The Republic of Seychelles is a tax haven with a loyal tax climate, which is located in the southern part of the Indian ocean. The fiscal legislation of the island nation provides certain advantages for the organization of international commercial business solutions. The rules of the corporate law allow registration of the various business entities. Among the highly demanded entities there are:
- Limited liability companies;
- Companies with a special license (resident companies);
- International business companies.
Besides, the Seychelles offshore jurisdiction can be used with the purpose of registering aircrafts and ships.
Banking Sector of the Seychelles Offshore Jurisdiction
The Republic of Seychelles is considered to be a liberal fiscal state with a favourable tax climate. Such a political line has contributed to the attraction of the significant inflows of the foreign capital into the local economy. The inflow of the considerable financial assets, in its turn, has become a major incentive for the development of the banking sector. It must be noted that the banking system of Seychelles has been developing alongside with the national economy and fully meets the current requirements.
Today both state banking institutions and commercial, offshore banks are functioning on the territory of the country. The activities of all the banking institutions and other financial and credit organizations are controlled by the main financial regulator — the Central Bank of the Seychelles. The banking sector provides business with a full set of financial services on the international level, ranging from opening a bank account to online banking services.
The secrecy of information is the main characteristic of this jurisdiction, which is also applied to the banking sector. The banking secrecy is strictly protected and the confidential information about the account holders is never disclosed on the territory of the island nation.
Confidentiality and Data Protection
The government of the Republic of Seychelles has enshrined in legislation the principles of protection of the interests and assets of the beneficiaries of offshore and resident companies with foreign participation. All the data concerning the ultimate beneficiaries of the offshore companies is closed and is not subject to the public disclosure. The registers of shareholders and managers are kept by a local agent.
The state have not signed any bilateral international agreements on the exchange of information between fiscal authorities. Moreover, the tax authorities of the Seychelles do are not entitled to request an audit of offshore corporate entities. Shareholders and founders of the company have the right to decide where to store the accounting and other financial documentation. Only the international resident companies have to submit accounting annually.
Corporate Taxation in Seychelles
Speaking about the taxation system of the Republic of Seychelles, it must be noted that the international offshore companies are provided with the major tax benefits. Offshore entities are subject to a zero tax rate when the corporate tax is calculated. However, offshore companies are not allowed to conduct their economic or commercial activities on the domestic market.
Offshore companies must renew their registration annually by means of paying a state duty. Violation of this requirement can be fraught with a forced dissolution of an offshore company by the state. The renewal of the offshore company is possible only after the three years period. Besides, the burden of punitive state sanctions is imposed on the founders of an offshore company.
The amount of the state duty is relatively minimal and depends on the amount of the authorized capital of the offshore company. The minimum state charges and a simplified procedure of registering an offshore company make the Seychelles an attractive jurisdiction for the international business.
The international resident companies are taxed on a general basis in accordance with the fiscal legislation of the island nation. However, the certain categories of incomes, including dividends, royalties and financial interests are exempted from taxation. The advantages of a tax planning for such companies are backed by the availability of the double tax agreements. These agreements allow optimizing the taxable base at the international level.
Seychelles: the current state
Today the island nation of the Republic of Seychelles is an international offshore centre, which is well regulated by the government. An active reformation of the existing fiscal and corporate laws with the purpose of creating a favourable investment and tax climate has been conducting since 1995.
The competent policy of the state, which is based on the vast experience of international tax jurisdictions, makes the conditions favourable for attracting foreign financial assets into the local economy. The investments, which are directed into the country’s economy and the diversification of the economy, contribute to the development of the tourism and financial services sectors. It should be noted, that today all the major international banking groups, both commercial and offshore, are represented on the territory of the state.
The Specialized state authority has been created in order to regulate legal relations in the sphere of an offshore business and to ensure the efficient state support. Today the Republic of Seychelles possesses both a stable state system and a robust national economy.