Seychelles: Types of Company

On this Page:

- SEYCHELLES INTERNATIONAL BUSINESS COMPANY
- SEYCHELLES SPECIAL LICENCE COMPANY
- SEYCHELLES LIMITED PARTNERSHIP
- SEYCHELLES PROTECTED CELL COMPANY
- SEYCHELLES TRUSTS
- SEYCHELLES FOUNDATIONS

The vast majority of companies formed in the Seychelles for offshore purposes are incorporated under the International Business Companies Act 1994 (see below). However this law did not supersede the existing Companies Law 1972, which is based on English law and is used to form various types of company used by businesses trading in the Seychelles, and also for offshore businesses which are not permitted to use the IBC form, such as banks, insurance companies and mutual funds.

Companies formed under the Companies Act 1972 can be private companies limited by shares, by guarantee, or hybrid; or they can be unlimited, but that is rare. Public companies can also be formed under the Act. For all these types of company, Memorandum and Articles of Association must be filed at the Companies Registry, along with the registration fee.

Foreign companies can re-establish themselves in the Seychelles by way of continuation without the necessity for reciprocal arrangements in the original country of incorporation. An IBC wishing to leave the Seychelles may do so.

In 2003, the government legislated for additional types of company: Special Licence Companies, Protected Cell Companies and Limited Partnerships.

In 2009, Foundations were added to the Seychelles financial services offering.

In 2011, the government has been considering a new Companies Act which would unify and replace the existing “dual” system consisting of the Companies Act 1972 (the 72 Act) and the the International Business Companies Act 1994 (IBC Act). The proposed Act received much criticism and the government put forward an amended Act which is currently still under discussion.

According to a government White Paper on the proposed Companies Bill 2011, the key aims of the new act are:

• To modernize and simplify Seychelles corporate law;
• To unify Seychelles corporate law and adopt a single Act system, instead of the existing “dual” system consisting of the 72 Act and the IBC Act; thereby making for a less cumbersome and more coordinated approach;
• To provide an improved and more efficient and effective environment for the operation of companies in the domestic market;
• To provide a strong yet attractive regulatory framework, conducive to continued competitiveness and sustained growth for Seychelles as an international financial centre;
• To improve Seychelles corporate law, including making it more comprehensive and addressing existing issues and ambiguities;
• Consistent with the unification of corporate law and with the aim of improved service delivery, SIBA (or its successor, FSC) will assume the role of Registrar in respect of all companies in Seychelles (instead of the present, less-efficient system of having a separate Registrar for domestic and offshore companies);
• To further consolidate Seychelles corporate law by providing for CSLs (special licence companies) and PCCs (protected cell companies) within the New Act (ie.in conjunction with the repeal of the existing Companies (Special Licences) Act 2003 and the Protected Cell Companies Act 2003); and
• To reduce the differences between ordinary companies and IBCs.

A White Paper memorandum dated February 19, 2011, outlined proposals for a new Trusts Act, which aims to modernize and improve on Seychelles’ existing trust law, the International Trusts Act, 1994 (ITA), and to provide a stronger basis for building Seychelles trust business.

The memo identfies a number of shortcomings in the ITA which the proposed Trust Act 2011 would address. These include:

• The broad definition of international trust is problematic as regards foreign law trusts;
• While the ITA purports on the one hand to allow for Seychelles international trusts governed by foreign law, in contradiction of that section 7 gives the Seychelles courts “exclusive” jurisdiction in all matters pertaining to international trusts;
• There is no provision for private trust companies;
• Tax exemptions not provided for in the ITA itself; and
• Non-inclusion of various modern offshore trust law features and general need for updating

The memo stated that the draft Trusts bill 2011 is heavily modelled on Jersey's Trusts Act.


Seychelles International Business Company

The International Business Company is the most widely used vehicle for offshore operations in the Seychelles; it normally takes the form of a private company limited by shares, but can also be a Limited Life Company. The governing legislation is the International Business Companies Act 1994. Statutory requirements are minimal, and flexible:

• Only one director and one shareholder are required;
• Shareholders, directors and officers need not be resident in the Seychelles and there is no stipulation as to their nationality;
• There is no minimum capital requirement; shares may be either registered or bearer and may be issued in any currency;
• Accounts need not be kept; however, if they are kept there is no requirement for an audit.
• No returns are needed of shareholders, directors or officers;
• Shareholders and directors meetings need not be held in the Seychelles and can be held by telephone;
• The Memorandum and Articles of Association are the only documents to be held on the public record.

IBC status is granted subject to certain conditions:

• No business may be transacted with residents of the Seychelles;
• No ownership interest in real property in the Seychelles is permitted; property may be leased for office use only;
• Banking or trust business may be carried on only if an appropriate license is issued;
• Likewise, a licence is required to carry on insurance or re-insurance business;
• Engaging in the business of company management or providing registered facilities for Seychelles-incorporated companies is not permitted.

