Seychelles International Business Companies (“IBCs”)

Seychelles, an independent republic located in the western Indian Ocean some 1000kms north east of Mauritius, entered the International Offshore Financial centre arena in 1994. With its low annual fees, convenient time zone, political independence and English system of law and business, Seychelles has grown to become one of the 3 most popular Offshore Company registration locations.

 

Seychelles IBCs are International Business Companies incorporated, continued or re-registered under the International Business Companies Act 2016 (the “Act”), which replaced the International Business Companies Act 1994 (the “former Act”). While the Act retained many core features of IBCs under the former Act, including tax exemptions, cost-effectiveness, privacy and administrative ease, the Act is modern, comprehensive and provides a stronger framework for use of Seychelles companies as a vehicle for doing business or holding investments worldwide.

 

Competitive Advantages

 

Based on annual registrations, the Seychelles IBC is one of the most popular offshore companies worldwide. Attractive Seychelles IBC features and benefits include: 

  • Value for money – US$100 incorporation fee payable to the Registrar (irrespective of the amount of the company’s authorised share capital) and US$100 renewal fee payable annually to the Registrar;
  • Speed of incorporation and delivery – same day incorporations; 
  • Privacy and asset protection – no filing with the Registrar, and no public access to, details of shareholders or beneficial owners;
  • Ease of administration – no requirement for preparation, audit or filing of annual accounts;
  • Ease of operation – a minimum of 1 director and 1 shareholder, who may be a non-resident individual or body corporate; no AGM requirement and meetings of directors and members may be held outside Seychelles, including by telephone or other electronic means;
  • Exempt from Seychelles tax other than an annual renewal fee of US$100;
  • Ease of succession – No Seychelles court order or probate is required on the death of a foreign shareholder (unless the deceased shareholder also owned real estate in Seychelles);
  • Ease of opening bank accounts – Seychelles companies are acceptable to international banks;
  • Favourable time zone – Seychelles time zone (GMT+4) is convenient for European, Asian, African and Middle Eastern clients;
  • Stable and independent country – Seychelles has good political stability and a democratically elected government. 

IBC Uses 

 

A Seychelles IBC is a separate legal entity with limited liability and has perpetual existence. An IBC has the same powers as an individual, including the right to sue and be sued. IBCs are commonly used for: 

  • Holding of investments and assets, such as real estate, shares or intellectual property;
  • Commercial transactions and international trading operations;
  • Asset protection vehicles;
  • Consultancy and personal service companies.

At OCI we believe in giving you more for your money than would the average Offshore Company formation service. Hence included in the registration package for your Seychelles IBC is the following

 

Services:

  • Unlimited name availability inquiries
  • Advice from an experienced International Corporate Lawyer on how to structure your company
  • Preparation (overseen by a lawyer) of application to incorporate the company
  • Preparation (overseen by a lawyer) of the company’s memorandum of association
  • Preparation (overseen by a lawyer) of the company’s articles of association
  • Attending to filing incorporation request with the company registry
  • Attending to payment of government filing fees
  • One year’s Registered Agent service in the country of incorporation
  • One year’s Registered Office service in the country of incorporation
  • Mailing address in the country of incorporation
  • Delivery of Incorp pack by international courier (ie DHL/ Fedex/ TNT etc)
  • Unlimited free legal consultations for 12 months

Documents included in your Incorp pack:

  • Certificate of incorporation
  • 2 sealed/stamped copies of the company’s Memorandum of Association
  • 2 sealed/stamped copies of the company’s Articles of Association
  • Resolution appointing first director/s
  • Resolution appointing first shareholder/s
  • Up to 5 share certificates
  • Resolution to open a bank account
  • Resolution to rent an office
  • Resolution/s to engage a Phone, Internet & Website service provider
  • Resolution to hire a staff member/s
  • Resolution to appoint a company lawyer
  • Resolution to appoint a company accountant
  • Resolution appointing you as the company’s authorised representative in commercial negotiations
  • Resolution issuing a Power of Attorney in your favour
  • Agreement authorising you to represent the company in commercial negotiations
  • Power of attorney authorising you to sign documents on behalf of the company
  • Register of directors
  • Register of shareholders
  • Expression of wishes (ie an “Offshore” Will)
  • Lawyer authored User Guide (“How to Use Your Offshore Company”)

Price (all inclusive): $US 900

 

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): $1,300

 

If you’d like to know more about Seychelles IBCs please see below “SEYCHELLES OVERVIEW” or Contact Us

If you’d like to order a Seychelles IBC Click Here

 

Please also check out our Package Deals

 

SEYCHELLES OVERVIEW

 

1.1        The Republic of Seychelles is an independent country within the Commonwealth. Seychelles gained its independence from Great Britain in 1976, having been a British colony since 1812. With a population of 93,000, Seychelles comprises a group of some 115 islands in the northern Indian Ocean, most of which are situated between 4 and 5 degrees south of the equator.

 

1.2        Seychelles is a multi-party democracy with good political stability. The country has a hybrid legal system based on English common law and French civil law. Seychelles has comprehensive and modern corporate and financial services legislation, which is heavily derived from common law and comparable laws in prominent international financial services jurisdictions.

 

1.3        The Seychelles economy is primarily based on tourism, commercial fishing and a thriving offshore financial services industry. Encouraged by favourable tax policies, inward investment has increased significantly over recent years, especially in the financial services sector and the luxury hotel and resort industry.

 

1.4        Since the early 1990s Seychelles has grown to become a leading offshore financial centre in the global corporate services market. The Seychelles IBC has been the dominant financial services product for Seychelles. The Seychelles Financial Services Authority (“FSA”) serves as the Registrar of International Business Companies (the “Registrar”) under the Act. There are around 70 Seychelles service providers licensed by the FSA to provide international corporate services (including IBC formation and Registered Agent services).

 

1.5        The success of the Seychelles IBC has paved the way for other value-added financial services products, including CSLs (Companies Special Licence). CSLs are low-tax tax-resident companies, able to access the growing network of Seychelles double taxation avoidance agreements (DTAs).

