Company formation in brief
Registration, control and regulation of the activities of offshore companies (International Business Companies), as well as offshore 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 registrars in the world.
The Seychelles International Business Companies Act, adopted in 1994, incorporated at that time all the best that was invented in offshore world. The Act was constantly evolving and continues to develop, acquiring amendments dictated by the time, and today, in 2021, the Seychelles offers a potential foreign investor all possible "offshore features", including usage of an IBC for a domestic business.
All Seychelles offshore companies (International Business Companies) are at all time required to have a Registered Agent (Licensed International Corporate Service Provider) in Seychelles and maintain a registered office address there. All licensed agents are required to strictly follow the 'Know Your Customer' standards and procedures.
All offshore companies are required to keep records of their financial transactions and inform registered agents about the location of primary accounting documentation. The primary accounting documentation should be sufficient for a complete and correct description of business activity of the company, for determining its financial condition, as well as for the preparation of financial statements, if requested by the Authority. 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).
Primary accounting documents can be stored both in the registered office of the offshore company in Seychelles, and at the address provided by the company directors (in this case, the directors and beneficiaries must sign a resolution indicating the address, where the originals of primary accounting documents will be kept).
The Registrar of International Business Companies in Seychelles has the right at any time to require the registered agent of the offshore company to provide primary accounting documents, and the agent, in turn, has the right to answer that this information is not stored at the legal address of the offshore company, but is held by the directors and (or) beneficiaries of the offshore company at the address indicated in the resolution signed by the directors and beneficiaries of the offshore company.
Please note that directors of offshore companies can be fined both for failure to provide financial information, and for deliberately preventing the Registrar from obtaining this information.
An 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 company is automatically deleted from the Register of acting companies and the relevant information is published in the official Gazette of the Seychelles.
The Companies Act clearly explains that a company that has been excluded from the Register is not entitled to continue its economic activities and, in particular, to operate its bank accounts, although the directors and shareholders of such a company continue to bear full responsibility for all debts and obligations of their enterprise.
Redomiciliation is a process by which an offshore company transfers its registration from one jurisdiction to another, whilst maintaining the same legal identity.
There are many reasons why companies change jurisdictions, but the most common reason is due to changes in international legislation. That is, the offshore company ceases to exist in the country of its current registration and continues to exist and conduct business under the same name (or another), but in another jurisdiction. Many countries do not allow foreign companies to relocate (redomicile) their legal address from one jurisdiction to another. In the Seychelles though, any foreign company can continue its existence as a company established as per the Seychelles International Business Companies Act.
Practice shows that in the course of the life 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 address and agent, the owners of an offshore company must first of all find a new 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 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 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 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.
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