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Seychelles: Offshore Legal and Tax Regimes

Tax Treatment of Offshore Operations

SSee Domestic Corporate Taxation for the general principles of Seychelles corporate taxation, which also apply to offshore entities except as indicated below. Offshore Seychelles entities are subject to the following fee and tax structures:

International Business Companies pay a registration fee of US$100. This is also the amount of the annual renewal fee.

There is a scale of fees in the International Business Companies Act covering inspection of documents in the Registry, copies of entries, increase of capital etc. The fee levels are fixed for the life of an IBC, whatever subsequent changes may take place to fee levels.

IBCs are exempt from business tax, from withholding taxes and from stamp duty; however they must pay tax on employees’ non-monetary benefits unless the IBC is in the International Trade Zone (see below) or the employees are crew members of a ship in international waters.

Offshore (Non-Domestic) Banks pay a licence application processing fee of US$2,000 and an annual license fee of between SR250,000 and SR1m, depending on the total value of their assets. See Offshore Business Sectors for details of the licensing regime. Banks are exempt from business tax, withholding taxes, customs duties and stamp duty. They can choose to pay business tax at a rate which is agreed with the Commissioner of Taxes. Banks pay social security contributions with respect to their employees (see Personal Taxation).

Offshore (Non-Domestic) Insurance Companies pay license application processing fees and annual license fees as follows:

  • Licence application processing fee US$500 for an offshore licence.
  • Annual licence fee US$1,500 for either offshore general insurance or offshore life insurance.
  • Annual licence fee US$3,000 for both offshore life and general business.
  • Annual licence fee US$1,000 for a single-parent captive insurer.

See Offshore Business Sectors for details of the licensing regime.

Like banks, offshore insurance companies are exempt from business tax, withholding taxes, custom duties and stamp duty. They can also elect to pay business tax at a rate which is agreed with the Commissioner of Taxes. There is a guarantee of exemption from future taxes for 20 years from the time of registration. Insurance companies pay social security contributions with respect to their employees (see Personal Taxation).

International Free Zone (SITZ) Companies pay annual licence fees and application processing fees as follows:

  • Redistribution licence: US$550.
  • Light Assembly Licence: US$550.
  • Manufacturing Licence: US$2,700 plus US$1,300 initial processing fee.
  • Processing Licence: US$2,700 plus US$1,300 initial processing fee.
  • Export Services Licence: US$1,500 plus US$500 initial processing fee.

These licence fees are fixed for the life of a licensed company. See Law of Offshore for details of the regulatory regime and licensing process for SITZ companies.

SITZ companies are exempt from business tax, withholding taxes, custom duties and stamp duty.

International (Offshore) Trusts pay an initial registration fee of US$100. Offshore Trusts are exempt from business tax, withholding taxes and stamp duty. See Law of Offshore for a details of Seychelles Trust legislation.

Limited Partnerships pay a registration fee of US$200. They may receive income from sources outside of Seychelles and distribute such income to foreign partners without incurring a Seychelles tax liability. In addition:

  • An LP is exempt from all Seychelles tax or duty on income or profits of the LP;
  • An LP is exempt from stamp duty on property transfers, share transfers and other business transactions;
  • An LP is exempt from trades tax on all furniture and equipment imported into Seychelles for office use;
  • An LP has exemptions under the Social Security Act.

These exemptions granted under the LP Act are guaranteed for 20 years and continue in force thereafter unless otherwise provided for by written law.

Special Licence Companies (CSL) pay a US$D00 application fee, annual licence fee of US$1,000 and a US$200 annual filing fee. They may carry out permitted business inside as well as outside the Seychelles. The CSL entity is a Seychelles domestic company (under the Companies Act 1972), which is granted a special licence under the Companies (Special Licence) Act and has access to the Seychelles' steadily expanding network of double taxation avoidance treaties. In addition:

  • A CSL is liable to Seychelles business tax at the rate of 1.5% on its world-wide income (as an exception to the Seychelles territorial tax system, any foreign income derived by a CSL will be deemed to be Seychelles-sourced income);
  • A CSL is exempt from withholding taxes on dividends, interest and royalties.
  • A CSL is exempt from stamp duty on property transfers, share transfers and other business transactions.
  • A CSL is exempt from trade tax on all furniture and equipment imported into Seychelles for office use.
  • A CSL has exemptions under the Social Security Act and from work permit fees for expatriate workers.

These exemptions granted under the CSL Act are guaranteed for ten years and continue in force thereafter unless otherwise provided for by written law.

 

 

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