Seychelles Special License Company (CSL) is a new entity introduced by the Seychelles Companies (Special Licenses) Act 2003. While it is more complex and more expensive than the traditional IBC, a CSL has a number of great advantages.
The most attractive feature of the Special License Company (CSL) is its ability to bypass foreign blacklisting by being a low-tax company (as opposed to a zero-tax company, like IBC). A CSL is also able to access and use the growing number of double tax avoidance treaties concluded by Seychelles. These treaty benefits are not accessible to IBC’s. Unlike an IBC, a CSL is formally considered tax-resident in Seychelles, which in turn allows for easier conduct of its business abroad, attracting less suspicion and scrutiny.
The CSL is formed under the general provisions of the “domestic” Seychelles Companies Act 1972. Its special tax regime and other features are prescribed by the Seychelles Companies (Special Licenses) Act 2003. A full text of this Act is available in our Downloads section.
Unlike an IBC, which is a zero-tax entity, a Special License Company is liable to 1,5% tax on its worldwide income. Apart from that, a CSL is exempt from any withholding taxes on dividends, interest and royalties, and from stamp duties on any property or share transfers and transactions.
Tax treaty benefits
Unlike an IBC, a CSL qualifies as “tax-resident” in Seychelles. Therefore it has access to a growing number of international Double Taxation Avoidance Treaties (DTA’s). Seychelles has DTA’s ratified with China, South Africa, Indonesia, Thailand, Oman, Botswana and Mauritius; such agreements are also signed with Belgium, Cyprus, Malaysia, Vietnam and Zimbabwe. Negotiations on Double Taxation Avoidance Treaties have been completed with Egypt, UAE, Russia, Bahrain, Czech Republic, Tunisia, Namibia and Kuwait.
Qualification as formal resident for tax purposes
A Seychelles CSL is also formally permitted to operate within the Republic of Seychelles. While it may seem to have a limited commercial value, this feature may be extremely useful for some international businesses. By placing some of its customer support services, parts of logistics, administration or technical services in Seychelles, a CSL may achieve some of its business goals, while at the same time enjoying unrivalled fiscal benefits. For those Special License Companies which would utilize such option, the law provides for further exemptions. In particular, CSL is exempted from duties on all imported equipment, necessary for its operation, and from the tax payments under the Social Security Act.
Special operational objects
A Special License Company is the appropriate vehicle if the proposed business requires specific regulation. In particular, the Companies (Special Licenses) Act 2003 prescribes that a CSL may be organized to undertake the business of investment management and advice, offshore banking, offshore insurance and re-insurance, investment services, holding, marketing, intellectual property and franchise, human resources, and it may operate as a headquarters or holding company. CSL is also the prescribed entity to operate under the Seychelles International Trade Zone License. The law also provides that a CSL may engage in any other business that has met the approval of the Seychelles International Business Authority. This cover-all provision effectively ensures that a CSL may also be used for any of the more traditional businesses – like international trading in goods and provision of services.
(!) Important note: although the general provisions of the Companies (Special Licenses) Act 2003 provide that a CSL may carry out the activities of offshore banking and insurance, engagement into these particular activities would require special additional licensing by the Central Bank or by other appropriate Government authority.
Creation of a Special License Company is NOT a formal, one-for-all process. It requires preparation of a detailed Application for the Seychelles International Business Authority (SIBA). This requires substantial amount of information from the client (beneficial owner) of the company.
Alongside several more formal documents, which we would normally be able to prepare independently, the CSL Application file must contain a business plan, indicating objectives of the company, the exact type of activity the company will carry out, a 3-year financial forecast, description of the markets and marketing strategy and details about the company capitalisation. This information can only be provided by the client.
For every beneficial owner, shareholder or director of the Company, a set of due diligence documents will have to be provided alongside the Application. Those include a certified copy of passport, proof of address, bank reference, and a curriculum vitae. Each of those individuals would also need to complete a Personal Application Form.
Upon review and approval of the CSL Application by SIBA, they would issue a Certificate of Approval. This preliminary certificate would enable the registration of the new Company by the Seychelles (domestic) Registrar of Companies. At this stage, the primary incorporation documents of the new company would go to the Registrar of Companies, for proper incorporation.
Upon issue of the Certificate of Incorporation by the Registrar, the new company would come into existence.
Immediately thereafter, based on the information already submitted earlier in the initial CSL Application, SIBA would issue the new company with the Special License, at which stage the new firm would become a proper Special License Company.
The creation of a Special License Company does not happen anonymously. During the Special License Application, the actual beneficial owners of the CSL must be identified. A detailed business plan and substantial personal details have to be submitted. This information remains on file with the Seychelles International Business Authority. However, none of this information ever becomes accessible to public, neither it can be divulged to any foreign governments. There are strict secrecy provisions in the Law, providing that all information gathered during the Special License Application remains strictly confidential.
Unlike many of its competitors, Seychelles is an independent country. As such, it is not sharing or reporting information to any overseas “principal state”, or organization. Seychelles is not subject to the EU Savings Tax Directive, as are some other offshore jurisdictions related to the EU member states (primarily UK and its overseas territories).
