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Seychelles
Offshore Company formation in brief
Registration, control and regulation of the activities of Seychelles offshore companies (also known as International Business Companies or IBCs), as well as offshore Seychelles trusts and foundations, are entrusted to the SFSA (Seychelles Financial Services Authority) and it is no exaggeration to say that SFSA is one of the fastest offshore Registrar in the world.
The Seychelles International Business Companies Act was adopted in 1994 and incorporated at that time the best features that was invented in offshore world. The Act was constantly evolving and continues to develop, acquiring amendments dictated by the time, and today, in 2022, Seychelles offer a potential foreign investor all possible "offshore features", including usage of an IBC for a domestic business.
Each Seychelles offshore company (International Business Company or IBC)) is at all time required to have a Seychelles Registered Agent (known in Seychelles as the Licensed International Corporate Service Provider) and maintain its registered office address in Seychelles. All licensed agents are required to strictly follow the 'Know Your Customer' standards and procedures when on boarding clients.
All offshore Seychelles companies are required to keep original minutes of meetings, written resolutions of members and directors, registers of directors, members and beneficial owners as well as their accounting records. The directors of Seychelles IBC are required to submit a NOTICE OF LOCATION OF COMPANY RECORDS for filing upon incorporation and renewal of the IBC.
Since 2011 the Seychelles legislation obliged all offshore companies (IBCs) to keep their accounting records either at the registered office or at any other address overseas at the directors' discretion.
With effect from August 6, 2021 a new legislation has been enacted in Seychelles in regards to the location of IBCs accounting records, whereby either originals or copies of the accounting records of each and every Seychelles offshore company (IBC) should now be kept in Seychelles.
Please note that without exception, all Seychelles offshore companies (regardless of their activities and regardless of their current good standing status) will now require to send accounting records to the Seychelles Registered Agent not less than 2 times a year. The records related to the company activities in first half of the year (from January to June) of the current calendar year must be sent to the Seychelles Registered Agent by July of the same year. The records related to the company activities in the second half to the year (from July to December) must be sent to the Seychelles Registered Agent by January on the following year.
Accounting records are defined as documents relating to assets, liabilities, receipts, expenditure, sales purchases and other transactions to which a Seychelles offshore company (IBC) is a party to. Therefore, accounting records can take on many forms and that include bank statements, receipts, invoices, vouchers, title documents, contracts and agreements, ledgers and any other documentation underpinning a transaction.
Dormant/none trading offshore Seychelles companies that do not conduct business activities and do not have bank accounts can send declarations of their inactive status.
According to the Seychelles legislation, the period for storage of primary documents is limited to seven years (from the date of transactions related to them).
The Registrar of Seychelles International Business Companies has the right at any time to require the Seychelles Registered Agent of the offshore company (IBC) to provide accounting records.
Please note that directors of Seychelles offshore company can be fined for both failure to provide the Seychelles Registered Agent with the accounting records, and for deliberately preventing the Registrar of Seychelles International Business Companies from obtaining the records.
A Seychelles offshore company can be strike off due to non-payment or late payment of the annual renewal fee, which must be paid no later than the day of the company's incorporation in each calendar year. If the fee is not paid by December 31 of the current year (during this period, invoices are subsequently issued with two added penalties for late payment), then the offshore Seychelles company (IBC) will be automatically deleted from the Register of Seychelles International Business Companies and the relevant information will be published in the official Gazette of the Seychelles.
The Seychelles International Business Companies Act clearly explains that a Seychelles offshore company that has been excluded from the Register is not entitled to continue its economic activities and, in particular, to operate its local Seychelles or offshore bank accounts, although the directors and shareholders of such Seychelles IBC continue to bear full responsibility for all debts and obligations of their offshore company.
Redomiciliation is a process by which an offshore company transfers its registration from one jurisdiction to another, whilst maintaining the same legal identity.
Changes in international legislation (which recently took place in the Bahamas, Bermuda, British Virgin Islands, Belize, Cayman Islands, Guernsey, Jersey, Isle of Man, Mauritius, UAE and many other offshore jurisdictions) and other reasons often force an offshore company to change the jurisdiction of its registration, i.e. cease to exist in the country of current registration and continue to exist and conduct business under the same name (or changing it), but in another jurisdiction.
