A tax haven is a place where certain taxes are collected at a low rate or not at all, for example, the Seychelles tax for an offshore company is zero. This encourages wealthy individuals and/or companies to establish themselves in areas that would otherwise be overlooked. Different jurisdictions tend to be havens for different types of taxes and for different categories of people and/or companies.

Formation of a Seychelles offshore company is permitted when the incorporated company does not conduct substantial business in Seychelles. This type of international business company [I.B.C] is known as a Non-Resident company.

Advantages

Forming a Seychelles offshore company can bring a number of benefits to individuals or companies incorporated under Seychelles offshore laws.

* Taxation: Businesses can be structured so that profits are realized in ways that minimize their overall tax liability.

* Simplicity: With the exception of regulated companies such as banks or other financial institutions, the formation of an offshore company in Seychelles is relatively simple to set up and maintain.

* Reporting: The level of information required by the business registrar varies from jurisdiction to jurisdiction.

* Asset Protection: It is possible to arrange assets and transactions in such a way that the assets are protected from future liabilities.

* Anonymity: When transacting on behalf of a private company, the name of the underlying principal may be left out of the documentation. Having said that, current anti-money laundering regulations often require banks and other professionals to review company structures. The documentation for the formation of offshore companies in Seychelles is relatively simple.

*Small Capitalization: Seychelles offshore company formation allows “small capitalization” rules for its IBC companies (except regulated entities such as banks and insurance companies) so that they can be incorporated with nominal capital.

* Financial Assistance: Seychelles offshore company formations are generally not prohibited from providing “financial assistance” for the acquisition of their own shares, thus avoiding the need for a “laundering” procedure in certain financial transactions.

Disadvantages

* Seychelles offshore company formation to conduct business in its jurisdiction of incorporation is generally prohibited. They are also not allowed to invest in Seychelles property.

* For regulatory reasons, there are certain restrictions on the type of business that Seychelles offshore company formation can be involved in. For example, it is quite common for there to be general prohibitions against offshore companies conducting banking business, insurance business or operating as a trust company.

* Due to the limited amount of publicly available information regarding offshore companies, there is often a high level of hidden costs at the administrative level.

For example, to open a bank account in the name of an offshore company, to comply with relevant anti-money laundering regulations, the bank will typically require large amounts of corporate documentation to be notarized in the jurisdiction of incorporation, and may require opinions from local authorities. attorneys in that jurisdiction as to the company’s ability and power to open and operate a bank account.

* Certain countries have “anti-tax haven” legislation that makes it difficult to conduct business in those countries using an offshore company. For example, French capital markets regulations prohibit the use of offshore companies as bond issuance vehicles.

* When a shareholder of an offshore company formation dies, it is usually necessary for the will to also be admitted for probate in Seychelles (or, if intestate, for letters of administration to be resealed in that jurisdiction), which which can increase the cost, delay and inconvenience in the administration of the decedent’s estate.

Characteristics of the formation of an offshore company in Seychelles

* Memorandum and articles of association or bylaws – these documents are fundamental to the existence of the company and detail the rights of the members, the objectives of the company and the internal processes of the company.

* Certificate of Incorporation: This is issued by the Registrar of Companies, and is proof that the company has been brought into existence. Other information may be needed to show that the business has not been liquidated or cancelled.

* Registrar Agent: It is normal for an agent to be appointed in the jurisdiction in which the company is incorporated for the purpose of handling official communications with the registrar.

* Registered office: This is the official address of a company, to which official documents are sent and legal notices are received. It is normal for the registrar to provide a registered office. A company may have other business and correspondence addresses.

* Members – These are the legal owners of the Seychelles offshore company formation. For administrative simplicity or anonymity, a corporate service provider may provide nominees who will hold shares on behalf of a beneficial owner and act on their instructions.

* Directors: The people who manage the routine affairs of the company. In many jurisdictions it is possible for companies to be directors of other companies. Corporate service providers in the Seychelles offshore jurisdiction will often provide directors.

In general, the company is considered to be resident for tax purposes in the place where decisions are made.

* Proprietary directors: In some cases it has been shown that formally appointed directors simply act as the alter ego of others, blindly following their instructions. In these cases, the courts have found that those instructing the nominee directors actually control the company, and that the nominee directors are merely approving decisions.

* Company Secretary – This is the person responsible for ensuring that the Seychelles offshore company formation complies with its legal obligations. Corporate service providers often provide this service.

* Legal Records: A business is required to keep records that establish certain information about the business. Mandatory records vary from jurisdiction to jurisdiction, as does the level of public access to the information contained in the records. Many jurisdictions require that records be kept within the jurisdiction in which the business is incorporated. Required records may include minutes of meetings, records of members, directors, officers, and positions.

* Bookkeeping: Directors are generally required to keep proper records. They may be required to prepare audited accounts. The specific requirements vary between jurisdictions and may depend on the nature of the company’s activity. For example, all banks will be required to prepare audited accounts, while a private investment firm may not have such an obligation.

Types of offshore company formation in Seychelles

To facilitate doing business in Seychelles, the authorities have allowed different types of company formation. Examples of offshore companies include the Limited Liability Company (LLC) and the International Business Company (IBC). The following types of companies are common in offshore jurisdictions:

* Company with share capital: These companies issue shares. Once the initial cost of a share (capital and premium) has been paid, shareholders have no further obligation to the company. Shares may, subject to company rules, be sold or transferred, and shareholders are entitled to enjoy the proceeds of the company or any proceeds of liquidation.

*Company limited by guarantee: The partners of the company are obliged to pay up to a maximum limit in case of insolvency of the company, being able to acquire certain rights against the company, such as the right to a dividend and the specific rights will be established in company rules. Membership can be terminated by death, and guarantee companies have been used for non-profit organizations. There are also sophisticated estate planning schemes that make use of guarantee companies.

* Protected cell companies: Some jurisdictions, for example Mauritius and Seychelles, allow cell companies, where individual assets and liabilities are segregated into “cells” such that the assets of one cell cannot be used to satisfy the liabilities of another cell. other. Cell companies are particularly used for general mutual funds or unit-linked insurance bonds.

Many offshore jurisdictions offer increasingly specialized forms of companies, as well as specialized trusts and partnerships, seeking to increase their market share.

Examples include limited duration partnerships, unlimited liability partnerships, partnerships limited by guarantee and one share capital, restricted purpose partnerships, and hybrid entities such as limited liability partnerships, which are more like real partnerships, and foundations, which are nominally trusts but are more akin to corporations than trusts.

Bind

The traditional method of company merger is for a company to acquire the assets of a subsidiary in its liquidation. This sometimes creates contractual difficulties and requires third parties to agree to the transfer of the liquidated company’s obligations. Some jurisdictions have addressed this problem by allowing companies to merge, forming a new combined entity, which represents a continuation of the businesses of each previous company.

transfer of companies

Some jurisdictions allow companies to change their address. They may do this to take advantage of particular features of the new jurisdiction, such as merger law or tax treaties with other countries. The law, both in the old and in the new jurisdiction, must allow the change of address. The business of the company is considered to continue without interruption on the change of address.