Steps to Create a Company in the Seychelles

Establishing a company in the Seychelles, particularly an International Business Company (IBC), is a relatively straightforward process. The jurisdiction is known for its favorable tax environment and minimal reporting requirements, making it a popular choice for offshore businesses. Here’s a detailed breakdown of the steps involved in the incorporation process.

1. Company Name Registration

Choosing a unique name is the first crucial step in setting up your company in the Seychelles. The name must adhere to specific regulations:

• Uniqueness: The chosen name must not be identical or similar to existing company names within the Seychelles registry.
• Restricted words: Names that imply government affiliation (such as “Seychelles” or “Government”) or include terms like “Bank” or “Insurance” are restricted without prior approval.
• Suffix: The company name must end with an appropriate suffix, such as “Ltd,” “Corp,” or “Inc,” indicating its legal structure.

To streamline the process, we offer name verification and reservation services. Once you’ve selected a suitable name, we will check its availability and reserve it to ensure it remains secure while the registration process is underway.

2. Legal Status and Registered Office

Every Seychelles company must have a registered office address within the jurisdiction. This address is essential for receiving official correspondence from the Seychelles Financial Services Authority (FSA) and other relevant bodies. If you don’t have a local office, we provide a domiciliation service, offering you a professional registered office address.

Additionally, the company must appoint a registered agent. This agent is responsible for managing legal documents and maintaining compliance with local corporate laws. We handle the appointment of the registered agent as part of our service package.

3. Information Required for Incorporation

To incorporate a company in Seychelles, specific details about shareholders and directors must be provided:

• Shareholders: A minimum of one shareholder is required, and they can be an individual or a corporate entity. There are no residency or nationality restrictions, allowing non-residents to be shareholders.
• Directors: Similarly, only one director is required, with no restrictions on nationality or residency. Directors are responsible for overseeing the management and legal compliance of the company.

You’ll need to submit the following documents:

• Personal identification: Copies of passports for shareholders and directors.
• Proof of address: A utility bill or other documents showing the current residential address of the shareholders and directors.

Our service simplifies the submission process by collecting all relevant information securely through our online platform.

4. Documents We Prepare and Submit

We handle the preparation and submission of all essential documents required for the formation of your Seychelles company, including:

• Memorandum and Articles of Association: These documents define the company’s purpose, structure, and governance. They outline the responsibilities of directors and shareholders and detail the company’s operating procedures.
• Certificate of Incorporation: Once the company is officially registered, the FSA will issue this certificate, which serves as legal proof of the company's existence in Seychelles.

5. Timeframe

The incorporation process in Seychelles is known for being fast and efficient. Typically, the process takes 24 to 72 hours from the submission of the complete documentation. The exact timeframe depends on the complexity of the application and the responsiveness of the applicant in providing the required information.

Once incorporated, the company can begin operations immediately, and we will ensure that all compliance requirements are met.

Taxation in the Seychelles

Setting up a company in the Seychelles provides numerous advantages, particularly in terms of taxation and compliance. The country is renowned for its tax-friendly regime, especially for International Business Companies (IBCs) and Special License Companies (CSLs). Below is an overview of the key tax-related aspects and financial obligations that entrepreneurs need to understand when forming a company in the Seychelles.

1. Tax Advantages of International Business Companies (IBCs)

An International Business Company (IBC) in the Seychelles is one of the most popular structures for international entrepreneurs. The main attraction of an IBC is the complete tax exemption on income derived outside of the Seychelles. This includes:

• No corporate tax: IBCs do not pay corporate income tax on profits earned outside of the Seychelles.
• No capital gains tax: There is no taxation on capital gains, which is highly beneficial for businesses involved in trading or investment activities.
• No withholding tax: IBCs are not subject to withholding tax on dividends, interest, or royalties paid to non-residents. This makes them attractive for holding companies or entities that deal with intellectual property management.

Despite these tax advantages, an IBC must maintain economic substance if it holds certain types of passive income, such as royalties or dividends from other jurisdictions. This is to ensure compliance with global anti-tax avoidance initiatives (OECD guidelines), ensuring the legitimacy of the company’s tax status.

IBCs are also not subject to VAT or stamp duties within Seychelles unless they carry out business within the country, making them a prime choice for offshore entities involved in international commerce.

2. Corporate Tax for Special License Companies (CSLs)

A Special License Company (CSL) in the Seychelles operates under a different tax structure. CSLs are eligible for certain tax concessions but are also subject to a 1.5% corporate tax rate on worldwide income. This lower rate is designed to make CSLs attractive to businesses that need access to Seychelles’ double tax treaties.