 

1.6        Seychelles is also experiencing increasing market demand in its other financial services products, including tax-exempt trusts, foundations and mutual fund structures. The Seychelles Securities Exchange (Trop-X) is seeing growing securities business, capitalising on Seychelles’ commercial, strategic and geographical advantages as a gateway for African and Asian markets. Seychelles’ sustained success as an international financial centre has been achieved by striking an effective balance between sound regulation and product attractiveness. Seychelles has in place international-standard anti-money laundering and prevention of terrorism legislation.

 

2.         TYPES OF IBC

 

2.1        An IBC must be incorporated or continued as either a company limited by shares, a company limited by guarantee or a company limited by shares and guarantee (section 6(1) of the Act and see paragraphs 2.2 to 2.4 below).

 

2.2        A company limited by shares is a company: (i) whose memorandum limits the liability of all its members to the amount (if any) unpaid on the shares respectively held by its members; and (ii) which is incorporated with a share capital comprising par value shares or authorised to issue no par value shares (section 2 of the Act).

 

2.3        A company limited by guarantee is a company whose memorandum limits the liability of all its members to a fixed amount which each member thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up (section 2 of the Act).

 

2.4        A company limited by shares and guarantee is a company: (i) whose memorandum limits the liability of one or more of its members to a fixed amount which each member thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up; (ii) whose memorandum limits the liability of one or more its members to the amount (if any) unpaid on the shares respectively held by its members; and (iii) which is incorporated with a share capital comprising par value shares or authorised to issue no par value shares (section 2 of the Act).

 

2.5        An IBC may be incorporated or continued as a protected cell company (“PCC”): (i) with the prior written consent of the FSA under section 221 of the Act; and (ii) if its memorandum provides that it is a protected cell company (see sections 6(2)(a) and 7 of the Act). part XIII of the Act provides comprehensive provisions relating to PCCs. In essence, PCCs are companies whose assets and liabilities may be attributed to a particular separate “cell” of the PCC or to the PCC itself. A PCC can, for example, facilitate the continuity of different businesses, while legally isolating the assets and risks attached to each business within one or more of the company cells. The PCC concept therefore provides for statutory ring-fencing of assets, such that a principal benefit of PCCs is in the segregation of assets and liabilities within separate cells. The rights of creditors are limited to the assets of the cell of which they are creditors. PCCs are commonly used for mutual fund or captive insurance purposes.

 

2.6        An IBC may be incorporated or continued as a limited life company. An IBC is a limited life company if its memorandum includes a provision that the company shall be wound up and dissolved upon: (i) the expiration of a fixed period of time; or (ii) the bankruptcy, death, expulsion, insanity, resignation or retirement of any member of the company; or (iii) the happening of some other event which is not the expiration of a fixed period of time (see sections 6(2)(b) and 8 of the Act).

 

3.         DIRECTORS

 

3.1        Subject to any modifications or limitations in its memorandum or articles: (i) the business and affairs of an IBC shall be managed by, or under the direction or supervision of, the directors of the company; and (ii) the directors of a company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the company (section 128 of the Act).

 

3.2        Subject to the provisions of the Act, an IBC shall at all times have at least one director, which requirement does not apply during the period between the incorporation of the company and the appointment of its first directors (section 130 of the Act).

 

            Eligibility of directors

 

3.3        Subject to section 133(2) of the Act (see paragraph 3.4 below), the IBC’s memorandum and articles and to the provisions of the International Corporate Service Providers Act 2003, a director of an IBC shall be an individual or a body corporate (section 133(1) of the Act). There is no requirement for an IBC director to be a Seychelles resident, i.e. a director may be a foreign national and may reside outside Seychelles.

 

3.4        Section 133(2) of the Act: The following persons shall not be a director of an IBC:

 

(a)        an individual who is: (i) a minor; (ii) an incapacitated adult; or (iii) an undischarged bankrupt;

 

(b)        a body corporate which is dissolved or has commenced winding up;

 

(c)        a person who is disqualified, under this Act, any other written law or by an order of the Supreme Court of Seychelles, from being a director; or

 

(d)        a person who, in respect of a particular company, is prohibited by the memorandum or articles from being a director of the company.

 

Appointment of directors

 

3.5        The subscriber(s) to an IBC’s memorandum or a majority of them shall, within nine months of the date of incorporation of the company, appoint the first director or directors of the company (section 134(1) of the Act). The subscriber is typically the company’s Registered Agent in Seychelles and is not required to take shares in the company. The subscriber has no power other than to appoint the company’s first director(s).

 

3.6        Section 134(2) of the Act: Director(s) to be appointed subsequent to the appointment of the first director(s) may be appointed:

 

(a)        unless the company’s memorandum or articles provide otherwise, by the members by ordinary resolution; or

 

(b)        where permitted by the company’s memorandum or articles, by a resolution of the directors.

 

3.7        A director holds office until his successor takes office or until his earlier death, resignation or removal (section 134(6) of the Act).

 

            Resignation of directors

 

3.8        A director of an IBC may resign his office by giving written notice of his resignation to the company and the resignation has effect from the date the notice is received by the company or from such later date as may be specified in the notice (section 138(1) of the Act). A director of a company shall resign forthwith if he is, or becomes, prohibited to act as a director under section 133 of the Act (section 138(2) of the Act).

 

            Removal of directors

 

3.9        Subject to the company’s memorandum or articles, a director of a company may be removed from office by resolution of the members of the company (section 137(1) of the Act). Where permitted by the company’s memorandum or articles, a director of a company may be removed from office by a resolution of the directors (section 137(4) of the Act).

 

Register of Directors

 

3.10      Section 150(1) of the Act: An IBC is required to keep at its registered office in Seychelles a Register of Directors containing:

 

(a)        the name and address of each person who is a director or alternate director of the company and of any person who has been nominated as a reserve director of the company, identifying whether the person is a director, alternate director or reserve director;

 

(b)        the date on which each person whose name is entered in the register was appointed as a director or alternate director, or nominated as a reserve director, of the company;

 

(c)        the date on which each person named as a director or alternate director ceased to be a director or alternate director of the company; and

 

(d)        the date on which the nomination of any person nominated as a reserve director ceased to have effect.

 

3.11      A company must ensure that the information required to be kept in its Register of Directors is accurate and up-to-date. The Register of Directors may be in such form as the directors approve, but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents (e.g. a PDF or Word version is sufficient). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the Register of Directors.