IBCs are permitted various activities within the Seychelles without compromising their offshore status under the Act; these include:

• professional contacts with lawyers, accountants etc;
• preparation and maintenance of books and records;
• the holding of directors' or shareholders' meetings;
• ownership of shares in other Seychelles companies, whether under the Act or the Companies Act 1972;
• ownership of Government or Central Bank securities;
• ownership of a vessel registered in Seychelles.

It is usual to use a registered agent in the Seychelles to incorporate an IBC (eventually it is obligatory to appoint one anyway). Fees for incorporation of an IBC are based on the company's authorised share capital. Normally, the incorporation process takes no more than one day; however, for banks, trust companies and insurers the process is lengthier (see Offshore Business Sectors).

Statutory incorporation fees used to be USD100 for capital up to USD100,000, and USD1,000 for capital over USD100,000. However, there is no longer any increase in licensing fees for share capital above USD100,000. Share capital is unlimited.

The annual renewal fees are also set at USD100, but are subject to a 7.5% tax. These fee levels are fixed for the life of the company, whatever changes may be made for new companies.

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Seychelles Special Licence Company

Special Licence Companies (CSL) are formed under the Companies (Special Licence) Act, 2003 (the Act). Unlike the IBC, a CSL may carry on permitted business inside as well as outside of Seychelles. The CSL entity is a Seychelles domestic company (under the Companies Act 1972), which is granted a special licence under the Act. A CSL has substantial statutory tax advantages (see Offshore Legal and Tax Regime) including access to the Seychelles Double Tax Agreements, of which that with China is of particular current interest.

Key features of the CSL are as follows:

• A CSL may carry on any business as permitted under the Schedule to the Act - including as an international holding company, a headquarters company, a franchise company, a marketing company, a company holding intellectual property, an investment company, etc.
• Bearer shares are not permitted;
• Nominee shares are permitted, but the name and address of beneficial owner is required to be disclosed to the Registrar of Companies. This information is not made publicly available by the Registrar.
• Foreign shareholders are permitted;
• There is a minimum of 2 Directors, who may be located outside of the Seychelles;
• A Seychelles-resident Company Secretary is required;
• Directors' or shareholders' meetings can be hekd anywhere, including by telephone or video-link;
• An annual company return and audited accounts must be filed;
• There is provision for "redomiciliation" - a foreign or Seychelles IBC may be continued as a CSL - and an CSL may redomicile to another jurisdiction.

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Seychelles Limited Partnership

Limited Partnerships (LP) are formed under the Limited Partnership Act, 2003 (the Act). An LP has substantial statutory tax advantages (see Offshore Legal and Tax Regime) including the ability to receive income from sources outside of the Seychelles and distribute such income to foreign partners without incurring a Seychelles tax liability. A Seychelles LP is highly-suitable for international joint venture activities.

Key features of the LP are as follows:

• The LP is required to have one or more general partners who are liable for the debts of the LP, and one or more limited partners who are not so liable in most circumstances.
• At least one general partner must be a Seychelles person (either a resident individual or an IBC or domestic company or CSL or an LP);
• A Seychelles registered office is required;
• An LP shall not carry on business in Seychelles, except to the extent necessary for the carrying on of the LP's business outside of Seychelles;
• An annual certificate must be filed verifying compliance by the LP with the provisions of the Act.

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Seychelles Protected Cell Company

Protected Cell Companies (PCC) are formed under the Protected Cell Companies Act, 2003 (the Act). A PCC is a Seychelles domestic company that has the right to create one or more identifiable cells so as to segregate and protect cellular assets as permitted under the Act. While each cell created by a PCC is separately identifiable and may have its own cellular assets, no cell will constitute a legal entity separate from the company (ie only the PCC is a separate legal entity).

The Directors of a PCC have a duty to keep cellular assets separate from non-cellular assets, and to keep the assets attributable to each cell separate from the assets attributable to other cells. Liabilities attributable to a particular cell of a PCC cannot attach the assets of other cells.

As in other jurisdictions, the PCC has particular use and appeal for captive insurance and collective investment scheme applications. It is likely that approval will be limited to these areas and for non-domestic business only.

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Seychelles Trusts

The International Trusts Act 1994 established, for the first time, a regime for international trusts in the Seychelles; it does not provide for domestic trusts. The Act was drafted after a thorough study of current practice in a number of leading offshore jurisdictions. Under the Act, the Seychelles International Business Authority (SIBA) is appointed as the regulatory body for trusts, alongside the Court.

