Seychelles Company

SEYCHELLES COMPANY 

Type of company for international Trade and Investment

The Seychelles International Business Company.

Restrictions on Trading

Cannot trade within the Seychelles or own real estate there. Cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, asset management (other than the company’s own assets) or any other activity that would suggest an association with the banking and insurance industries. A Seychelles IBC cannot provide registered office facilities in the Seychelles, or sell its shares to the public.

Powers of Company

A Seychelles incorporated Company has the same powers as a natural person.

Registered Office Required

Yes, must be maintained in the Seychelles at the office of a licensed Registered Agent.

Name Restrictions

Anything identical or similar to a company already incorporated. Anything that implies patronage of the Seychelles, or any other government, insurance, royal, imperial or any other name that may imply that a company intends to undertake a licensable or undesirable activity.

Language of Name and Corporate Documents

The name can be in any language, but must be accompanied by a translation in English or French. The documentation will either be in English, or it is possible to have bilingual documentation in English and Chinese or any other language accompanied by a translation in English or French.

Suffixes to Denote Limited Liability

The name of an IBC must end in one of the following: Limited, Corporation, Incorporated, Société Anonyme or their abbreviations. A wide variety of other suffixes such as BV, GmbH, and SARL may also be used.

Disclosure of Beneficial Ownership to Authorities

No.

SEYCHELLES COMPLIANCE

Authorized and Issued Share Capital

Seychelles IBCs are normally incorporated with an authorized share capital of US$100,000 with par value. The authorized share capital may be expressed in any currency. The minimum issued capital is either one share of no par value or one share of par value.

Classes of Shares Permitted

Bearer shares allowed

Yes, but not advisable due to strict compliance.

Seychelles IBC Act – Bearer Shares Amendments

the recently enacted IBC (Amendment) Act 2009 relating to bearer shares (the “Bearer Share Amendments”) issued by Seychelles IBCs (“IBCs”), companies incorporated under the International Business Companies Act 1994 (“IBC Act”). Bearer shares are issued to “bearer”, while “registered” shares are issued to a named person (who may be a nominee).

International bodies, including, in particular, the OECD and FATF, have been pushing offshore financial centres to adopt a tighter approach with respect to bearer shares, such that an offshore company’s registered agent at all times knows the identity of the company’s beneficial owners. While some offshore jurisdictions abolished bearer shares, others, such as the British Virgin Islands, introduced bearer share immobilisation requirements (ie. bearer shares are to be held by an approved custodian and cannot be held directly by the owner).

Seychelles has taken a more market-oriented approach, such that the Bearer Share Amendments do not require immobilisation, ie. a bearer share certificate may continue to beissued by the IBC and held directly by clients. Specifically, pursuant to the Bearer Share Amendments, the following now applies in respect of bearer shares issued by Seychelles IBCs:

1. NAME OF BEARER SHARE HOLDER TO APPEAR IN SHARE REGISTER

It is now a requirement that an IBC’s Share Register include the name and address of each bearer share holder as well as the name and address of each holder of registered shares.

An IBC’s Share Register, and shareholder names and addresses, are not filed with the Seychelles Government Registry. The IBC Act requires an IBC to keep its Share Register at its Registered Office or at such other place as the directors determine and the company shall inform its registered agent in Seychelles of the address of such other place.

The Bearer Share Amendments specify to the effect that a bearer share holder’s name must be stated in the Share Register, but there is no stipulation that this must be the beneficial owner. Accordingly, just as it is legally permissible to have a nominee registered share holder (who holds shares as nominee for and on behalf of an underlying beneficial owner), we can see no impediment to the use of a nominee bearer share holder. It remains a decision for each company owner as to whether they prefer to hold shares directly or via a nominee.

Importantly, whether or not a nominee bearer (or registered) share holder is used, pursuant to Seychelles law we are required to hold KYC (“know your client”) documentation (certified copy passport and proof of address) on each underlying beneficial owner as well as each director, shareholder and power of attorney holder of a Seychelles company.

2. NEW BEARER SHARE TRANSFER REQUIREMENTS

The position prior to the Bearer Share Amendments was that ownership of a bearer share was transferable by mere delivery of the bearer share certificate. The new position under the Bearer Share Amendments is that a bearer share is now transferable by delivery of the share certificate relating to such bearer share and notification of transfer. “Notification of transfer” is effected by delivery to the company’s registered agent in Seychelles of a written notice, signed by the transferor bearer shareholder, stating the name and address of the transferor, the name and address of the transferee and the date on which the certificate relating to the bearer share was delivered to the transferee.

