History of Seychelles
The Republic of Seychelles consists of 155 islands, with a main island called Mahé. The Republic is located in the Indian Ocean, near Africa. A British colony since 1814, the country became independent in 1976 but remains a member of the Commonwealth. The main economic strengths of Seychelles are tuna fishing and tourism.
The Seychelles as an Offshore Centre
The Seychelles is a popular offshore centre although it remains a problematic location for doing business in Europe. Offshore activity is regulated by the Seychelles International Business Authority and must comply with the International Business Companies Act and Seychelles’s Company Law.
The Seychelles has six major banks as well as credit agents and foreign exchange providers. Only two of these banks hold a licence to service offshore companies.
Vessel registration is regulated by the Merchant Shipping Act.
There are three types of offshore companies:
· International Business Companies (IBCs). This is the most widely used offshore structure in Seychelles and is a company limited by shares. IBCs impose no restrictions on the nationality of company directors and have no minimum capital requirement. IBC’s cannot trade in Seychelles and nor can they own Seychelles property (though local property such as office space can be leased if required). IBCs are also prohibited from doing business with other Seychelles companies except in certain specific cases relevant to the formation and operation of the company (such as the engagement of lawyers, accountants, etc.). Seychelles IBCs may also hold shares in other Seychelles companies or hold Seychelles flagged ships. Government fees for the formation of an IBC are USD $100 up to maximum capital of USD $100,000. The annual government fee is also USD $100.
· Special License Companies (CSL). These companies are governed by the Seychelles Companies Act of 2003. This type of offshore company may conduct business both inside and outside of Seychelles.
· Seychelles Limited Partnership (LP). These are governed by the Limited Partnership Act of 2003 and may be used to easily receive and distribute income.
Seychelles is recommended as an offshore location for clients based in, or trading with, Asia, India and Africa but is not recommend for European clients or clients trading in Europe. It can be problematic to invoice between Seychelles and European companies and many tax authorities apply a withholding tax of at least 30% to payments to Seychelles. It is therefore possible that in event of a tax investigation European clients could be penalized and for this reason most European companies prefer not to deal with this territory.