 

Filing of Register of Directors with the Registrar

 

3.12      A company is required, within 30 days of the appointment of its first director(s) (or within 30 days of its continuation as or conversion into a company under the Act), to file a copy of its Register of Directors for registration by the Registrar (section 152(1) of the Act).

 

3.13      A company that has filed for registration by the Registrar a copy of its Register of Directors shall, within 30 days of any change in the content of its Register of Directors, file for registration by the Registrar a copy of its updated Register of Directors containing the change or changes (section 152(2) of the Act).

 

3.14      An IBC may omit from a copy Register of Directors filed with the Registrar, particulars of former directors who ceased to be directors prior to the date of first filing (section 390(2) of the Act).

 

3.15      Registers of Directors filed with the Registrar are not accessible by public inspection at least until 1 November 2018 (section 390(3) of the Act).

 

Alternate directors

 

3.16      Subject to the memorandum and articles of a company, a director of the company may appoint an ‘alternate’ to: (i) exercise the appointing director’s powers; and (ii) carry out the appointing director’s responsibilities, in relation to the taking of decisions by the directors in the absence of the appointing director (section 139(1) of the Act).

 

Reserve directors

 

3.17      Where a company has only one member who is an individual and that member is also the sole director of the company, notwithstanding anything contained in the memorandum or articles, that sole member/director may, by instrument in writing, nominate a person who is not disqualified from being a director of the company as a reserve director of the company to act in the place of the sole director in the event of his death (section 135 of the Act). The nomination of a person as a reserve director of the company ceases to have effect if:

 

(a)        before the death of the sole member/director who nominated him: (i) the person resigns as reserve director; or (ii) the sole member/director revokes the nomination in writing; or

 

(b)        the sole member/director who nominated him ceases to be the sole member/director of the company for any reason other than his death.

 

De facto directors

 

3.18      Section 2 of the Act introduces a shadow director concept in that it defines “director” to include a person occupying or acting in the position of director by whatever name called. Without limiting the broadness of the definition of “director” under section 2, a person, referred to as a “de facto director”, who has not been formally appointed as a director of a company but who occupies the position of director, or who manages, directs or supervises the business and affairs of the company, shall be treated as a director of the company (section 131(1) of the Act).

 

3.19      A person shall not be a de facto director of a company by reason only of the fact that he or she gives advice in a professional capacity to the company or any of the directors of it (section 131(3) of the Act). If at any time a company does not have a director who has been formally appointed as such, any de facto director is deemed to be a director of the company for the purposes of this Act (section 131(4) of the Act).

 

Delegation of directors’ powers

 

3.20      Section 132(1) of the Act: Subject to any restrictions in the memorandum or articles of the company, the board of a company may delegate to a committee of directors, a director or employee of the company, or to any other person, any one or more of its powers, except that the directors have no power to delegate the following powers:

 

(a)        to approve distributions to members by the company;

 

(b)        to amend the memorandum or articles;

 

(c)        to designate committees of directors;

 

(d)        to delegate powers to a committee of directors;

 

(e)        to appoint or remove directors;

 

(f)         to appoint or remove an agent;

 

(g)        to approve a plan or merger, consolidation or arrangement; or

 

(h)        to approve the company’s voluntary winding up and dissolution.

 

3.21      A board that delegates a power is responsible for the exercise of the power by the delegate as if the power had been exercised by the board, unless the board: (i) believed on reasonable grounds at all times before the exercise of the power that the delegate would exercise the power in conformity with the duties imposed on directors of the company by the Act and the company’s memorandum and articles; and (ii) has monitored, by means of reasonable methods properly used, the exercise of the power by the delegate (section 132(2) of the Act).

 

Directors’ duties

 

3.22      Subject to section 145 of the Act (see paragraphs 3.23 and 3.24 below), a director, in exercising his powers and performing his duties, shall: (i) act in accordance with the company’s memorandum and articles; (ii) act honestly and in good faith and in what the director believes to be in the best interests of the company; and (iii) exercise the care, diligence and skill that a reasonably prudent person would exercise in the same circumstances (section 144 of the Act).

 

3.23      A director of a company that is a wholly-owned subsidiary may, when exercising powers or performing duties as a director, if expressly permitted to do so by the memorandum or articles of the company, act in a manner which he believes is in the best interests of that company’s parent even though it may not be in the best interests of the company (section 145(1) of the Act).

 

3.24      A director of a company that is a subsidiary, but not a wholly-owned subsidiary, may, when exercising powers or performing duties as a director, if expressly permitted to do so by the memorandum or articles of the company and with the prior agreement of the members, other than its parent, act in a manner which he believes is in the best interests of that company’s parent even though it may not be in the best interests of the company (section 145(2) of the Act).

 

Disclosure of interest

 

3.25      Where a director of a company has an interest in a transaction entered into or to be entered into by the company which to a material extent conflicts or may conflict with the interests of the company, the director shall, within 7 days after becoming aware of the fact that he has such an interest, disclose the interest to the board of the company (section 148(1) of the Act), provided that a director of a company is not required make such disclosure if: (i) the transaction or proposed transaction is between the director and the company; and (ii) the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms and conditions (section 148(2) of the Act).

 

3.26      Section 149(1) of the Act: A transaction entered into by a company in respect of which a director is interested is voidable by the company unless the director’s interest was: (i) disclosed to the board in prior to the company entering into the transaction; or (ii) not required to be disclosed (see paragraph 3.25 above).

 

3.27      Notwithstanding section 149(1) of the Act (see paragraph 3.26 above), a transaction entered into by a company in respect of which a director is interested is not voidable by the company if: (i) the material facts of the interest of the director in the transaction are known by the members entitled to vote at a meeting of members and the transaction is approved or ratified by a resolution of members; or (ii) the company received fair value for the transaction (section 149(2) of the Act).

 

3.28      Subject to the memorandum and articles, a director of a company who is interested in a transaction entered into or to be entered into by the company may: (i) vote on a matter relating to the transaction; (ii) attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and (iii) sign a document on behalf of the company, or do any other thing in his capacity as a director, that relates to the transaction (section 149(4) of the Act).