Unlike IBCs, CSLs can conduct business both locally and internationally, allowing them to benefit from Seychelles' Double Taxation Avoidance Agreements (DTAAs). This is a crucial advantage for companies that need to avoid double taxation on international transactions. CSLs can engage in various activities, including banking, insurance, and intellectual property management, but must adhere to additional regulatory requirements compared to IBCs.

While CSLs enjoy a preferential tax rate, they are required to file annual financial returns and may need to undergo audits based on the company’s size and financial activity.

3. Accounting and Reporting Requirements

• For IBCs: The reporting obligations for IBCs are relatively straightforward. They are not required to file annual financial returns with the Seychelles authorities, though maintaining internal records of financial activities is highly recommended. However, IBCs must now keep accounting records in Seychelles, which need to be submitted bi-annually to their registered agent. While these records do not need to be filed publicly, they must be available for inspection if required by the authorities.
• For CSLs: CSLs face more stringent reporting requirements compared to IBCs. They are obliged to file annual accounts with the Seychelles authorities and must ensure these records comply with local accounting standards. Although audits are not mandatory for all CSLs, larger entities may be required to conduct external audits depending on their financial activity and turnover.

Failure to comply with accounting and reporting regulations can result in fines and penalties, so it's essential for both IBCs and CSLs to stay on top of their documentation and compliance obligations.

4. Value Added Tax (VAT)

Most offshore companies, including IBCs, are not subject to VAT in the Seychelles, as they typically do not engage in local business. However, if a company operates within Seychelles and reaches the VAT threshold (currently SCR 2 million in annual turnover), it must register for VAT. The standard VAT rate in the Seychelles is 15%, which applies to goods and services consumed locally.

For businesses operating in industries that engage with the local market, such as tourism or retail, it’s essential to ensure VAT compliance to avoid penalties.

Conclusion

Seychelles offers one of the most tax-efficient environments for companies looking to engage in international business. Whether choosing an IBC with its tax exemptions or a CSL with its low corporate tax and access to double tax treaties, entrepreneurs can benefit from a flexible and favorable tax regime. However, staying compliant with accounting and reporting obligations is crucial to avoid penalties. Working with an expert service provider can ensure your company remains fully compliant while maximizing the advantages of Seychelles' tax framework.

Director Responsibilities in the Seychelles

When establishing a company in the Seychelles, it’s important to understand the key legal responsibilities of company directors. The role comes with specific duties that ensure the company complies with both local and international regulations. Below is an overview of the main responsibilities and expectations for directors.

Duties of Directors

Directors in the Seychelles must act in the best interest of the company, maintaining a duty of good faith and loyalty. Their primary responsibility is to prioritize the company's interests over personal gain, ensuring the company operates within legal boundaries. Directors must:

• Ensure compliance with Seychelles' corporate laws and regulations, including financial reporting and business tax obligations.
• Exercise care and diligence in making informed business decisions.
• Prevent illegal activities, as any involvement in or oversight of unlawful business practices could expose the director to personal liability.

Directors of Special License Companies (CSLs) also have added responsibilities, such as ensuring that the company adheres to specific reporting requirements. CSLs, which benefit from certain tax advantages, must maintain proper financial records and file annual accounts, including undergoing audits if necessary, to maintain compliance with regulatory bodies like the Financial Services Authority (FSA).

Confidentiality

One of the significant benefits for directors in Seychelles is the strong confidentiality laws. According to the Seychelles International Business Companies (IBC) Act, details of a company's directors and shareholders are not publicly disclosed. These confidentiality provisions ensure that the identity of directors is protected unless disclosure is required by a court order, under anti-money laundering regulations, or with the authorization of a director or registered agent.

This high level of privacy is one of the reasons the Seychelles is a popular jurisdiction for offshore companies. However, while privacy is guaranteed, directors must still ensure that their companies comply with all financial and tax obligations locally.

Liability

Although Seychelles’ companies provide limited liability protection to their directors, this does not exempt them from personal liability if they engage in illegal practices, such as fraud or tax evasion. Directors must ensure that their companies comply with all legal requirements, particularly in industries subject to heavy regulation, such as finance or international trade. If directors fail to meet these obligations, they can be held personally accountable, potentially leading to fines, penalties, or other legal consequences.

For CSLs, failure to maintain proper accounting records and submit annual financial statements can result in penalties or the suspension of the company’s special license status. Additionally, companies that fail to meet their reporting obligations could face significant fines ranging from USD 5,000 to USD 10,000, depending on the nature of the breach.

VAT (Value Added Tax)

In the Seychelles, offshore companies such as IBCs are generally exempt from VAT on foreign-sourced income. However, if a company operates within Seychelles and its turnover exceeds a certain threshold, it may be required to register for VAT. The VAT rate in Seychelles is 15%. For CSLs, while some taxes apply, their tax rate on worldwide income is typically low, often around 1.5%. VAT registration and compliance are managed by the Seychelles Revenue Commission (SRC), and failure to register or comply with VAT obligations can lead to penalties.

