United Arab Emirates: Business Setup In Seychelles

Last Updated: 9 September 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, September 2018

SEYCHELLES OFFSHORE COMPANY FORMATION

Established in the warm cerulean waters of the Indian Ocean safely outside the cyclone belt, Seychelles is a standout amongst the perfect environment. With 115 islands scattered in more than 1.4 million square kilometers of warm clear waters, Seychelles offers a consistently extending kaleidoscope of encounters to the guest looking for quality and variety. From sculptures to untouched forests and private resorts, tourists get spoiled due to the easy availability of island benefits. The islands of Seychelles have more to offers apart from its extraordinary beauty, that is to establish an International Business offshore company (IBC or Offshore Company).

Seychelles IBC is the most famous and flexible kind of offshore company available to foreign investors in the country. Similar to other offshore companies, IBC of Seychelles has the objective to encourage foreign investment and to enhance the commercial market. Being an IBC, it has the minimum formalities of documentation and procedures.

Seychelles IBC is as similar as other International business company around the world. The introduction of the Seychelles International Business Companies Act, 2016 (IBC Act) which replaced the previous Seychelles International Business Companies Act of 1994 has invited numerous foreign investors to incorporate their businesses in Seychelles. According to IBC registers, around 150,000 (one hundred and fifty thousand) companies have registered their business in IBC, with an average of 600 (six hundred) companies establishing business every month.

ADVANTAGES OF SEYCHELLES IBC

I. Tax Exemptions

According to the IBC Act, Article 361, Seychelles IBC is free from paying any tax on income and profits of the company. Apart from this, Offshore Companies does not have to submit stamp duties on any business transaction, especially in property transfers or any transfers concerning shares, debts or any securities. Although the companies registered in Seychelles IBC are free from paying tax, however, the companies should oblige with minimal requirements as follows:

  • Companies are restricted to pursue business outside the territory of IBC;
  • Companies cannot own properties in Seychelles;
  • Companies willing to undertake banking and insurance activities must obtain a relevant license;
  • Companies cannot conduct operations in regards to securities;
  • Companies are strictly not allowed from carrying out gambling activities;

Regardless of the restrictions mentioned above, Offshore Companies can still engage themselves in the following activities:

  • Companies can have Seychelles local bank accounts and can accept deposits;
  • Companies are allowed to maintain book-keeping;
  • Companies can hold shares and securities in another IBC company in Seychelles;
  • Companies can register vessel and aircraft in their name;
  • Seychelles residents can also open an IBC company.

II. Timelines for incorporation

Compared to schedules for incorporating a company of other countries, Seychelles has the best services by providing license within 24 hours, subject to the relevant documents submitted on time.

III. Government licensing

Seychelles IBC's seek a minimum fee of USD 100 for government registration, irrespective of the paid-up capital amount, which is in comparison with IBCs in other countries is the cheapest.

IV. Confiscation provisions

Another essential advantage of establishing an Offshore Company is special confiscation provisions. The requirements for the confiscation of any shares or others interest in IBC by any foreign governmental authority states that the company can file an application with Seychelles court and can obtain a decision ordering the company to release the rights of shareholders.

V. Personal Information

Seychelles IBC authority does not share any personal details or identities of the shareholders, directors or any beneficial owners of the company to safeguard the particular interest of the members. Also, new IBC companies are not required to submit any data with regards to identities of the shareholder. Companies have to offer MOA (Memorandum of Association) and AOA (Articles of Association) with no disclosure of shareholders information.

The government authorities, however, in insufficient circumstances can ask for personal information of the shareholders. Authorities can only request specific information if the disclosure is a part of an ongoing investigation of the Offshore Company.

VI. Paid-up capital requirements

Offshore Companies are not mandated to have a minimum paid-up capital for registering their business. Also, companies are free to mention any amount about the wealth in relevant company's documents. Additionally, owners can provide details about the money at the time of registration.

CORPORATE STRUCTURE

Offshore Companies in Seychelles has a flexible organizational structure with exclusive features as follows:

  1. The IBC companies will have a legal personality and will have powers as a natural person;
  2. Entities must satisfy the requirement of a minimum number of shareholders and directors: in this case one shareholder and 1 director who can be the same person;
  3. There is no interference of the local director is required. Thus, foreign shareholders can hold 100% shareholding in the company;
  4. Companies can have corporate or individual shareholders;
  5. There is a requirement for regular Annual General Meeting;
  6. Directors of the company have the right to vote through proxy;
  7. Companies can at their discretion make amendments to their corporate structure.

COMPLIANCE REQUISITES

  1. IBCs in Seychelles are obliged to maintain registers for shares, directors, owners;
  2. The company must keep the records of the complete information of the company at the registered office of the company;
  3. If the company's documents are not present at the registered office, the board of directors must pass a resolution stating the place where the company retains the registers;
  4. The company must keep accounting records which should indicate the assets and liabilities of the company;
  5. There is no mandate for an organization to submit accounting records to the registrar or any other government authority;
  6. The company is not required to maintain an auditor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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