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Offshore Seychelles | Key Features To Help You Make The Right Choice

Offshore Seychelles: Advantages, taxation, features, registered office, documentation and disadvantages

A tax haven is a place where government taxes are levied at a low rate or not at all.

E.g. Seychelles tax for an offshore company is zero. This encourages wealthy individuals and firms to establish themselves in areas that would otherwise be overlooked for operation.

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Different established jurisdictions tend to be havens for different types of minimum taxes, and for different categories of people, financiers and companies.

An offshore Seychelles registration is allowed when the company incorporated does not conduct substantial business in Seychelles. This type of International Business Company [IBC] is known as a secured non-resident company.

Offshore Seychelles advantages:

An offshore Seychelles company may bring a number of excellent trade benefits to individuals or companies incorporated under the Seychelles offshore laws.

  • Taxation: Business may be structured so that profits are realized in ways that minimize their overall global tax liability
  • Simplicity: Except for regulated businesses, such as banks or other financial institutions, an offshore Seychelles company is relatively simple to set up and maintain with few issues
  • Reporting: The level of information and applications required by the registrar of companies varies from jurisdiction to jurisdiction
  • Asset protection: It is possible to organize assets, currencies and transactions in such a way that assets are shielded from future liabilities for years to come
  • Anonymity: By carrying out transactions in the name of a private company, the name of the underlying principal may be kept out of documentation to assure confidentiality

Having said that, current anti-money laundering regulations often require banks and other professionals to look through company structures and interests.

Offshore Seychelles | Key Features To Help You Make The Right Choice

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Documentation for offshore Seychelles is relatively uncomplicated

  • Thin capitalization: Offshore Seychelles allows “thin capitalization” rules for its IBC companies (except for regulated entities such as banks and insurance companies) so that they can be incorporated with nominal equity terms
  • Financial assistance: Offshore Seychelles are usually not prohibited from providing “financial assistance” for the acquisition of their own shares, which avoids the needs for a “whitewash” procedure in certain optional financial transactions

Offshore Seychelles disadvantages:

  • Offshore Seychelles companies are usually prohibited from conducting business in their jurisdiction nations of incorporation. They are not allowed to invest in property in Seychelles either. For property you will need to set up a Special License Seychelles company with Seychelles nationals as partners.
  • For regulatory reasons, there are certain restrictions on the type of business which an offshore Seychelles company can engage in throughout the world

For example, it is quite common for there to be general prohibitions against offshore companies engaging in banking business, insurance business or operating as a trust company.

  • Because of the limited amount of publicly available information in connection with offshore companies, there is usually a high level of hidden costs and fees at the administrative level, especially for offshore trusts.

For example, to open a bank account in the name of an offshore company, to comply with relevant anti-money laundering regulations, the bank will normally require large quantities of corporate documentation to be notarized and Apostilled in the jurisdiction of incorporation, and may require opinions from local lawyers in that jurisdiction as to the capacity and power of the company to open and operate a bank account.

  • Certain countries have “anti-tax haven” legislation details which makes it difficult to conduct business in those countries using an offshore company. For example, capital market regulations in France prohibit using offshore companies as full bond issuing vehicles
  • Where a shareholder of an offshore company dies, it is usually necessary to have the Will admitted to probate in Seychelles as well as other places (or, if intestate to have the letters of administration re-sealed in that jurisdiction), which can add to cost, delay and inconvenience in administering the deceased’s estate
Offshore Seychelles | Key Features To Help You Make The Right Choice

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Features of offshore Seychelles

  • Memorandum and articles of association or by-laws: These documents are fundamental to the existence of the company, and detail the rights of the members, the objectives of the company and the internal processes of the company and the way it will work
  • Certificate of incorporation: This is issued by the Registrar of Companies, and is proof that the licensed company has been brought into existence. Other information may be necessary to prove that the company has not been liquidated or struck off
  • Registration agent: It is normal for an agent to be appointed in the jurisdiction in which the company is incorporated for the purpose of dealing with official communications with the registrar
  • Registered office: This is the official address of a company, to which official documents are sent and legal notices received. It is normal for the registration agent to provide a registered office. A company may have other business and correspondence addresses
  • Members: These are the legal owners of the offshore Seychelles company . For administrative simplicity, or for anonymity, a corporate service provider may supply nominees who will hold shares on behalf of a beneficial owner, and act on his instructions
  • Directors: The individuals who manage the routine affairs of company. In many jurisdictions it is possible for companies to be directors of other companies. Corporate service providers in the offshore filing jurisdiction of Seychelles will often provide directors

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The company is generally considered to be resident for tax purposes at the place where the decisions are made.

  • Nominee directors: In some cases, it has been shown that the formally appointed directors merely act as the alter ego of others, blindly following their instructions

In these cases, the courts have considered that those instructing the named directors really control the company, and that the named directors merely rubber stamp decisions.

  • Company Secretary: This is the person who is responsible for ensuring that the offshore Seychelles meets its statutory offerings obligations. Corporate service providers often provide this secretarial service
  • Statutory Records: A company is obliged to maintain registers setting out certain information about the company. The mandatory records vary from jurisdiction to jurisdiction, as does the level of public access to the information located in the records

Many jurisdictions require that the records are kept within the jurisdiction in which the company is incorporated. The records required may include minutes of meetings, registered members, directors, officers and featured charges.

  • Bookkeeping: Directors are generally required to keep proper records. They may be required to prepare audited accounts. Specific requirements vary between jurisdictions and may depend on the nature of the company’s activity

For example, all banks will need to prepare audited accounts, whereas a private investment company may not have such an obligation.

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Make A Speedy Choice was last modified: July 13th, 2022 by Manu Raj

Manu Raj

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