By Shona Hastings, 19.10.2021
Seychelles gained its independence in 1976 and is now officially known as the Republic of Seychelles. The economy in Seychelles has steadily grown over the years solidifying its reputation as a major financial hub within Africa. The Republic of Seychelles has become a popular and attractive location for offshore incorporation. Following recent criticism, Seychelles enacted the International Business Companies (Amendment) Act 2021 to rebuild its reputation and remind foreign entrepreneurs of the benefits of incorporating a company in Seychelles.
Recent Company Changes in Seychelles
Seychelles suffered a blow following the publication of the 2020 Global Forum Report by the OECD. The assessment resulted in the Seychelles ranking dropping from ‘largely compliant’ to ‘partially compliant’. Following the downgrade, the EU inevitably placed Seychelles on its list of ‘non-cooperative countries’.
On 6th August 2021, the International Business Companies (Amendment) Act was enacted in Seychelles. The Act proposed several amendments aimed at improving the supervisory role of the Financial Services Authority (FSA) over businesses registered in Seychelles. The amendments also take into consideration the recommendations made in the Global Forum report.
The International Business Companies (IBC) Act introduced the following requirements for international companies registered in Seychelles.
Please Note: This is not an exhaustive list and does not hinder the ability of IBCs to operate within Seychelles.
- Company Name Endings – Section 25(1) is to be amended to extend permitted company name endings to include: “Limited Liability Company” or “LLC” or “Company” or “Co” (as well as the currently permitted name endings under the current law including “Limited” or “Ltd”, “Corporation” or “Co” “Incorporated” or “Inc”).
- Unique Company Names – Section 26(A) is to be amended to prevent an international business from having the same business name as a local company.
- Company Director Consent – In accordance with global corporate law norms, section 134 has been amended to introduce a requirement that a person shall not be appointed as a director of a company unless the person has consented in writing to being a director
- Accounting Records to be held in Seychelles – Section 175 of the principal Act is amended in the case of (a) a holding company; and (b) not a large company, to keep its accounting record on a bi-annual basis it’s accounting records at the company’s registered office in Seychelles.
- Financial Records may be inspected by the SFA – Seychelle’s IBC’s and registered entities under the act are required to retain their financial records at their registered office in the jurisdiction to allow for inspections by FSA.
- Business Financial Year should reflect the calendar year – The financial year of a company will be the calendar year unless it is changed by a resolution of directors and notified to the company’s registered agent within 14 days of the passing of the resolution.
- Retention of past Contracts and Dealings – Under Section 169 (a) companies are now required to preserve information about all their dealings for no less than 7 years from the date the transaction was completed, even if the company is dissolved or struck off.
- Restore a Dissolved Company – Section 276 of the Act has been amended to extend the Registrar’s power to restore a dissolved company rather than a court restoration except where the company has been struck off or has been used for fraudulent purposes to protect the reputation of Seychelles.
The Benefits of Incorporating a Company in Seychelles
1. Straightforward and Simple Process
Company formation in Seychelles is a straightforward and simple process. International Business Companies typically only take 24 hours to incorporate, English is the primary language and there is no minimum or maximum capital requirements for a company in Seychelles.
2. Confidentiality and Privacy are a top priority
Safeguarding your personal information can be an area of concern when setting up a business internationally. In Seychelles, your privacy is protected by law and the only information kept on public record is the identity and personal information of the initial director. Information is also not shared with external organizations and countries as Seychelles is an independent jurisdiction.
3. The Tax System
One major benefit to incorporating a company in Seychelles is its fair tax system. In Seychelles, profits are only taxed if they are derived from a source in Seychelles and any income earned outside the country is not subject to taxation. They also employ a zero-tax approach on capital gains, interest, and stamp duties on business transactions.
4. Only One Director and One Shareholder is Required
Seychelles is a flexible location when it comes to structuring a new business. Only one director and one shareholder are required for international businesses formation and the director can be the sole shareholder (one person). Shareholders and directors of international business companies can be of any nationality and residents of any country.
For more information on incorporating a company in Seychelles or to find out more on how the International Business Companies (Amendment) Act 2021 impacts your international business company, please give us a call on +353 1 6461627.