 

Meetings of directors

 

3.29      Subject to the company’s memorandum or articles, the directors of a company may meet at such times and in such manner and places within or outside Seychelles as they may determine to be necessary or desirable (section 153(1) of the Act). Subject to the company’s memorandum and articles, any one or more directors may convene a meeting of directors (section 153(2) of the Act).

 

3.30      A director shall be deemed to be present at a meeting of directors if: (i) the director participates by telephone or other electronic means; and (ii) all directors participating in the meeting are able to hear each other (section 153(3) of the Act). The quorum for a meeting of directors is that fixed by the company’s memorandum or articles but, where no quorum is so fixed, a meeting of directors is properly constituted for all purposes if at the commencement of the meeting one half of the total number of directors are present in person or by alternate (section 153(4) of the Act).

 

Notice of meeting of directors

 

3.31      Subject to a requirement in a company’s memorandum or articles for a longer notice period, a director shall be given not less than 2 days’ notice of a meeting of directors (section 154(1) of the Act). However, subject to a company’s memorandum or articles, a meeting of directors held in contravention of the notice requirement under section 154(1) is valid if all of the directors, or such majority thereof as may be specified in the memorandum or articles entitled to vote at the meeting, have waived the notice of the meeting; and, for this purpose, the presence of a director at the meeting shall be deemed to constitute waiver on his part (section 154(2) of the Act). The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting (section 154(3) of the Act).

 

Resolutions of directors

 

3.32      A resolution of directors may be passed at a meeting of directors or, subject to the memorandum and articles, as a written resolution (section 155(1) of the Act).

 

3.33      Subject to a company’s memorandum and articles, a resolution of directors is passed at a meeting of directors by a majority of the votes cast by directors who are present at the meeting and entitled to vote on the resolution (section 155(2) of the Act). A written resolution is a resolution consented to in writing or by telex, telegram, cable or other written electronic communication, without the need for any notice: (i) by such majority of the votes of the directors entitled to vote on the resolution as may be specified in the memorandum or articles; or (ii) in the absence of any provision in the memorandum or articles, by all of the directors entitled to vote on the resolution (section 155(3) of the Act).

 

Keeping of minutes and resolutions of directors

 

3.34      A company is required to keep: (i) minutes of all meetings of its directors; (ii) minutes of all meetings of any committees of its directors; (iii) copies of all written resolutions consented to by its directors; and (iv) copies of all written resolutions consented to by any committees of its directors (together referred to as “minutes and resolutions of directors”) (section 156(1) of the Act). Minutes and resolutions of directors shall be kept for at least seven years from the date of the meeting or written resolution (section 156(2) of the Act).

 

3.35      A company is required to keep its minutes and resolutions of directors at such place inside or outside of Seychelles as the directors shall determine (section 157(1) of the Act). Where a company does not keep its minutes and resolutions of directors at its registered office, it shall notify in writing its Registered Agent of the physical address of the place at which its minutes and resolutions of directors are kept (section 157(2) of the Act). Where there is a change in the place at which its minutes and resolutions of directors are kept, a company shall, within 14 days of the change, notify in writing its Registered Agent of the physical address of the place at which its minutes and resolutions of directors are kept (section 157(3) of the Act). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the minutes and resolutions of directors.

 

4.         MEMBERS

 

4.1        An IBC shall at all times have one or more members (section 99(1) of the Act), but that requirement does not apply during the period from the incorporation of the company to the appointment of its first directors (section 99(2) of the Act).

 

4.2        Subject to the company’s memorandum and articles, a member of an IBC may be an individual or a body corporate. The Act does not require a member to be resident in Seychelles.

 

4.3        There is no requirement for the name or other particulars of a member to be filed with the Registrar or any other governmental body in Seychelles. Accordingly, details of IBC members are not publicly accessible.

 

4.4        The Act provides for two types of members, namely, shareholders and guarantee members. A “shareholder”, in relation to a company (i.e. a company limited by shares or a company limited by shares and guarantee), means a person whose name is entered in the company’s Register of Members as the holder of one or more shares, or fractional shares, in the company (section 2 of the Act). A “guarantee member”, in relation to a company (i.e. a company limited by guarantee or a company limited by shares and guarantee), means a person: (i) being a member whose liability in his capacity as such a member is limited by the company’s memorandum to the amount which he thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up; and (ii) whose name is entered in the company’s Register of Members as a guarantee member (section 2 of the Act).

 

4.5        Unless prohibited under a company’s memorandum or articles, a minor or an incapacitated adult may be a member of a company (section 101(1) of the Act), provided that if a company’s memorandum or articles does not prohibit a minor or incapacitated adult from being a member, no shares shall be issued to a minor or incapacitated adult unless one or more persons (a “representative”) are legally entitled to, and are willing to, represent the interests of the minor or incapacitated adult in respect of exercising any voting or other rights attached to the shares for and on behalf of the minor or incapacitated adult (section 101(2) of the Act). Nothing in section 101 of the Act prevents shares in a company from being held by a person in a trustee or guardian capacity as a member for and on behalf of a minor or incapacitated adult.

 

4.6        A member of a limited company has no liability, as a member, for the liabilities of the company (section 102(1) of the Act). The liability of a shareholder to the company, as shareholder, is limited to: (i) any amount unpaid on a share held by the shareholder; (ii) any liability expressly provided for in the memorandum or articles of the company; and (iii) any liability to repay a distribution under section 72(1) (where a distribution by a company has been made to a member and the company did not, immediately after the distribution, satisfy the solvency test) (section 102(2) of the Act).

 

Register of Members

 

4.7        Section 104(1) of the Act: An IBC is required to keep at its registered office in Seychelles a Register of Members containing:

 

(a)        the name and address of each person who holds any shares in the company;

 

(b)        the number of each class and series of shares held by each shareholder;

 

(c)        the name and address of each person who is a guarantee member of the company;

 

(d)        the date on which the name of each member was entered in the Register of Members; and

 

(e)        the date on which any person ceased to be a member.

 

4.8        A company must ensure that the information required to be kept in its Register of Members is accurate and up-to-date. The Register of Members may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents (e.g. a PDF or Word version is sufficient). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the Register of Members.

 

4.9        Under section 106 of the Act, a listed company (as defined in the Securities Act) may apply in writing to the Registrar for approval to keep its Register of Members at a location in Seychelles other than its registered office. The Registrar may in its absolute discretion approve or decline such an application by a listed company or impose such conditions as it may think fit in relation to approving any such application.

