The Benefits of Opening an Offshore Company in Seychelles
If you are looking to extend the roots of your company, an offshore company in Seychelles can offer great possibilities for you. It provides benefits that cannot be matched by a regular company. An essential fact that you should consider before establishing an offshore company is the location that will benefit your company. Where else is best suited for your foreign company other than Seychelles.
Seychelles is a series of islands located in the western part of the Indian Ocean. The country is well known for commercial fishery and international tourism.
Ever since 1994, when the International Business Companies Act was introduced, the offshore financial and corporate sector has rapidly grown to a competitive industry in the country.
It has also seen the sector plays a significant role in the Seychelles Economy. Why is it essential to own an offshore company in Seychelles?
It is because, in Seychelles, you get to enjoy 0% taxation.
As if that is not enough, there are no paid-up capital and no auditing requirements. These factors have enabled Seychelles’ companies to be extensively used in international business.
Why is it good to have an offshore company in Seychelles?
As earlier stipulated, Seychelles is the ideal location for an offshore company. Below, I have compiled some of the benefits of starting your offshore company in Seychelles.
These benefits include:
- Privacy and Protection are guaranteed
- Low corporate and legal requirements
- A perfect tax-neutral location
- Banking Infrastructure is well established in this country
- Easy and friendly legal system
- In Seychelles, there are no corporate tax liabilities
- Assets are well protected
- You can avoid capital gains tax
- 0% taxation
- You can gain access to tax treaties
- Easy to set up
- Access new markets and Globalization
- Improve lifestyle
Offshore Company in Seychelles Privacy and Protection is guaranteed
The issue of privacy and Protection has been a debate for decades now. Often people mistake privacy for mischief or illegal business.
I, for one, believe that privacy is not all about hiding money or a way to cover your dealings.
Additionally, I also agree that financial privacy and safety is an issue of at most importance. It may be that in your country, your operations or financial security are not guaranteed.
Establishing an offshore company in Seychelles can be a perfect way of adding a protective layer over your operations.
Why am I of the idea that you should establish your offshore company in Seychelles?
It is because of the no information-sharing agreements and secrecy provisions protected by the law, which ensures that your operations or finances protection is guaranteed in this country.
Low legal requirements
If you have always wanted to own property in Seychelles, starting an offshore company here is also another way of meeting the legal requirements; that is as a subsidiary.
And yes, that is a genuine reason for starting an offshore company.
Although, in most cases, it is more advantageous to own property in your name, owning property through corporate structures in Seychelles can be more beneficial due to the country’s tax structure.
The reason is that the tax structure in Seychelles is more favorable to ownership through offshore companies.
These provisions in Seychelles’ tax system are aimed at bringing more corporate structures into the country, which will, in turn, help develop the country and grow the economy.
It means that by opening an office in Seychelles, you can set up a Seychelles company and purchase property in Seychelles as well.
A perfect tax-neutral location
For instance, if a few individuals from different locations fund your company, you may need to invest your funds in a tax-neutral location.
Where else to combine the capital from different sources and invest other than Seychelles.
By capitalizing your investment funds in Seychelles, your funds will access different investments that are unavailable in your country, as they will not have to deal with tax, exchange commission, and security.
Easy and friendly legal systems
In most countries, and maybe including your country, setting and running a company can sometimes be extremely inefficient and bureaucratic due to the legal framework.
In such cases, moving money around tends to become difficult. Therefore opening an offshore company is a better alternative. Setting and running an offshore company in Seychelles can be of benefit as the legal systems are much friendly and efficient here.
Due to the good legal framework in Seychelles, you get to enjoy better legal architecture, gain better operation efficiency, and you get to access better courts.
I believe starting an offshore account in Seychelles will solve most of your legal issues if not all.
Banking infrastructure is well established
When you think of starting an offshore company in some countries, I know that the banking systems in those countries are one of your major concerns.
I also believe that these concerns are correctly placed, as most of these small jurisdictions have more limited banking opportunities.
However, vice versa can also be true. In other places like Seychelles, the banking infrastructure is much developed than most in most nations. In addition to 0% taxation, you get to enjoy better banking infrastructure in Seychelles.
I know for you (investors), that alone (better banking infrastructure) is enough.
Your asset is well protected
I believe that this is the most significant concern raised by most investors. Protecting your assets is very important for the success of any business.
Starting an offshore company can be one way of protecting your assets from ex-spouses, family members, plaintiffs, creditors, attorneys, among others.
In such cases, most people tend to start an offshore foundation or trust. However, starting an offshore company is more beneficial as you get more asset protection.
With that in mind, setting up an offshore corporation in Seychelles is something that should be at the top of your priorities.
Why do I say that?
For one, before someone sues you, they must first place a bond (which happens to be a significant amount).
