required minimal monetary investment for your company.
But if you want to start hiring employees and a supplier/distributor, your company will need more money. There are several funding sources your company can rely on in Seychelles.
Factors that will play a role in how easy or difficult your company will be approved for a loan include your credit history and the type of company you have.
As mentioned earlier, a partnership type of company is usually easier to get a loan for since risk is split between multiple owners.
Some big names in the loan industry of Seychelles are:
- Development Bank of Seychelles
- Seychelles Credit Union
Because of favorable tax conditions in Seychelles, your company may also seek funding from international sources, such as crowdfunding campaigns or angel investors in other countries.
Remember that approaching big banks and private lenders for your company will dilute your ownership of the company. Be careful about how you give away portions of your company.
If you’re careless, you might relinquish control of your company without even knowing it.
How to Start a Business in Seychelles: Final Thoughts
Your Seychelles company will run into several challenges. Heck, I’ve been operating my own Seychelles company for some time now and am still working out the kinks.
Granted, Seychelles remains fraught with development challenges including the need to focus on increased labor force productivity, participation, and performance.
Yet with the number of tax regulations that could benefit your company, the booming tourism scene that is bringing in more money for the local economy, and the limitless natural resources that could also position Seychelles as a key player in certain industries, it’s definitely worth the risk to build a company in Seychelles.