Seychelles vs BVI, which jurisdiction is the best when it comes to setting up a company in offshore jurisdictions? Both of these jurisdictions have a lot in common, but they also have some differences that might influence your ultimate decision. Relin Consultants’ guide below provides a detailed comparison between the offshore jurisdiction of Seychelles and BVI.
WHAT DOES AN ‘OFFSHORE COMPANY’ MEAN?
Any business or activity that takes place outside of an entity’s home base is referred to be ‘offshore’. Foreign banks, businesses, investments, and deposits are all examples of what the phrase might refer to. A firm may properly relocate overseas to benefit from less stringent tax restrictions.
WHAT ARE THE BENEFITS OF AN OFFSHORE COMPANY?
- Tax benefits include significant reductions in both personal and business taxes.
- Protection from litigation and creditor claims.
- Strict confidentiality and privacy regulations, with no necessity for public disclosure.
- Simple legislative responsibilities and minimal bureaucracy make it easier to operate.
WHAT ARE THE SIMILARITIES BETWEEN SEYCHELLES AND BVI JURISDICTION?
There are a few similarities between these two jurisdictions, which are as follows:
- Corporation legislation that is current and progressive.
- Convenient company formation and renewal procedures in place.
- There are no requirements to file financial statements or conduct annual audits (with the concurrent responsibility to retain accounting records).
WHAT ARE THE MAJOR DIFFERENCES BETWEEN A SEYCHELLES AND BVI JURISDICTION?
While there are some parallels between these two jurisdictions, there are a few major differences that you should be aware of.
The following differences are examined below:
Location and Population
Seychelles is a country in the South-Western Indian Ocean with a total land area of 455.3 square kilometers and a population of around 85,000 people.
The British Virgin Islands (BVI) has a total land area of about 155 square kilometers and is located in the Caribbean Sea, east of Puerto Rico. Around 21,000 individuals live there.
Seychelles is developing as a viable option to a more well-known jurisdiction such as the British Virgin Islands. A lot of individuals believe it even outperforms the BVI in some areas, such as reputation and standing.
For many years, the BVI has been the most popular offshore jurisdiction, and it is also well-known among the general public. Since 1984, almost 800,000 businesses have been formed.
Taxation and Confidentiality
Seychelles IBC is tax-free and offers great privacy protection, like most offshore corporations. Unlike the British Virgin Islands, Seychelles has no commercial relations with the United States, the United Kingdom, or the European Union, and it has not signed any information-sharing agreements with them.
If the business is conducted abroad, a BVI company may be exempted from paying taxes. It also has minimal record-keeping and reporting obligations, as well as extensive confidentiality provisions.
Authorized share capital
A Seychelles company’s capital structure can be quite flexible. There is no minimum authorized share capital. Whereas 50,000 shares are recommended as authorized share capital for a BVI company. Additional costs will be incurred if the number of shares exceeds 50,000. However, these are minimal.
Seychelles has complete independence. This implies that the country’s policies and legislation are not influenced by the will of any other state or supranational entity. Seychelles is known for its political and economic stability, and in recent years, this jurisdiction has grown in popularity in comparison to its competitors.
Unlike Seychelles, the BVI is a British Overseas Territory. The BVI’s status as an Overseas Territory means that they are technically under the authority of the United Kingdom, but have the greatest amount of self-government imaginable, including its own business laws and tax structure.
Economic substance compliances
Seychelles currently lacks broad-based economic substance law. For the time being, significant activity requirements apply solely to organizations regulated under the Securities Act of 2007 and the Mutual Fund and Hedge Fund Act of 2008. As a result, there is no necessity for ordinary Seychelles businesses (IBCs) to be economically present in the jurisdiction, and as a result, there is no additional compliance burden, reporting, or fines as a result of this.
The Economic Substance (Companies and Limited Partnerships) Act 2018, is in effect in the British Virgin Islands. The Act applies to BVI enterprises involved in banking, distribution, and service center operations, insurance, fund management operations, financing or leasing operations, headquarters operations, shipping operations, and intellectual property operations. To continue such operations per the legislation, the firms must be present not only legally (as an entry in the company register), but also economically in the BVI.
|Location and Population||Located in the South-Western Indian Ocean with approximately 85,000 residents.||Located in the Caribbean Sea. Around 21,000 people.|
|Popularity||Developing as a viable option to more well-known jurisdictions.||One of the most commonly utilized offshore jurisdictions.|
|Taxation and Confidentiality||Tax-free and offers great privacy protection.||Exempted from taxes if businesses are done abroad|
|Authorized share capital||No minimum share capital.||50,000 shares are recommend. Excess of 50,000 shares will incur extra costs.|
|Legal status||Complete independence.||British Overseas Territory.|
|Economic substance compliances||Activity requirements apply solely to organizations regulated under the Securities Act of 2007 and the Mutual Fund and Hedge Fund Act of 2008||The Economic Substance (Companies and Limited Partnerships) Act 2018, is in effect in the British Virgin Islands|
Depending on your company’s business activities and long terms plans, one jurisdiction might be more favorable than the other. Relin Consultants recommends our clients schedule a non-obligatory consultation with one of our consultants to determine the best jurisdictions.
Feel free to reach out to us at +65 8756 2027 to schedule an appointment.
What are the key requirements to set up an offshore company in Seychelles vs BVI?
Is it possible for a Seychelles IBC to invest in Seychelles?
An IBC may own shares, debt obligations, or other instruments in a domestic corporation. An IBC may also own or operate a Seychelles-registered vessel or aircraft. However, a Seychelles IBC is not permitted to conduct any trading activities in Seychelles.