Accordingly, notwithstanding delivery of a bearer share certificate to a new holder, a transfer of ownership of the share shall not be regarded as effective until “notification of transfer” (as defined above) is made to the IBC’s registered agent in Seychelles.

Upon receipt of the bearer share transfer notice, the Company’s registered agent in Seychelles shall cause:

• the name and address of the transferee to be entered in the Share Register as the holder of the relevant bearer share;
• to be entered in the Share Register, the date on which the transferor ceased to be the holder of the relevant bearer share, which shall be deemed to be the date on which the registered agent received notification of transfer.

PRACTICALITIES

The Bearer Share Amendments have no impact on a Seychelles IBC whose Memorandum and Articles of Association (“Memo & Arts”) prohibit the issue of bearer shares.

In respect of a Seychelles IBC whose Memo & Arts allows for registered or bearer shares:

a. if only registered shares are issued, the Bearer Share Amendments have no impact on registered shares but apply in respect of any bearer shares issued by the company;

b. if bearer shares are issued, the Bearer Share Amendments apply with immediate effect.

In summary, all bearer shares issued by Seychelles IBCs are now subject to the Bearer Share Amendments. Therefore, as set out in numbered paragraphs 1 and 2 above, the name and address of the holders of bearer shares must be entered in the company’s share register and the new transfer requirements apply.

Reflecting the previous law (the position prior to the Bearer Share Amendments), the Memo & Arts of all existing Seychelles IBCs whose Memo & Arts allow for registered or bearer shares state that bearer shares are transferrable merely by delivery of the share certificate. This is no longer the case. That is, pursuant to the Bearer Share Amendments and notwithstanding delivery of a bearer share certificate to a new holder, a transfer of ownership is not regarded as legally effective until notification of transfer is made to the company’s registered agent in Seychelles.

We therefore recommend, in respect of a Seychelles IBC whose Memo & Arts allows for the issuance of registered or bearer shares, that a replacement Memo & Arts be adopted by the company – which includes the new share register and transfer requirements relating to bearer shares. Obviously, this recommendation is particularly relevant in cases where bearer shares (rather than registered shares) have actually been issued.

Despite our recommendation, it is not mandatory to adopt a replacement Memo & Arts. However, it is essential for bearer share holders to note that the Bearer Share Amendments override a company’s existing Memo & Arts (in particular, as a matter of Seychelles law a bearer share transfer shall not be valid without the requisite transfer notification to the company’s registered agent).

If you wish to adopt a replacement Memo & Arts (compliant with the Bearer Share Amendments), we would be happy to arrange. Pricing is available on request.

Other Amendments

The IBC (Amendment) Act 2009 also introduces the following further amendments, all designed to enhance the attractiveness of the Seychelles IBC –

1. Provision for companies limited by guarantee and hybrid companies limited by both shares and guarantee (the IBC Act previously only allowed for companies limited by shares);

2. Country names to be allowed in IBC names;

3. Improved provisions relating to a change of Registered Agent;

4. Extending the post-striking off restoration period from 3 years to 10 years (where striking off was only for non-payment of annual licence fees);

5. Adding specific provision for an Official Search to be issued by the Registry (presently, a “basic” status report issued by the Registry is only available, or a RA can conduct a physical search and prepare its own search report);

2. Adding new sections providing for optional registration of mortgages and charges created by IBCs and providing for a register of charges –

• Keeping of a register of charges is optional.
• While registration of charges will provide publicly accessible confirmation that a charge has been created and registered, there is no adverse legal consequence to priorities of creditors resulting from not registering.

Taxation

An International Company is exempted from local taxation.

Licence Fee

Annual Licence Fee is US$100 irrespective of Authorised Capital.

Financial Statements Required

There is no requirement to file financial statements, but a company must keep records to reflect its financial position.

Directors

The minimum number of directors is one, who may be a natural person or a body corporate. They may be of any nationality and need not be resident in the Seychelles.

Company Secretary

A Seychelles IBC need not appoint a company secretary, although it is customary to do so. The secretary may be a natural person or body corporate, be of any nationality and need not be resident in the Seychelles.

Shareholders

The minimum number of shareholders is one.

What is included in the basic package: