Compay - Special License
The Company with Special License (CSL) is in fact a Seychelles domestic company incorporated under the Companies Act 1972. The requirements of which is modified by provision of the Companies (Special License) Act 2003 (“the CSL Act”), under which it is issued with a special license.
Under this license the CSL benefits from a certain measure of shielding from public scrutiny, whilst being fully transparent it benefits from various fiscal concessions. Schedule 1 of the Act provides a list of purposes for which a license may be issued, although provisions exist for other purposes to be considered. However, the objects of the company have to be specific and limited to the approved purposes. All applications for a CSL must be submitted to SIBA, which processes and retains documents not meant to be in the public domain. Incorporation is actually with the Registrar of Companies, who issues the certificate, whilst SIBA issues the special license, upon receipt of confirmation of registration. A CSL must have at least two individuals, who will act as directors, and a resident secretary, (the CSP) who will accept service on behalf of the company. There are no provisions for corporate directors. All resolutions may be consented to in writing, telex, cable or e-mail. Annual returns are required to be submitted to the Authority.
An International Business Company (IBC) incorporated in Seychelles or a company incorporated outside Seychelles may register as a CSL.
Continuation of registration outside Seychelles is permitted, subject to any limitations in the memorandum and articles of association.
The CSL is liable to Seychelles corporate tax, levied under the Business Tax Act at the rate of 1.5% on its world-wide income. This treatment is different from the traditional approach of taxing only Seychelles-sourced income. There is no withholding tax on dividends, interest or royalties. A CSL will enjoy this low rate of tax for a period of ten years from the date of incorporation and thereafter. The CSL is resident in Seychelles for tax purposes. This is to be contrasted with the nil tax status of the IBC, which is a non-resident for tax purposes, provided its management control, registered office, company secretary are in Seychelles.
The CSL have substantial appeal (particularly to international groups and multinational corporations), as a tax-efficient vehicle for permitted uses, like an international holding company, a franchise company, a marketing services company, a management services company, a human resource services company, a company holding intellectual property, an investment services company, etc. The CSL also present overseas tax planning opportunities linked to Seychelles’ steadily developing Double Tax Avoidance Treaty (DTA) network. Go to our Double Taxation for list of countries with which Seychelles has signed and ratified double taxation agreements. Operations like manufacturing can be done overseas, but the tax residence will be in Seychelles.
The DTA and the CSL can be used for increased tax benefits for various other investments in countries like South Africa, China and Indonesia. Tax sparring is a feature of all the DTA's. The distinguishing feature of the South African treaty is the exemption from all withholding taxes, and that of the treaty with China is its low rate of withholding tax on dividends. In addition to the existing treaties with China, Indonesia and South Africa, Seychelles is actively pursuing negotiations with countries with which tax treaties are desirable, these include many OECD and EU member countries.
Under this license the CSL benefits from a certain measure of shielding from public scrutiny, whilst being fully transparent it benefits from various fiscal concessions. Schedule 1 of the Act provides a list of purposes for which a license may be issued, although provisions exist for other purposes to be considered. However, the objects of the company have to be specific and limited to the approved purposes. All applications for a CSL must be submitted to SIBA, which processes and retains documents not meant to be in the public domain. Incorporation is actually with the Registrar of Companies, who issues the certificate, whilst SIBA issues the special license, upon receipt of confirmation of registration. A CSL must have at least two individuals, who will act as directors, and a resident secretary, (the CSP) who will accept service on behalf of the company. There are no provisions for corporate directors. All resolutions may be consented to in writing, telex, cable or e-mail. Annual returns are required to be submitted to the Authority.
An International Business Company (IBC) incorporated in Seychelles or a company incorporated outside Seychelles may register as a CSL.
Continuation of registration outside Seychelles is permitted, subject to any limitations in the memorandum and articles of association.
The CSL is liable to Seychelles corporate tax, levied under the Business Tax Act at the rate of 1.5% on its world-wide income. This treatment is different from the traditional approach of taxing only Seychelles-sourced income. There is no withholding tax on dividends, interest or royalties. A CSL will enjoy this low rate of tax for a period of ten years from the date of incorporation and thereafter. The CSL is resident in Seychelles for tax purposes. This is to be contrasted with the nil tax status of the IBC, which is a non-resident for tax purposes, provided its management control, registered office, company secretary are in Seychelles.
The CSL have substantial appeal (particularly to international groups and multinational corporations), as a tax-efficient vehicle for permitted uses, like an international holding company, a franchise company, a marketing services company, a management services company, a human resource services company, a company holding intellectual property, an investment services company, etc. The CSL also present overseas tax planning opportunities linked to Seychelles’ steadily developing Double Tax Avoidance Treaty (DTA) network. Go to our Double Taxation for list of countries with which Seychelles has signed and ratified double taxation agreements. Operations like manufacturing can be done overseas, but the tax residence will be in Seychelles.
The DTA and the CSL can be used for increased tax benefits for various other investments in countries like South Africa, China and Indonesia. Tax sparring is a feature of all the DTA's. The distinguishing feature of the South African treaty is the exemption from all withholding taxes, and that of the treaty with China is its low rate of withholding tax on dividends. In addition to the existing treaties with China, Indonesia and South Africa, Seychelles is actively pursuing negotiations with countries with which tax treaties are desirable, these include many OECD and EU member countries.