With a population of 80,000 people, this small economy is fast-growing and has attracted the attention of many foreign investors, with its economic and political stability and an attractive tax climate. In this article, we will take you through
- A brief overview of the Seychelles
- Benefits of Registering a company in the Seychelles
- Drawbacks associated with registering a company in the Seychelles
- Procedure of the company set-up
A brief overview of Seychelles
Seychelles is a beautiful archipelago in East Africa made up of 115 tropical islands in the Indian Ocean that is known for its luxurious resorts, beautiful beaches, and top-notch service, making them a hotspot for many tourists. Seychelles is also home to multi-ethnic groups of people hailing from all around the world. This diversity is incredibly unique as every citizen is being regarded on equal footing no matter the history of their descendants.
Though tourism is a strong industry here, it has also caught on the attention of foreign investors to set up their business ventures in this country. Albeit a relatively small country, Seychelles has been successful in its economic growth and social development making it suitable enough to be considered as a viable option for foreign investments or business ventures.
Benefits of Registering a company in the Seychelles
1. Economic and Political Stability
Seychelles has shown strong economic performance and a GDP growth of 3.6% in 2018 and in fact, is the country with the 2nd highest GDP per capita in Africa. It is a growing economy with opportunities in the Blue Economy, ICT, tourism, energy, real estate, and agriculture. Though tourism makes up for most of the revenue in the economy, the government has been taking steps to reduce its dependence by encouraging the development of farming, fishing, small-scale manufacturing, and more recently, the offshore financial sector. This is done through the establishment of the Financial Services Authority and introducing policies such as the International Corporate Service Providers Act, the International Business Companies Act, the Securities Act, the Mutual Funds and Hedge Fund Act targeted at the financial sector.
Seychelles has not experienced any large scale political violence since the 1970s, with significant developments seen under a democratically elected government governed by Danny Faure since 2016. Seychelles has also been a part of reputable organisations such as the Commonwealth, the United Nations, the African Union, and many others. Seychelles have also established embassies throughout the world in many major cities such as in New York, Brussels, Paris, Beijing, New Delhi, London, and so on.
2. Convenient location
Seychelles makes an attractive hub for businesses to set up their ventures due to being very well-connected through air and sea transport from major centres like the Middle East, Asia and Africa. The busiest airport is located in its capital, Victoria, in Mahé Island, boasting of the title of being in the top 10 airports in Africa.
As a fully independent commonwealth nation with no currency restrictions, the Seychelles government along with the support of the IMF, World Bank, and OECD have been able to build Seychelles into an up and coming financial hub. As such, Seychelles has become a popular location for investors with its geographically strategic location and competitive price markets for businesses to consider their offshore business set-up.
3. Attractive Tax and Fiscal Policies
Offshore investment in the Seychelles jurisdiction is also a widely-chosen option due to the favourable conditions for investors and entrepreneurs.
One of the main reasons that has attracted investors to consider Seychelles is due to their taxation policy for foreign companies – International Business Company (IBC), the preferred method of offshoring, where companies benefit from 0% corporate tax and are exempt from the withholding tax dividends of tax dividends.
There are also tax policies beneficial for certain industries such as agriculture, tourism, energy and fisheries industries. Furthermore, Seychelles has also signed tax treaties with various countries such as the DTA (Double Taxation Avoidance) Treaties with countries like China, Oman, South Africa, Botswana, Malaysia, Belgium, Cyprus, Zambia, UAE, Thailand, Mauritius, Indonesia and Barbados.
4. Language of doing business
The official languages of Seychelles is English, French and Creole. This is due to the history of French influences. This enables ease of communication with English being the lingua franca of the world and makes it easier for businesses to carry out their operations smoothly.
5. Inexpensive and Easy
It is a relatively inexpensive and easy procedure to incorporate your company in Seychelles, Being a tax-free entity for offshore companies under the legislations put in place, it makes Seychelles a business-friendly environment for overseas investors. Although the process may be quite straightforward, it is still recommended to work with experienced agents such as our team at Desfran to ensure the best outcome through the procedures as well as receive expert insights to the setting up offshore companies.
Drawbacks of registering a company in the Seychelles
1. Restrictions and Restricted Activities
In order to enjoy the 0% tax along with the numerous fiscal benefits, investors usually consider going for the IBC solution to set up a company in the Seychelles. However, there are some restrictions that are important to note of as they could be a crucial point of consideration for investors.
For the case of IBCs in Seychelles, these restrictions are
- No operations in the insurance sector in the country
- No offering of gambling, betting or casino services
- No comprise of a mutual fund
- No sale or purchase of securities in Seychelles
- No owning of real estate in Seychelles
Therefore, it is important to keep these in mind when considering Seychelles as the place for investing in an offshore company set-up.
2. Vulnerability to external shocks
Although measures have been put in place, the Seychelles economy is still heavily dependent on tourism with 90% of its total primary and secondary production inputs imported. IMF had forecasted a fall in GDP growth of -10.8% in 2020 due to the outbreak of the pandemic, that caused the tourism and the air travel industries to take a major hit.
Despite the downturn, Seychelles economic performance in the recent years has been strong so it has been predicted that the GDP will be able to recover by 2021 albeit subjected to post-pandemic recovery. Thus, this is also something that investors need to consider in terms of the economy and the global outlook when looking to set up an offshore company in the Seychelles.
Procedure of the Company Set-Up
As mentioned before, the process of setting up a company in the Seychelles is relatively easy and a fast process. Here is a brief overview of the procedure.
Requirements for Offshore Company Set-up
- At least 1 shareholder
- 1 Resident Director
- Company name registration copy
- A local legally registered address
Steps in Registering the Offshore Company
- Fill up the application form for registering, complete with your trading name, personal and company details, etc.
- Upload your documents inclusive of personal documents and business plan.
- Choose your payment methods and make your payment for the Seychelles company.
- Establishment of company.
With its political and economic stability, reputation for being a tax haven, and easier communication with the official language of business operations being English, these conditions make Seychelles an attractive location for the setting up of an offshore company. The ease of registering and the affordability of the fees involved have definitely made it stand out in terms of feasibility, however, there are still drawbacks to consider and appropriate evaluation to be carried out before reaching a final decision.
At Desfran, our team of expert consultants are here to provide you with our professional expertise regarding offshore services. Led by one of the world’s leading management teams, our experts draw on their wealth of knowledge to offer comprehensive management advice. We are aware of the latest developments and trends in the financial markets and are equipped to guide you to expand your business.
Request for a consultation with us today.