Unlike other countries whereby lawsuits are out of control and are often filled almost every second of the day, in Seychelles, you at least get you to enjoy peace of mind.
Additionally, due to the stable political environment in Seychelles, you can rest assured that your assets are well-protected.
You can avoid capital gains tax
As we all know, different capital gains tax laws apply to different countries. It may be that in your country, you are not able to avoid capital gains tax. So if that is the case, Seychelles is the ideal place for you to start your offshore company.
In Seychelles, there are structures like indirect transfer of assets that allow you to avoid capital gains. These structures are legally available for companies in Seychelles.
Enjoy 0% taxation rates
In my opinion, I largely differ with those who argue that looking for a lower tax rate is wrong.
What makes me advocate for lower taxation is not only because it is beneficial to me, but also because I believe that there is a reason as to why some of these countries offer reduced tax rates.
The main reason why these developing countries offer reduced tax rates; I believe it is to fuel development and grow their economy.
For instance, in Seychelles, you get to enjoy 0% taxation. In Seychelles, I believe, is a perfect place for one to start an offshore company. To avert war and other forms of crisis, the Seychelles government attracts wealth and businesses by offering a 0% taxation rate.
It helps in growing their economy and develop their country more than they could ever do by overtaxing their citizens. In all sense, I do not see why such a country should be denied of investment.
However, it is also good to understand that there are rules that apply to transfer pricing. Although there are rules, it does not necessarily mean that you cannot start your offshore company to get a more competitive tax rate.
You gain access to tax treaties
In Seychelles, tax treaties exist for some corporate structures. Although I do not have access to tax treaties as much as I would like to due to my line of work, it is my understanding that it is a possibility for some businesses. I also believe that these tax treaties do exist for a reason and are aimed at benefiting corporate structures.
Offshore Company in Seychelles Easy to set up
Starting an offshore corporation in Seychelles is particularly an easy and quick process due to the many incentives that have been set up by the government. The presence of Special Economic Zones (SEZ’s) has aided fast-track corporations to set up their presence in this country.
What do these SEZ’s help with?
These Special Economic Zones help with work permits, payment gateway, offshore hosting, office space, business licensing, among other uses.
Access to new markets and Globalization
Connected by technology and driven by international investment and trade, structured offshore business is quickly gaining more opportunities due to Globalization.
By thinking globally, you can grow your company. Also, the country is strategically located. That is, it is a stepping stone into Africa businesswise.
Additionally, it is located midway between the largest manufacturing and trading blocks of Europe and Asia.
These in itself allows you to expand the reach of your business and also give you access to new markets. Expanding from an offshore company in Seychelles is a great way to gain new markets and grow your business.
The Seychelles government, private businesses, and local agencies support and encourage emerging corporations with subsidies and other incentives for offshore corporations who are willing to invest locally.
In a survey that was conducted by HSBC, the outcomes showed that fewer working hours and shorter commutes result to a healthier balance between life and work.
By that, I mean, leaving in an exotic location like Seychelles can be both fulfilling and exciting. Besides, the quality of life is better there, and environmental standards are high.
Studies have indicated that experts travel more and are also more adventurous. It means that they like exploring new experiences and cultures. That means that in an exotic place like Seychelles, you are more likely to meet like-minded people from all over the world.
Above I have mentioned some of the major benefits of why Seychelles is the ideal location for you to start your offshore company. Also, some other reasons can make you consider moving your business to Seychelles.
These reasons include;
In most cases, sole traders and domestic corporations are affected extensively by excessive regulations. Additionally, to comply with countless restrictions, lots of human resources and large amounts of money are diverted from productive processes.
Offshore jurisdictions like Seychelles have transparent regulations, and that is business-friendly. It makes Seychelles a perfect location to run all types of businesses, including online businesses and e-commerce.
Besides, unlike your country, Seychelles has an auspicious economic environment that reduces to bare bones the running of your company.
From my experience, I believe that corporations and individuals as well can largely benefit from starting and running an offshore corporation in Seychelles.
To pave the way for an easy running as well as remove obstacles from your way, you should consider starting your offshore company in Seychelles.
Stable political environment
Sometimes countries can go to war; this means that safety in your domestic country is not guaranteed. Additionally, the world is constantly changing, and politicians come and go; therefore, economic and political stability is not guaranteed.
With that in mind, the safety of your assets should be at the core of your mind.
Also, it may not only be due to political issues since other factors come into play and can lead to oppression or confiscation of your property. These additional factors include religion, ethnicity, or economic groups.
Starting an offshore corporation in places with a stable political environment can add that protective shield on your assets.
Expanding your business or changing the location of your company
Incorporating an offshore company in a place like Seychelles can be your breakthrough. That is if your company is not located in the ideal location.