A Seychelles CSL is subject to the following government fees:
One-time application fee
Annual License fee
Annual return filing fee
These are in addition to the professional fees that would be charged by us for incorporation services, assistance with the processing of the Special License application, and company management services, as may be applicable
Where to start?
The CSL Application form, CSL Personal Application form and Application Guidelines are available on request. If a Special License Company is your choice, we suggest starting with a look at the Application Guidelines and the relevant forms. These are fairly straightforward and contain detailed instructions as to how they should be completed.
Main characteristics of the Seychelles Special License Companies
|Business tax in Seychelles||1.5% of worldwide income|
|Access to double-tax avoidance treaty benefits||Yes|
|Formal resident taxpayer status||Yes|
|May conduct business within Seychelles||Yes|
|Currency of capital||Any, except SCR. Usually USD.|
|Most effective authorized capital
(maximum amount at minimum duty)
|Usual authorized capital||USD 1`000, but can be any other amount.|
|Minimum paid-up capital||10% of the authorized capital|
|Net time to launch||2-4 weeks (depending on speed of client application)|
|Minimum number of directors||Two, can be non-resident or resident|
|Public register of directors||Yes|
|Minimum number of shareholders||Two|
|Public register of shares||No|
|Public disclosure of beneficial owners||No|
|Detailed business application procedure||Yes, confidential|
|Auditing of accounts||No|
|Filing of accounts||Required, not public|
|Filing of annual administrative return||Required, not public|
|Re-domicilation from other jurisdiction accepted||Yes|
Which one to choose – An IBC or a CSL?
A Comparison between the International Business Company and the Special Licence Company
With two offshore company types available in Seychelles, this is a very important question. Here are some general considerations. By no means they represent the final and absolute recommendation, but may prove useful as a general guideline.
Special License Company
The CSL would be the preferred choice for clients planning business transactions with counterparties who are located in high-tax countries with an intrusive regulatory environment. In such countries, fiscal countermeasures are possible against the traditional zero-tax companies (IBC`s), but are less likely against low-tax companies (CSL’s).
On the same note, if the business circumstances require proving that the company is actually a taxpayer in its country of registration, only a Special License Company would satisfy this condition. The CSL is also the right vehicle if clients expect to utilize the benefits of the double-tax avoidance treaties concluded by Seychelles. In perspective, a CSL is the appropriate choice when it`s important to demonstrate an image of a locally-based, tax-paying business entity, properly operating in the place where it was registered (Seychelles). Clearly, due to its more complex nature, CSL is more costly to create and maintain, but for some of those special circumstances it may be the best option.
International Business Company
The International Business Company is usually preferred by more relaxed clients whose personal or business circumstances allow them to be at relative ease from regulatory and fiscal scrutiny. Such clients would often be individuals who spend most or all of their time outside their home jurisdiction – for instance, management consultants, network engineers, software developers or other professionals who tend to travel between various countries on short-term assignments. Just as well, a clients` business may be purely international and not particularly tied-up to his home country – like many internet businesses are.
Similarly, if the company will only or mainly engage in business with other similar offshore companies (as is normal in international commodity trade), then an IBC is all you need. An IBC may also be sufficient for use by clients whose home country does not have the sophisticated “management and control” tax-rules – this is still the case in many countries of the world. And, finally, there is no need to use a sophisticated tax-planning instrument when there is no tax planning purpose – for example, when the company is simply used as a personal asset-protection vehicle to passively hold some property or investments.
In all these cases the simpler, cheaper IBC could be the best choice. The International Business Company pays lower government and administration fees, is not subject to the requirement of filing accounts and returns and does not require a complicated management structure, therefore is much cheaper to have and mantain.
Just in case, an IBC can be at any time transformed into a CSL.
Here is a comparison table, listing all the different characteristics of an IBC versus CSL.
IBC – CSL comparison table (distinctive features)
|Full name||International Business Company||Special License Company|
|Applicable corporate laws||International Business Companies Act 1994||Companies Act 1972
Companies (Special Licenses) Act 2003
|Rate of corporate taxation||0%||1.5%|
|Access to double taxation avoidance treaties||NO||YES|
|Qualifies as resident for tax purposes||NO||YES|
|Filing of detailed client application required||NO||YES|
|Corporate directors allowed||YES||NO|
|Minumum paid up capital||USD 1||10% of authorized capital|
|Annual government fees (minimum)||USD 100||USD 1000|
|Annual return filing fees||0||USD 200|
|Bearer shares permitted||NO||NO|
|Local company secretary required||NO||YES|
|Filing of accounts and returns required||NO||YES|
|Shelf companies available||YES||NO|
Formation & Registration Fees
Professional fee for assistance with CSL Application; Application fee to regulators (SIBA) inclusive of Government Tax; First Annual License fee payable to SIBA; Professional fee for provision of Registered Office & Registered Agent; Professional fee for provision of Resident Secretary (mandatory for a CSL); Incorporation Fee
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Nominee Director for Seychelles Special License Company
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Nominee Shareholder for Seychelles Special License Company
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Notarization & Apostille
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Bank Account for Seychelles Special License Company
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Courier Fees for Seychelles Special License Company
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