 

Resolutions

 

4.10      Subject to the Act and to the company’s memorandum or articles, the exercise by the members of a company of a power which is given to them under the Act or the memorandum or articles shall be by a resolution: (i) passed at a meeting of members held in accordance with this Sub-Part III of Part V of the Act; or (ii) passed as a written consent resolution in accordance with section 122 of the Act (section 109 of the Act).

 

4.11      An ordinary resolution of members of a company means a resolution passed by a simple majority. A resolution passed at a meeting on a show of hands is passed by a simple majority if it is passed by in excess of half of the members who, being entitled to do so, vote in person or by proxy on the resolution (section 110(2) of the Act). A resolution passed on a poll taken at a meeting is passed by a simple majority if it is passed by members representing in excess of half of the total votes of members who, being entitled to do so, vote in person or by proxy on the resolution (section 110(3) of the Act). A written resolution is passed by a simple majority if it is passed in accordance with this Sub-Part by members representing in excess of half of the total votes of members entitled to vote on the resolution (section 110(4) of the Act). However, section 111 of the Act states that section 110 does not preclude a company’s memorandum or articles from providing that all or certain ordinary resolutions are to be passed by a higher majority of votes than a simple majority.

 

4.12      A special resolution of the members of a company means a resolution passed by not less than a two-thirds majority (section 112 of the Act). However, section 113 of the Act states that section 112 does not preclude a company’s memorandum or articles from providing that all or certain special resolutions are to be passed by a higher majority of votes than a two-thirds majority.

 

Meetings of members

 

4.13      Subject to the company’s memorandum and articles, a meeting of the members of a company may be held at such time and in such place, within or outside Seychelles, as the convener of the meeting considers appropriate (section 114(1) of the Act).

 

4.14      Subject to any limitations in a company’s memorandum and articles, a meeting of the members of the company may be convened at any time by any of the following persons: (i) the directors of the company; or (ii) such person or persons as may be authorised by the memorandum or articles to call the meeting (section 114(2) of the Act). Subject to a provision in a company’s memorandum or articles for a lesser percentage, the directors shall call a meeting of the members of the company if requested in writing to do so by members entitled to exercise at least 20 percent of the voting rights in respect of the matter for which the meeting is requested (section 114(3) of the Act).

 

4.15      Subject to a requirement in a company’s memorandum or articles to give longer notice, a person or persons convening a meeting of the members shall give to those persons whose names, on the date the notice is given, appear as members in the Register of Members and are entitled to vote at the meeting: (i) in the case of a meeting for the passing of a special resolution, not less than 21 days’ notice in writing; and (ii) in the case of a meeting other than as referred to in paragraph (i), not less  than 7 days’ notice in writing (section 115(1) of the Act).

 

4.16      Notwithstanding section 115(1) of the Act (see paragraph 4.15 above), and subject to a company’s memorandum or articles, a meeting of members held in contravention of the requirement to give notice is valid if members holding a ninety per cent majority, or such other majority as may be specified in the memorandum or articles, of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a member at the meeting shall be deemed to constitute a waiver on his part (section 115(2) of the Act).

 

4.17      The inadvertent failure of the convener or conveners of a meeting of members to give notice of the meeting to a member, or the fact that a member has not received the notice, does not invalidate the meeting (section 115(3) of the Act).

 

4.18      The quorum for a meeting of the members of a company for the purposes of a resolution of members is that fixed by the memorandum or articles but, where no quorum is so fixed, a meeting of members is properly constituted for all purposes if at the commencement of the meeting there are present, in person or by proxy, members entitled to exercise at least fifty percent of the votes (section 116 of the Act).

 

4.19      Subject to a company’s memorandum or articles, a member shall be deemed to be present at a meeting of members if: (i) the member participates by telephone or other electronic means; and (ii) all members participating in the meeting are able to hear each other (section 117 of the Act).

 

Keeping of minutes and resolutions of members

 

4.20      A company is required to keep: (i) minutes of all meetings of its members; (ii) minutes of all meetings of any class of its members; (iii) copies of all written resolutions consented to by its members; and (iv) copies of all written resolutions consented to by any class of its members (together referred to as “minutes and resolutions of members”) (section 125(1) of the Act). Minutes and resolutions of members shall be kept for at least seven years from the date of the meeting or written resolution, as applicable (section 125(2) of the Act).

 

4.21      A company is required to keep its minutes and resolutions of members at such place inside or outside of Seychelles as the directors shall determine (section 126(1) of the Act). Where a company does not keep its minutes and resolutions of members at its registered office, it shall notify in writing its Registered Agent of the physical address of the place at which its minutes and resolutions of members are kept (section 126(2) of the Act). Where there is a change in the place at which its minutes and resolutions of members are kept, a company shall, within 14 days of the change, notify in writing its Registered Agent of the physical address of the place at which its minutes and resolutions of members are kept (section 126(3) of the Act). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the minutes and resolutions of members.

 

5.         SHARES

 

5.1        Subject to a company’s memorandum and articles, a share may be issued as a par value share or a no par value share (section 46(1) of the Act), but a company cannot have a share capital consisting of shares which include par value shares and no par value shares (section 46(2) of the Act).

 

5.2        The shares in a company having a share capital divided into shares must each be distinguished by an appropriate number except that if at any time all the issued shares in the company or all the issued shares in the company of a particular class are fully paid up and carry the same rights in all respects, none of those shares need to have a distinguishing number (section 44 of the Act). Subject to its memorandum and articles, a company may issue a class of shares in one or more series (section 45 of the Act).

 

5.3        Subject to a company’s memorandum and articles, a par value share may be issued in any currency (section 46(3) of the Act). Subject to its memorandum and articles, a company may issue fractional shares (section 47(1) of the Act).

 

5.4        The Act allows for the creation of different classes of shares, but the rights, privileges, restrictions and conditions attaching to each class must be specified in the memorandum. In the absence of express rights to the contrary being set out in a company’s memorandum, section 43(1) of the Act specifies the ‘default’ rights conferred by a share on its holder, namely: (i) the right to one vote at a meeting of the members of the company or on any resolution of the company’s members; (ii) the right to an equal share in any dividend paid; and (iii) the right to an equal share in the distribution of the surplus assets of the company (together the “standard share rights”).

