Seychelles Special License Company (CSL) – Start Now

The Special License Company Seychelles is a special form of low-tax offshore company formation that is accessible in Seychelles and it is licensed by the Seychelles International Business Authority (SIBA). It is governed by the main Companies Law with special provisions offered by the SEYCHELLES COMPANIES (SPECIAL LICENCES) ACT, 2003. 

Completely tax-exempt offshore corporations and IBC companies frequently run into problems since they are thought of as “offshore companies.” For those involved in trading activities where there would be several global partners in various nations, the Seychelles Special license company also known as Seychelles CSL is a good alternative to these organizations.

A Seychelles CSL that satisfies specific requirements is eligible for access to the network of Double Taxation Avoidance Agreements (“DTAAs”) signed by the government of Seychelles and numerous treaty partners, including China, Indonesia, and South Africa.

Special License Companies (SLCs) in Seychelles are subject to a low and competitive tax regime. SLCs are exempt from corporate income tax, withholding tax, capital gains tax, and stamp duty on the transfer of shares. However, they are required to pay an annual license fee to the Seychelles Financial Services Authority (FSA), which varies based on the SLC’s authorized capital.

A CSL can be utilized in the following sectors:

• Offshore banking
• Offshore insurance and reinsurance
• Intellectual property holding
• Franchise
• Investment services
• Holding company

WHAT IS A SEYCHELLES IBC COMPANY?

IBC stands for International Business Company, which is a type of company commonly used for offshore business activities. An IBC in Seychelles is a legal entity that is incorporated under the Seychelles International Business Companies Act of 2016.

Check this guide for Seychelles Incorporation

An IBC in Seychelles is a flexible and tax-efficient vehicle that can be used for a wide range of business activities, such as asset protection, wealth management, international trade, investment holding, and intellectual property holding. IBCs in Seychelles are exempt from all local taxes except for an annual license fee.

Seychelles IBCs are popular due to their ease of incorporation, low maintenance costs, and confidentiality. Seychelles IBCs are not required to file annual financial statements or disclose their beneficial owners to the authorities. However, Seychelles has implemented a system of information exchange with other countries to comply with international standards for transparency and anti-money laundering.

Table stating the key differences between Seychelles IBC and Seychelles Special License Company (CSL)

SEYCHELLES DOUBLE TAX AVOIDANCE AGREEMENTS

• The Republic of Seychelles has signed and ratified a number of key DTAs, and it is currently negotiating with a number of other nations.
• China, UAE, Oman, Cyprus, Malaysia, Indonesia, South Africa, Mauritius, Vietnam, Thailand, Botswana, Qatar, Barbados, and Belgium are among those that have ratified and put the agreement into effect.
• Russian, Egyptian, Kuwaiti, Czech, Tunisian, Namibian, and Bahraini negotiations have come to an end.
• Philippines, Malta, Burundi, Ivory Coast, Lesotho, Morocco, and Uganda are among the nations currently engaged in negotiations.
• Because of the reduced agreed withholding rates on interest, dividends, and royalties specified in these DTAAs, the Seychelles CSL is able to invest and conduct business in the treaty countries.

REQUIREMENTS TO START A SEYCHELLES CSL

In order to establish a Seychelles Special License Company (CSL), one must ensure that they meet the following conditions:

• Presence of two shareholders or more
• At least two directors are present
• One company secretary
• A listed, official address
• A share capital requirement of at least 1 USD.

PROCESS OF STARTING A CSL IN SEYCHELLES

Preparing the documents

A company can only be incorporated if all necessary paperwork is submitted. In order to establish a Special License Company in the Seychelles, the following documents are required:

• Cover letter
• A properly completed application form that should contain:

1. Name and information about the secretary
2. Registered business location
3. Name and contact information for the auditors
4. Name and phone number of the legal counsel
5. information on the share capital of the company

• Certificates of declaration signed by the company’s directors
• Certificates of declaration signed by the company’s shareholders
• An efficient business plan
• Due diligence records
• Articles of Association and Memorandum
• A copy of each  shareholder’s passport and visa
• Residential proof of the shareholders of the company                                                                     

Obtaining the Business License

Following submission, the Seychelles International Business Authority verifies the documents. In accordance with section 9(1) of the Companies (Special Licences) Act, SIBA will grant the appropriate business license following the Registrar of Companies’ issuance of the certificate of incorporation.

Opening a Corporate Bank Account

The final step is to open a bank account for an offshore corporation, which will enable the business to handle business transactions more easily.

Refer to Seychelles corporate bank account opening for more information.

Management and Control of the CSL

The administration and control of the company is a significant clause in the majority of double taxation avoidance treaties.

Before establishing a Seychelles CSL, it is advised to clients to speak with a reputable tax expert in the treaty country to make sure there are no complications that could prevent them from being able to take advantage of the treaty benefits when it comes time to pay taxes.

When applying for a Seychelles CSL, more information must be disclosed to the relevant people than when applying for a Seychelles IBC.

Directors are a matter of public record, but shareholders and beneficial owners are not.

Capital Gains Treatment in the CSL

The absence of capital gains taxes in Seychelles is a significant characteristic of a Seychelles CSL.

With the exception of the usual exclusions, such as gains from moveable property, the majority of double taxation avoidance agreements also provide that capital gains taxes would not be withheld at source.

Investment gains from public securities are often not taxed.

PROS OF SEYCHELLES COMPANIES SPECIAL LICENSE (CSL)

Some of the key uses of the Seychelles Companies Special License include:

• Investment Holding – The CSL license can be used by companies that wish to hold investments in other companies, such as shares or other financial instruments.
• Intellectual Property – Companies that wish to hold intellectual property rights, such as patents, trademarks, or copyrights, can also use the CSL license.
• International Trading – The CSL license can be used by companies that engage in international trade activities, such as import and export.
• Asset Protection – The CSL license can be used by companies that wish to protect their assets from potential legal liabilities, lawsuits, or creditors.
• Wealth Management – The CSL license can be used by companies that provide wealth management services, such as family offices or trust companies.
• Real Estate Holding – The CSL license can be used by companies that wish to hold real estate assets, such as land or buildings, for investment purposes.

CONS OF SEYCHELLES COMPANIES SPECIAL LICENSE (CSL)

While the Seychelles Companies Special License (CSL) offers a range of benefits for companies, there are also some potential disadvantages to consider. Some of these include:

• Limited Market Access – Companies holding a CSL license may face limited market access, as certain countries or jurisdictions may view the CSL license as a form of tax haven or offshore entity.
• Compliance Requirements – Companies holding a CSL license are required to comply with certain regulatory requirements, including filing annual audited financial statements and maintaining a registered office in Seychelles.
• Limited Activities – The CSL license is designed for specialized activities, so companies looking to engage in other business activities may need to obtain additional licenses or permits.
• Cost – The CSL license can be expensive to obtain and maintain, which may not be feasible for smaller businesses or startups.

Professional service providers such as Relin Consultants  can simplify the CSL establishment process. We provide services such as bookkeeping and accounting, providing a local corporate secretary, preparing all the required paperwork, etc. 

Reach out to us at Relin Consultants for further assistance.