The advantage of such a continuation (legally called and recognised as redomiciliation) is that if everything is done in accordance with the law, then there is practically no need to even close the existing bank account of the offshore company.
Not all countries allow foreign offshore companies to relocate (redomicile) their legal address from one jurisdiction to another, but any foreign company can continue its existence in the Seychelles as a company established in accordance with the Seychelles International Business Companies Act.
The easiest way for a foreign offshore company to redomicile to Seychelles is for an offshore company to adopt a standard Memorandum and Articles of Association of a Seychelles international business company (IBC) and, in general, provide the Registrar of International Business Companies in Seychelles with the Certificate of Good Standing issued in the current jurisdiction of incorporation, minutes of the general meeting where it was decided to redomicile the offshore company to Seychelles, and other documents upon request.
A foreign offshore company, that has fulfilled all the necessary requirements, will receive a Certificate of Continuation issued by the Registrar of International Business Companies in Seychelles, after which the offshore company continues its activities and can exercise all corporate powers in accordance with the Seychelles International Business Companies Act.
After redomiciliation, property of any kind remains in the hands of the offshore company, which continues to be responsible for all its debts and obligations. All shares of the offshore company that are not paid at the time of issue will be considered by the Registrar of International Business Companies in Seychelles as issued and paid.
A relocated (redomiciled) international business company maintains its full legal status in the Seychelles, regardless of any provisions of laws of the jurisdiction of its former registration, even if they do not provide a legal possibility for redomiciliation.
However, such situation might be a cause of collisions between two legal systems and the offshore company may be involved in a conflict in the country of its former registration. In order to prevent this from happening, it is always recommended to legally discontinue (after the Certificate of Continuation in Seychelles is issued) the company from the Register of Companies operating in the jurisdiction of its former registration.
The international business company will lose its new status only if it is dissolved and liquidated in the Seychelles.
Practice shows that in a course of the lifetime of an offshore company, its owners may decide to change the Registered Agent (and, as a consequence, the Registered Office address), and this can be due to a number of reasons.
In order to change the registered address and agent, the owners of an offshore company must first of all find a new Registered Agent who will agree to take over this company. This seemingly simple formality has a number of fundamental points, for example:
- the pricing policy of the new Registered Agent may differ significantly from the previous one and the cost of the same services for the new agent may be higher;
- the requirements of the new Registered Agent regarding the completeness of information about the client stored in its database may not coincide with the consent of the client himself to disclose certain personal or business information;
- change of Registered address and agent entails making appropriate changes and additions to the company file kept by the registrar of offshore companies and, as a result, the need to change the existing Memorandum and Articles of association of the company to the format used by the new agent. This, in turn, entails the need to notify all bankers and contractors of the company with whom any business relations have already been established, and sometimes to go through the appropriate re-registration.
If these nuances do not bother and the owners of offshore company still firmly intend to change the address and agent, then they will also have to accept that the procedure itself is by no means free. The generally accepted international practice of such a change provides for the payment of the so-called loss of the office fee, which the former agent will require to pay together with all the bills for services accumulated at the time of the change of the agent, if such were provided and were not paid on time.
When all the above issues are preliminarily settled, the directors of offshore company sign a short standard resolution, and the new agent proceeds with all the necessary formalities, which may take one or two weeks for entering new documents into all files and registers prescribed by law.
Tax Information Exchange Agreements:
Denmark, Faroe Islands, Finland, Greenland, Guernsey, Iceland, India, Netherlands, Norway, Sweden, Switzerland.
Double Taxation Agreements:
Bahrain, Barbados, Belgium, Bermuda, Botswana, China, Cyprus, Ethiopia, Guernsey, Indonesia, Isle Of Man, Jersey, Kenya, Luxembourg, Malaysia, Mauritius, Monaco, Oman, Qatar, San Marino, Singapore, South Africa, Sri Lanka, Swaziland, Thailand, United Arab Emirates, Vietnam, Zambia.
International Corporate Service Provider | Licensed by the Seychelles Financial Services Authority | +248 2524900 | [email protected]
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