 

5.5        However, pursuant to section 43(2) and (3) of the Act, if expressly authorised to do so by its memorandum, a company may:

 

(a)        issue more than one class of shares;

 

(b)        issue shares subject to terms that negate, modify or add to the standard share rights;

 

(c)        issue shares which are redeemable;

 

(d)        issue shares that confer no rights, or preferential rights, to distributions;

 

(e)        issue shares that confer special, limited or conditional rights, including voting rights;

 

(f)         issue shares that confer no voting rights;

 

(g)        issue shares that participate only in certain assets of the company; or

 

(h)        issue shares that are convertible from one class or series to another class or series, in the manner specified in the memorandum or articles.

 

Bearer shares prohibited

 

5.6        Section 48 of the Act provides that an IBC shall not, and has no power to:

 

(a)         issue a bearer share;

 

(b)        convert a registered share into a bearer share;

 

(c)         exchange a registered share for a bearer share; or

 

(d)        convert any other securities into, or exchange any other securities for, bearer shares.

 

Issue of shares

 

5.7        An IBC may issue registered shares, which are shares issued to a named person. Subject to the Act and to the company’s memorandum and articles, shares in a company may be issued, and options to acquire shares in a company granted, at such times, to such persons, for such consideration and on such terms as the directors may determine (by resolution) (section 49 of the Act).

 

5.8        Subject to section 50(2) and (3) of the Act (see paragraphs 5.9 and 5.10 below), a share may be issued for consideration (payment) in any form, including money, a promissory note, or other written obligation to contribute money or property, immovable property, movable property (including goodwill and knowhow), services rendered or a contract for future services (section 50(1) of the Act).

 

5.9        Section 50(2) of the Act: The consideration (payment) for a par value share shall not be less than the par value of the share, subject to section 55 of the Act (which provides for the rarely invoked power to issue shares for a consideration less than par value subject to certain requirements including approval by resolution of the members and sanction by the Supreme Court of Seychelles).

 

5.10      Subject to any provision to the contrary in its memorandum or articles, a company may: (i) issue bonus shares, partly paid shares and nil paid shares; and (ii) accept payment of consideration for a share in such installment amounts and at such times after issue of the share as the company may approve (section 50(3) of the Act).

 

5.11      If a share is issued in contravention of section 50(2) of the Act (i.e. for a consideration less than the par value), the person to whom the share is issued is liable to pay to the company an amount equal to the difference between the issue price and the par value (section 50(4) of the Act).

 

5.12      Section 52 of the Act: Before issuing shares (other than bonus shares) for a consideration other than money (whether in whole or in part), the directors shall pass a resolution stating:

 

(a)        the amount to be credited for the issue of the shares;

 

(b)        their determination of the reasonable present cash value of the non-money consideration for the issue; and

 

(c)        that, in their opinion, the present cash value of the non-money consideration and money consideration (if any) for the issue is not less than the amount to be credited for the issue of the shares.

 

5.13      Where a par value company issues a par value share, the consideration in respect of the share constitutes share capital to the extent of the par value and the excess constitutes surplus (section 50(5) of the Act). Subject to any limitations in its memorandum or articles, where a no par value company issues a no par value share, the consideration in respect of the share constitutes share capital to the extent designated by the directors and the excess constitutes surplus, except that the directors shall designate as share capital an amount of the consideration that shall be at least equal to the amount that the share is entitled to as a preference, if any, in the assets of the company upon its liquidation (section 50(6) of the Act).

 

5.14      A share is deemed to be issued when the name of the shareholder is entered in the issuing company’s Register of Members (section 53 of the Act).

 

5.15      The issue by a company of a share that: (i) increases a liability of a person to the company; or (ii) imposes a new liability on a person to the company, is void if that person, or an authorised agent of that person, does not agree in writing to becoming the holder of the share (section 54 of the Act).

 

5.16      Pre-emptive rights in relation to shares do not automatically apply under the Act. The pre-emptive rights provisions under section 57 of the Act or different pre-emptive right provisions only apply where the memorandum or articles of the company expressly provide for same.

 

5.17      A company shall state in its articles the circumstances, if any, in which share certificates shall be issued. If a company issues share certificates, the certificates: (i) shall, subject to the company’s memorandum and articles, be signed by at least one director of the company or such other person who may be authorised by resolution of directors to sign share certificates; or (ii) shall be under the common seal of the company, with or without the signature of any director of the company, and the articles may provide for the signatures or common seal to be facsimiles (section 58 of the Act).

 

5.18      With respect to the issue of shares in a company, there is no requirement for any filing or notification to the Registrar or any other Seychelles Government office. By virtue of the Act (section 362 of the Act), all transactions in respect of IBC shares (including the issue of shares) are exempt from Seychelles stamp duty.

 

Transfer of shares

 

5.19      The ‘default rule’ is that registered shares in a company are transferred by a written instrument of transfer (“share transfer instrument”): (i) signed by the transferor; (ii) signed by the transferee; and (iii) containing the name and address of the transferee (section 62(1) of the Act). However, that default rule is subject to: (i) section 62(2) to (5) of the Act (see paragraphs 5.20 to 5.23 below); and (ii) section 66 (which, in relation to securities issued by a company listed on a Seychelles securities exchange or on a recognized overseas securities exchange, provides for transfer of such securities by electronic means).

 

5.20      Section 62(2) of the Act provides that if expressly permitted by a company’s memorandum or articles but subject to section 62(3) of the Act (see paragraph 5.21 below), registered shares in the company are transferred by a share transfer instrument signed only by the transferor and containing the name and address of the transferee, provided that a share transfer instrument shall not be invalidated if it is signed by both the transferee and the transferor.

 

5.21      The share transfer instrument must be signed by the transferee (as well as the transferor) if: (i) the share is not fully paid up; or (ii) registration as a holder of the share otherwise imposes a liability to the company on the transferee (section 62(3) of the Act).

 

5.22      The executed share transfer instrument must be sent to the company (whose shares are being transferred) for registration. Subject to its memorandum and articles, the company shall, on receipt of an instrument of transfer, enter the name of the transferee of the share in its Register of Members unless the directors resolve to refuse or delay the registration of the transfer for reasons that shall be specified in the resolution (see sections 62(5) and 63 of the Act).