In conclusion, while directors in the Seychelles enjoy significant privacy protections and limited liability, they must still fulfill important legal and financial duties. Working with a reliable registered agent or legal advisor is crucial to ensure that the company remains compliant with all local laws and reporting obligations.

Employment and Human Resources Management in the Seychelles

When setting up a company in the Seychelles, it is important to understand the local employment regulations and the process of managing both local and international talent. This section outlines the key considerations for employment contracts, labour regulations, and hiring expatriates.

1. Employment Contracts

In the Seychelles, all employees must have a legally binding employment contract, which can be in English or Creole. Contracts must clearly outline the terms and conditions of employment, including:

• Job Description: A clear definition of the employee’s role and responsibilities.
• Salary and Benefits: The agreed-upon wage and any benefits provided (such as health insurance, housing, etc.).
• Working Hours: Standard and overtime hours should be defined, in compliance with the local labour regulations.
• Leave Entitlements: Employees are entitled to specific holiday and sick leave entitlements, which must be outlined in the contract.
• Notice Period: The contract must specify the notice period required for termination or resignation, typically 14 days.

Contracts in the Seychelles provide a level of flexibility, allowing businesses to hire both local and international staff based on their needs. Employers must ensure that contracts meet the legal requirements established by the Seychelles Employment Act, which governs labour relations in the country.

2. Regulations

The Seychelles has a well-established legal framework for managing working hours, wages, and social security obligations.

• Working Hours: According to the Seychelles Employment Act, the maximum number of working hours per week is 52 hours, with a daily cap of 12 hours. Overtime is capped at 60 hours per month, and overtime pay varies depending on the day it is worked (1.5x for regular weekdays and 2x on public holidays).
  
• Minimum Wage: As of 2024, the minimum wage in Seychelles is 38.27 SCR per hour for most workers, and 44.10 SCR per hour for casual employees. Employers must comply with these rates to ensure fair compensation.
  
• Social Security: Employers are required to contribute 10% of the employee’s salary to the Seychelles National Provident Fund (SNPF) as social security. Employees contribute 3% of their wages​. These contributions are mandatory for all employees and help fund healthcare, pensions, and other social benefits.
  

3. Hiring Expatriates

Hiring international talent in the Seychelles involves navigating the local immigration system and obtaining the necessary permits. The most common visa for foreign workers is the Gainful Occupation Permit (GOP), which is issued by the Ministry of Employment and Social Affairs.

• Application Process: To hire expatriates, employers must first demonstrate that there are no local candidates available for the position. The job must be advertised locally before applying for a GOP for the foreign worker. Employers must submit the employee’s passport, proof of qualifications, and a job offer letter during the application process.
• Permit Duration: GOPs are typically issued for up to five years, but they must be renewed annually. Once the permit is granted, the employee can legally live and work in Seychelles. It's important to note that expatriates are not allowed to switch employers while holding a GOP without special permission from the Ministry.
  
• Compliance with Local Laws: Employers hiring expatriates must ensure compliance with Seychelles' labour laws, including wage and social security contributions. The process is straightforward, but companies should carefully manage timelines for permit renewals and other legal obligations.

By understanding the local employment laws and taking advantage of Seychelles’ flexible hiring environment, businesses can build a strong workforce that supports their growth objectives. We offer comprehensive assistance with preparing contracts, managing social security obligations, and navigating the expatriate hiring process, ensuring a smooth and compliant onboarding of both local and international staff.

Confidentiality and Privacy in the Seychelles

Seychelles is a preferred offshore jurisdiction for businesses due to its strict confidentiality and data protection laws. Here's how Seychelles protects the privacy of company owners and directors:

1. Confidentiality Protections

One of the main reasons Seychelles is chosen for company formation is the strong protection of confidentiality. Information regarding beneficial owners (those who own or control a company), as well as shareholders and directors, is not publicly disclosed. This information is only held by registered agents, ensuring that sensitive data remains protected. This enhanced confidentiality is a major attraction for businesses seeking privacy protection.

2. No Public Register of Beneficial Owners

Unlike some jurisdictions, Seychelles does not require a public register of beneficial owners. The information is kept in private records and is only accessible to competent authorities when legally necessary. This allows companies to operate discreetly, which is crucial for those seeking greater confidentiality in their corporate structures.

3. Nominee Services

To further enhance confidentiality, Seychelles allows the use of nominee services for both directors and shareholders. This protects the identity of the true owners while ensuring legal compliance for the company’s operations.

Seychelles combines a strong legal framework with advanced confidentiality services, offering a trusted environment for businesses seeking to operate discreetly while adhering to international standards. This ensures optimal protection for sensitive information in this reputable offshore financial center.