Question and answers on Seychelles Business

Considering that Seychelles is a famous offshore jurisdiction, the cost of opening a company is relatively low. The cost involved includes a mandatory government fee of approximately 150 USD, usually paid to the Business Registrar. The fee stood at 100 USD until it was revised effective from April 1, 2020.

To set up the business, you will require a registered agent to assist you in the incorporation process, which also comes with a fee. The fee varies from one agent to another, and it also depends on the services received. Agent fee is recurrent, and it is approximately 300 USD every year.

There is no minimum capital deposit for starting a company in Seychelles. This means that an entrepreneur seeking to start limited liability companies under the Company Act 1972 is not required by law to make any share capital deposit. For those planning to start an offshore company in Seychelles, as well there is no minimum share capital required.

As stated earlier, your chosen registered agent will assist you in the incorporation process, including gathering the required documents. Some of the documents required to set up a company in Seychelles include:

• Business name registration copy
• The company’s director report and their proof of residency
• Shareholders’ personal information
• The official address of the company in Seychelles, which is a mandatory requirement
• Memorandum and articles of association

According to the country’s financial authority, all international businesses must pay an annual renewable fee of around 150 USD. This fee includes the ISCP tax. If an International Business Company (IBC) fails to renew on the due date, a penalty of 24USD applies within 90 days. Upon late renewal of more than 90 days from the due date, a penalty of 50% will be imposed on a business — that is 80USD.

There is a tax charged on profits made by businesses in Seychelles. The normal income tax rate for businesses operating in the country is usually 33% on income exceeding SCR 1,000,000 and only 25% on the first SCR 1,000,000.

When it comes to IBCs, they are not taxable in Seychelles. These companies are exempt from business tax, capital gains tax, stamp duty, personal income tax, and withholding tax related to non-residents receiving interests, dividends, and royalties. A company is only liable to pay tax if it or its activities are considered resident in Seychelles.

Yes, there is a corporate tax in Seychelles, also known as the business tax. Normally, companies are subjected to a tax rate of about 25% for the initial USD 48,460 made by the business. If a business generates more than USD 48,460, it will be subjected to a tax rate of 33%.

Corporate tax is computed on the taxable profits generated within a certain financial year. You should note that some deductions are considered when calculating this tax to help reduce the burden of expenses a company gets to pay for in a year.

Seychelles, however, provides tax benefits to foreign investors, and IBCs pay zero percent corporate tax. They are also exempted from withholding tax on dividends.

The VAT rate in Seychelles stands at 15%, and it is imposed on most goods and services consumed in the country. This tax is usually a consumption charge paid by the final consumers. VAT on imports is charged at the point of entry.

All individual and business taxpayers registered to pay VAT must collect this tax on all sales and submit it to the Seychelles Revenue Commission when it comes to domestic supplies. These taxpayers are entitled to reduce their tax burden by deducting the VAT paid on their purchases from the VAT received from the sales and remitting the difference to the SRC.

If you are registered as a VAT taxpayer, you need to submit your VAT return, also known as a VAT declaration. This is done monthly for mandatorily registered businesses and every three months for voluntarily registered companies. The declaration must be made within 21 days after the end of the taxable period, that is, one month or three months, respectively. Some penalties may apply for late declaration.

After setting up your company, you will only be required to make an annual renewable payment of 150 USD, including ISCP tax. Failure to make your yearly payments will result in penalties. A penalty fee of 10% is usually imposed within 90 days of your late annual fee payment. If you do not pay for more than 90 days, a 50% fee will apply.

You might want to close your company for whatever reason, which comes with a cost. If you manage to initiate the dissolution process before the due date, you will not be required to pay the annual fees. The dissolution fee is approximately 600 USD, including a 100USD government fee. Suppose you are using a different agent from the initial one. In that case, you will need to pay about 250USD for a company search from the registry file.

A final tax of 15% is normally levied on dividends paid to non-residents. Tax deductions on dividends are not supposed to be higher than 20% of the income generated. People are, however, not liable to claim deductions resulting from other expenditures like commission or salary.

The payer pays the dividend tax rather than the payee as a withholding tax. This tax must be remitted to the SRC within 21 years after the time in which the tax was supposed to be withheld.

Different banks charge different rates for opening an account. For banks such as Seychelles Bank and other corporate banks, you will be required to make an initial deposit of 25,000 USD. If a company does not maintain this minimum balance, the bank might charge more fees.

When opening an account with this bank, you will only be charged a service fee of approximately 500 USD. However, this fee depends on the registered agent you are working with when opening the bank account.

In Seychelles, a financial year ends on December 31, every year. However, some companies can apply for a different financial year period as long as it remains 12 months. Companies must pay their business tax as they go to instalments (PAYG), and so is the withholding tax. In both cases, the payment is made within 21 days after the due date.

A tax return must be submitted by March 31st following the end of the financial year, along with the signed-off accounts. VAT return must be submitted within 21 days following the end of the due dates. Since the government allows self-assessment for taxation, no extra fee is charged except the usual accounting cost either paid to employees or external finance experts.

Fees for auditing in Seychelles normally differ depending on the type of professional you hire. If you are living abroad and would like a local auditor, you’ll have to seek the services of local agents. Local agents will charge you upwards of 575 USD. However, although international businesses in Seychelles need to maintain their financial records, auditing is not required.

While your business taxes can be filed by a professional, there’s no fixed rate for filing such tax returns. Some professionals charge hourly, while others will charge you for each return filed. Different returns are charged differently since there is no fixed price. In fact, most businesses will just maintain a finance department in the company to carry out self-assessment for tax purposes and file returns as well. IBCs are not required to file returns in the country.

It is not necessary to have a business partner in Seychelles unless you want to set up a limited partnership form of business. Limited partnership businesses are quite profitable if you want to do business outside the country. In Seychelles, you are free to have a resident or a non-resident as your business partner, should you decide to get one. The shareholder and director of an offshore company can either be resident or non-resident. It is all up to you.

You don’t need to go to Seychelles to set up a bank account. Several agents can help you set up a company and open a bank account in the country without you having to set foot there. Some banks, however, may require you to be physically present for you to open some business accounts — for instance, the HNWI accounts.

Different taxes have different time frames for filing. Taxable income is normally made per the previous year’s accounting records. A tax year ordinarily comes to close on 31st December. PAYG instalments are usually made on the 21st of every month. The SRC usually gives a grace period of three months after each tax year for companies to deliver their Tax Returns.

Many banks require businesses to pay different monthly fees to maintain their accounts. These fees differ from one bank to another, although many banks charge a monthly fee ranging from $10-$20. If a business does not maintain a minimum balance, a fee of approximately $50 per month is changeable, depending on the bank. Most banks will also charge an offshore bank remediation fee of around $100.

VAT isn’t ordinarily included in an organization’s turnover outside the country. Therefore, it is always important to note where your goods and services will be consumed to ascertain if VAT will apply.

When it comes to exports, the supply comes from Seychelles, and VAT applies, although the goods are consumed elsewhere. However, the final VAT tax will still be zero since the VAT rate for exports stands at 0%.

As long as the supply region for the items remains to be Seychelles, then one must declare VAT tax even if the amount is zero. VAT on imports is calculated at the entry. It will be difficult to claim the VAT refund for the VAT paid on purchases against these sales outside the country without calculating VAT on exports. So, yes, a declaration is required.