 

5.23      The transfer of a share is effective when the name of the transferee is entered in the Register of Members (section 65 of the Act).

 

5.24      With respect to the transfer of shares in a company, there is no requirement for filing of the share transfer instrument with, or for any other filing or notification to, the Registrar or any other Seychelles Government office. By virtue of the Act (section 362 of the Act), all transactions in respect of IBC shares (including the transfer of shares) are exempt from Seychelles stamp duty.

 

6.         BENEFICIAL OWNERSHIP OBLIGATIONS

 

Register of Beneficial Owners

 

6.1        Section 356(1) of the Act: An IBC is required to keep at its registered office in Seychelles a Register of Beneficial Owners (see paragraph 6.5 below for definition of “beneficial owner”) containing:

 

(a)        the name, residential address, date of birth and nationality of each beneficial owner of the company;

 

(b)        particulars of each beneficial owner’s beneficial interest and how it is held;

 

(c)        the date on which a person became a beneficial owner of the company; and

 

(d)        the date on which a person ceased to be a beneficial owner of the company.

 

6.2        A company must ensure that the information required to be kept in its Register of Beneficial Owners is accurate and up-to-date. The Register of Beneficial Owners may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents (e.g. a PDF or Word version is sufficient). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the Register of Beneficial Owners.

 

6.3        Privacy – the Register of Beneficial Owners is not filed with the Registrar and it is not open to public inspection. The persons entitled to inspect a company’s Register of Beneficial Owners are: (i) a director of the company; (ii) a member of the company; and (iii) a beneficial owner of the company, whose name is entered in the company’s Register of Beneficial Owners as a beneficial owner (section 357 of the Act).

 

6.4        The requirement to keep a Register of Beneficial Owners does not apply to a listed company (section 356(3) of the Act). A “listed company” means: (i) a company whose securities are listed on a recognised exchange; or (ii) a company which is a subsidiary of a body corporate, partnership or trust whose securities are listed on a recognised exchange (section 355(1) of the Act).

 

6.5        Definition of “beneficial owner” Under section 355(1) of the Act but subject to section 355(2), (3) and (4), “beneficial owner” means any individual (excluding a nominee who acts on behalf of another) who in respect of a company:

 

(a)        ultimately owns (directly or indirectly and whether alone or jointly with another person or entity) more than 25% of the shares in the company; or

 

(b)        exercises (directly or indirectly and whether alone or jointly with another person or entity) ultimate control over more than 25% of the total voting rights of members in the company; or

 

(c)        is entitled (directly or indirectly and whether alone or jointly with another person or entity) to appoint or remove a majority of the directors of the company; or

 

(d)        is otherwise entitled to exercise or actually exercises control over the company or its management.

 

Disclosure of beneficial ownership information

 

6.6        Within 30 days of a person becoming a beneficial owner in relation to a company he or she is required to give written notice to the company of his or her registrable particulars (section 360(2) of the Act). Section 355(1) of the Act defines “registrable particulars”, in relation to a company, as the particulars referred to in section 356(1)(a) to (d) inclusive, i.e. the information to be kept in the company’s Register of Beneficial Owners (see paragraph 6.1 above).

 

6.7        Under section 360(1) of the Act, a “relevant change” in relation to a person occurs if: (i) the person ceases to be a beneficial owner in relation to the company; or (ii) any other change occurs as a result of which the registrable particulars stated for the person in the company’s Register of Beneficial Owners are incorrect or incomplete. If a relevant change occurs in relation to a person, he shall within 30 days of the relevant change give written notice to the company of: (i) the relevant change; (ii) the date on which it occurred; and (iii) any information needed to update the company’s Register of Beneficial Owners (section 360(3) of the Act).

 

6.8        Under section 359(2) of the Act, a company (other than a listed company) is required to identify each of its beneficial owners. Section 359 requires or enables a company to give notice to its members or other persons to ascertain the company’s beneficial owners. Section 360 requires the recipients of such notices to respond and otherwise imposes obligations on a company’s members and beneficial owners to disclose beneficial ownership particulars to the company.

 

7.         REGISTERED OFFICE & REGISTERED AGENT IN SEYCHELLES

 

7.1        An IBC is required to at all times have a registered office in Seychelles, which must be the same as the principal place of business in Seychelles of its Registered Agent (section 161 of the Act).

 

7.2        An IBC is required to at all times have a Registered Agent in Seychelles, who must be licensed in Seychelles to provide international corporate services under the International Corporate Services Act 2003 (section 164 of the Act).

 

7.3        The Registered Agent has a non-fiduciary role and acts as a company’s point of contact in Seychelles. Filings to be made by a company with the Registrar must be submitted through its Registered Agent. Service of documents and notices on a company may be made by serving them on its Registered Agent in Seychelles.

 

8.         KEEPING OF ACCOUNTING RECORDS

 

8.1        Section 2 of the Act: “Accounting records”, in relation to a company, means documents relating to: (i) the company’s assets and liabilities; (ii) all receipts and expenditure of the company; and (iii) all sales, purchases and other transactions to which the company is a party (e.g., bank statements, receipts, title documents, agreements, vouchers, etc).

 

8.2        IBCs are not required by the Act to have annual audited accounts or to prepare or file annual accounts. However, under section 174(1) of the Act an IBC is required to keep reliable accounting records that: (i) are sufficient to show and explain the company’s transactions; (ii) enable the financial position of the company to be determined with reasonable accuracy at any time; and (iii) allow for accounts of the company to be prepared (notwithstanding that a company is not required under the Act to prepare accounts). For such purposes, accounting records shall be deemed not to be kept if they do not give a true and fair view of the company’s financial position and explain its transactions.

 

8.3        A company is required to preserve its accounting records for at least 7 years from the date of completion of the transactions or operations to which they each relate (section 175(4) of the Act).

