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
- 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 Special License Company (CSL)
|A company incorporated under the International Business Companies Act of 2016
|A company incorporated under the Companies (Special Licenses) Act of 2003
|Can conduct any legal business activity except for certain regulated activities such as banking, insurance, and asset management without a license
|Can conduct any legal business activity, including regulated activities such as banking, insurance, and asset management, with a license
|Exempt from all local taxes, except for an annual license fee
|Exempt from all local taxes, except for a low tax rate of 1.5% on global income, and a reduced rate of 0.5% on qualifying foreign income
|Not required to file annual financial statements, but must keep proper accounting records
|Required to prepare and file annual audited financial statements
|No requirement for local directors or officers
|Must have at least two local directors and a company secretary who are licensed by the Financial Services Authority
|No requirement to disclose beneficial ownership to the authorities
|Must disclose beneficial ownership to the authorities
|High degree of confidentiality
|Less confidential due to the requirement for disclosure of beneficial ownership and the need for local directors and officers
|No licensing requirements for business activities
|Must obtain a special license to engage in certain regulated activities
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:
- Name and information about the secretary
- Registered business location
- Name and contact information for the auditors
- Name and phone number of the legal counsel
- 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.
What is a Seychelles Companies Special License?
A Seychelles Companies Special License (CSL) is a type of business license offered by the Seychelles government to companies that wish to conduct certain specialised business activities.
What are the benefits of a Seychelles CSL?
The benefits of a Seychelles CSL include a flexible legal structure that allows for a high degree of confidentiality and privacy, favorable tax regime, and limited liability protection.
What types of businesses can benefit from a Seychelles CSL?
Businesses that can benefit from a Seychelles CSL include investment holding companies, intellectual property holding companies, international trading companies, asset protection companies, wealth management companies, and real estate holding companies.
What are the compliance requirements for a Seychelles CSL?
Compliance requirements for a Seychelles CSL include filing annual audited financial statements, maintaining a registered office in Seychelles, and appointing a resident agent.
How long does it take to obtain a Seychelles CSL?
The time it takes to obtain a Seychelles CSL varies depending on the complexity of the application and the completeness of the required documents. It can take anywhere from a few days to a few weeks.
Is a Seychelles CSL considered a tax haven?
The Seychelles is not considered a tax haven by the OECD, but companies holding a Seychelles CSL may face limited market access due to the perception of Seychelles as an offshore financial center.
Can a Seychelles CSL conduct business in Seychelles?
A Seychelles CSL can conduct business in Seychelles, but it must comply with all relevant regulations and obtain any necessary permits or licenses.
Can a Seychelles CSL have a bank account?
Yes, a Seychelles CSL can have a bank account in Seychelles or in other jurisdictions, subject to compliance with relevant banking regulations and due diligence requirements.
Can a Seychelles CSL be used for illegal activities?
No, a Seychelles CSL cannot be used for illegal activities, and any such activity would be subject to legal consequences. Seychelles has robust anti-money laundering and counter-terrorism financing regulations in place.
Can a Seychelles CSL be transferred or sold to another party?
Yes, a Seychelles CSL can be transferred or sold to another party subject to compliance with relevant regulations and requirements.