Also, if you are a small business incorporating your company in Seychelles could be your answer.
Furthermore, the idea of having your business being located overseas is a seller and also a great boost to your business.
Minimum paperwork and accountancy keeping
In Seychelles, you are not obligated to give audited financial accounts or reports. It means that auditing and accounting are kept to a minimum. Besides, the extra time saved enables you to focus on growing your company.
Flexible options and easy to manage
For instance, for commonly used types of companies like the IBC, they can be used to serve more than a few international business purposes.
Unlike the situation in most countries, you are not obliged to hold your stakeholder’s meetings in Seychelles.
This aspect makes it particularly easy to make corporate decisions.
Offshore company registration in Seychelles
To register a company in Seychelles, it will take you between 1 to 2 days. This registration features your company’s registration and application for a bank account.
Below I have prepared some blueprints to help you in your offshore company registration in Seychelles.
Type of company
International Business Company (IBC) is the most common type of offshore company in Seychelles.
Under Seychelles law, the companies are controlled under the IBC ACT of 2016 (opens new window).
Additionally, these companies are governed by an authority known as FSA (opens new window) (Financial Service Authority).
Although I had earlier stated that no account filling is required (indeed, accounting filling is not needed), however, the company is required to keep documents such as receipts, invoices, and other recording documents in accordance with Section 174 (1) of the IBV Act, 2016.
These are meant to enable the company to prepare its accounts.
Protection of privacy is guaranteed under the Seychelles constitution Art. 20 (opens new window).
Any data that is detained by the Seychelles registered agent should not be released to the public as it is not public information.
Of course, any Seychelles IBC is not subject to any form of taxation and withholding taxes and is thereby exempted.
Offshore company in Seychelles: Legislation
BVI modeled; the Modern offshore legislation
To create an offshore account in Seychelles, you will need these documents:
A certified copy of the identification card or your valid passport.
Proof of domicile.
It is important to note that the proof of domicile that is required should be dated less than three months before the application for registration
International Business Company Characteristics of an IBC
As previously indicated, the International Business Company is the most common form of business used in Seychelles.
It is because it has an adaptable business structure. Nevertheless, as versatile as it is, just like any other form of business, it is subject to some regulations.
I have compiled several important regulations the IBC is required to comply with. They include;
- Operations are limited in Seychelles. These types of companies cannot own real estate in the country. In addition to that, these types of companies cannot engage in any form of business in Seychelles
- Licenses are mandatory. Some of the activities, like insurance or banking, cannot be performed without a license. A special license is needed for such activities
- IBC is allowed to own an asset. I know that statement contradicted what I had stated earlier. Although IBC is allowed to real estate in the country, the IBC is permitted to own other forms of assets registered in Seychelles. These assets can include vessels and aircraft.
The IBC is allowed to keep its records and books in the country. Additionally, it is allowed to have a bank account and make deposits in Seychelles. Speaking in terms of conducting business within the country, the IBC is not allowed to carry out any form of business engagements.
Nonetheless, the IBC is allowed to maintain a professional relationship with local trust companies, accountants, attorneys, investment advisors, management companies, among others.
Also, the IBC is permitted to hold a share or other forms of securities in a domestic company or other IBC in Seychelles.
Requirements for the IBC
The IBC is required to meet some regulations which include;
- The IBC is expected to file the Registrar of directors with the relevant authorities. However, the information given is not for public use.
- Director, shareholder and secretary services are allowed in Seychelles. These services are pretty common, and most investors choose to keep this service for privacy purposes.
- A general $ 100 fee applies. All of the parties interested in forming the IBC in Seychelles are subject to paying a mandatory Government license fees. This fee is paid during the registration of the company and every year afterward.
- A unique name is needed when starting this type of business in Seychelles. Additionally, the name should feature the short form of the business type at the ending.
- Although the IBC is not subject to taxes and does not need to comply with annual reporting and accounting requirements, they are however expected to comply with a few record-keeping and management requirements.
- The International Business Act only regulates the formation of these forms of business.
The International Business Company (IBC) is a beneficial business structure and also an appropriate form of a legal entity that is well suited for engaging in international company activities.
Generally, in my opinion, an offshore company in Seychelles is best suited for;
- Consultants or counselors
- Commerce over the internet
- Well suited for inheritance purposes
- Best for the real estate custody
- Also well suited for holding intellectual property rights
Armored with the above information, we can now agree that Seychelles is the ideal move for your business if you are considering starting an offshore company.
Although the registration process is quite simple, through my experience, I would best advise you to seek an experienced law firm to help you set up the organization properly.
The essence of the law firm is to help you create and start running your company fast enough so that you can start reaping the benefits of the corporation as soon as possible.