The following are some of the key features of the Seychelles Trust regime (see Law of Offshore for further details):

• An international trust may be created in writing, by will or by oral declaration; deemed trusts are admitted, as are those resulting from a decision of the Court;
• Purpose trusts are permitted;
• The settlor must reside outside the Seychelles for the duration of the trust; at least one trustee must reside in the jurisdiction, but this trustee may be an IBC, which shall not thus be deemed as resident; an IBC may therefore be a settlor;
• The trust property may not include any Seychelles movable or immovable property.
• The names of settlors and beneficiaries are confidential under the Act, unless a Court orders disclosure under the Anti-money Laundering Act;
• The standard perpetuity period is 100 years; but it does not apply to purpose trusts;
• The accumulation of income is permitted;
• Forced heirship judgements are specifically excluded.

An international trust is exempt from tax in the Seychelles; a registration fee of USD100 is payable to SIBA. Registration of trusts must be carried out by one of the two licensed trustees currently operating in the Seychelles.

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Seychelles Foundations

The Seychelles’ Foundations Act 2009 was enacted in late December 2009 and provides for a new addition to Seychelles’ financial services product portfolio – Seychelles foundations. Key features and benefits under the Act are as follows:

• A Seychelles foundation is established by a charter made in writing and signed by one or more founders and on the issuance of a certificate of registration by the Registrar (the Seychelles International Business Authority) upon registration of the foundation under the Act. On registration, a foundation is a separate legal entity.
• A fee of USD200 is payable to the Registry (Seychelles International Business Authority) on establishment of a Seychelles foundation. An annual renewal fee of USD200 is payable annually thereafter to the Registry (due on the day before the foundation’s initial registration anniversary date).
• The assets of a foundation shall be of a value of not less than USD1 or the equivalent in any other currency. The initial assets may be endowed after registration of a foundation.
• Unlike in other foundation jurisdictions, it is not mandatory to state in the charter, or to otherwise file at the Registry, the names of the councillors of a Seychelles foundation.
• While the charter of a foundation is required to be filed at the Registry, there is no requirement to file a foundation’s regulations. While a foundation must have a charter, it may adopt regulations. A foundation will commonly adopt regulations, to ensure that matters pertaining to foundation beneficiaries and distribution entitlements remain non-public.
• The objects of a Seychelles foundation may be charitable, non-charitable or both, and may be to benefit a beneficiary or beneficiaries, or to carry out a specified purpose, or to do both.
• A foundation’s Council manages the foundation and is responsible for the administration and distribution of the foundation’s assets and the carrying out the foundation’s objects. A Seychelles foundation must have a minimum of 1 councillor, who may be a natural person or corporate entity.
• A foundation is exempt from Seychelles Business Tax on its income and is exempt from Seychelles withholding tax, social security contributions and stamp duty (except in relation to any permitted lease of Seychelles real estate for own office use).
• A foundation may own assets worldwide. However, the assets of a foundation may not include any Seychelles real estate or other Seychelles property (subject to various exceptions under the Act, including shares in Seychelles IBCs or CSLs, interests under a Seychelles trust, Seychelles limited partnership or another Seychelles foundation, or a Seychelles bank account, etc).
• A foundation’s founder may be a natural person or a corporate entity, and a founder may be a foundation beneficiary but not the sole beneficiary. Nominee founders are permissible A founder may reserve, in the foundation charter or regulations, to the founder or for other persons, various rights – such as the right to approve investment activities of the foundation, the right to appoint or remove councillors, protectors and beneficiaries.
• The appointment of a protector (otherwise known as a guardian) is optional. A protector may be a natural or legal person.
• Seychelles foundation assets are the property of the foundation only, that is, neither the founder nor the beneficiaries have any ownership interest in foundation assets.
• While a Seychelles foundation is required to keep proper books of account and records as its council considers necessary in order to reflect the financial position of the foundation, it is not subject to a mandatory annual audit requirement or to any requirement to file financial accounts or annual return in Seychelles.
• The Act provides for continuation of foreign foundations in Seychelles and for continuation of Seychelles foundations overseas. The Act also provides for two or more existing foundations to consolidate into a new foundation and for an existing foundation to merge into another existing foundation.

The Act provides for strong foundation asset protection, including as follows:

• Provisions protecting dispositions to a Seychelles foundation from challenge from creditors of the founder; and a 2 year statute of limitations for creditors’ claims coupled with a high onus of proof (beyond reasonable doubt, rather than on the balance of probabilities);
• Specific exclusion of foreign forced-heirship laws;
• Provision may be made for the foundation to retain title to assets conditionally distributed to beneficiaries;
• Beneficiaries’ rights to information may be restricted;
• Provision may be made to disentitle a beneficiary who challenges asset transfers to or distributions by a foundation.

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