 

8.4        A company’s accounting records are required to be kept at its registered office or such other place as the directors think fit (section 175(1) of the Act). Where a company’s accounting records are kept at a place other than its registered office, the company shall inform its Registered Agent in writing of the physical address of that place (section 175(2) of the Act). It is sufficient if the company provides the Registered Agent with an emailed scanned copy of the completed, signed and dated Notice. Where the place at which a company’s accounting records are kept is changed, the company is required to inform its Registered Agent in writing of the physical address of the new location of the accounting records within 14 days of the change of location (section 175(3) of the Act). Penalties apply for non-compliance with the Act’s requirements relating to the keeping of accounting records.

 

9.         ANNUAL RETURN TO REGISTERED AGENT

 

9.1        Section 171(1) of the Act provides that an IBC shall, by no later than 31 December in every year after the year in which it was incorporated or continued under the Act, furnish to its Registered Agent in Seychelles an annual return by way of a declaration in the approved form signed by or on behalf of the company and containing the information referred to in the Sixth Schedule of the Act (including confirmation that the company is complying with its record-keeping obligations under the Act and stating the physical address at which its accounting records and minutes and resolutions are kept). It is sufficient if the company provides the Registered Agent with an emailed scanned copy of the signed and dated Annual Return.

 

9.2        The Annual Return is to be furnished only to the company’s Registered Agent in Seychelles. The Annual Return is not filed with the Registrar or any other Seychelles government office.

 

10.        NAME REQUIREMENTS

 

10.1      The name of an IBC, other than a protected cell company, is required to end with the word “Limited”, “Corporation” or “Incorporated”, or the abbreviation “Ltd”, “Corp” or “Inc”. A protected cell company shall end with the words “Protected Cell Company” or with the abbreviation “PCC”.

 

10.2      An IBC shall not be registered under a name that: (i) is identical to the name under which another company is registered under the Act; or (ii) is so similar to the name under which another company is registered under the Act that the use of the name would, in the opinion of the Registrar, be likely to confuse or mislead (section 26(a) and (b) of the Act).

 

10.3      An IBC’s name shall not include a prohibited word referred to in Part I of the Third Schedule of the Act, namely, “Bank”, “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Credit Union”, “Government”, “Licensing”, “Municipal”, “Parliament”, “Police” , “Royal”, “Tribunal”, “Stock Exchange” or a word or abbreviation conveying a similar meaning (section 26(c) of the Act).

 

10.4      An IBC’s name shall not include a restricted word referred to in Part II of the Third Schedule of the Act (see below) unless prior written consent to the use of the word has been given by the Registrar and any other regulatory body whose consent thereto is required under Seychelles law (section 26(d) of the Act), namely, “Airline”, “Assurance”, “Bitcoin”, “Bureau de Change”, “Casino”, “Charity”, “College”, “Council”, “Foundation”, “Fund”, “Gambling”, “Gaming”, “Hospital”, “Insurance”, “Insurer”, “Lottery”, “Military”, “Mutual Fund”, “Pharmacy”, “Polytechnic”, “Reinsurance”, “School”, “Securities”, “Seychelles”, “Sovereign”, “State”, “Trust”, “Trustee”, “Union”, “University” and such other words as may be prescribed in writing in guidelines issued by the Registrar.

 

10.5      An IBC’s name shall not include a word which in the opinion of the Registrar: (i) suggests or is calculated to suggest the patronage or any connection with the Government of Seychelles or the government of any other country; or (ii) is in any way offensive, misleading, objectionable or contrary to public policy or to the public interest (section 26(e) of the Act).

 

10.6      Subject to the requirements and restrictions of the Act, including the provisions of the Fourth Schedule to the Act: (a) the name of a company may be expressed in any language; and (b) where the name of a company is in the English or French language, it may have an additional foreign character name.

 

11.        AMENDING AN IBC’s MEMORANDUM AND ARTICLES

 

11.1      Subject to any limitations referred to in paragraphs 11.2 and 11.3 below and to section 23 of the Act (see paragraph 11.4 below relating to registration by the Registrar), an IBC may amend its memorandum or articles by an ordinary resolution of members or by resolution of directors (see sections 22(1), 80 and 81 of the Act and subject to section 83 relating to reduction of share capital).

 

11.2      Pursuant to section 22(3) and (4) of the Act, a company’s memorandum may include one or more of the following provisions:

 

(a)        that specified provisions of the memorandum or articles may not be amended;

 

(b)        that the memorandum or articles, or specified provisions of the memorandum or articles, may be amended only if certain specified conditions are met;

 

(c)        that all or any provisions of the memorandum or articles may only be amended by a resolution of members; or

 

(d)        that a resolution passed by a specified majority of members representing in excess fifty per cent of the votes of those members entitled to vote, is required to amend the memorandum or articles or specified provisions of the memorandum or articles,

 

but paragraphs (a) and (b) do not apply to any provision in a company’s memorandum that restricts the company’s objects.

 

11.3      If an IBC is permitted by its memorandum or articles to amend its memorandum or articles by resolution of directors, it should nonetheless seek expert legal advice to check if it is required (by its memorandum or articles, any shareholders’ agreement with the company or otherwise at law) to obtain shareholder approval and/or any other permission (for example, from debenture holders or secured creditors) as a pre-requisite to amending its memorandum or articles. Notably, pursuant to section 22(5) of the Act and notwithstanding any provision in a company’s memorandum or articles to the contrary, the directors do not have the power to amend the memorandum or articles:

 

(a)        to restrict the rights or powers of the members to amend the memorandum or articles;

 

(b)        to change the percentage of members required to pass a resolution to amend the memorandum or articles; or

 

(c)        in circumstances where the memorandum or articles cannot be amended by the members.

 

11.4      Mandatory registration: Where a resolution is passed to amend a company’s memorandum or articles (“amendment resolution”), the company (via its Registered Agent) is required to file with the Registrar for registration a certified copy or extract of the amendment resolution (section 23(1) of the Act). An amendment to the memorandum or articles is not effective until the certified copy or extract amendment resolution is registered by the Registrar (section 23(3) of the Act). A higher filing fee applies if the extract amendment resolution is not filed with the Registrar within 30 days of the date of the resolution.

 

12.        CHARGES OVER IBC ASSETS

 

Register of Charges

 

12.1      Pursuant to section 179(1) of the Act, an IBC is required to keep at its registered office in Seychelles a register of all relevant charges and pre-existing charges created by the company, to be known as its Register of Charges, specifying in respect of each charge:

 

(a)        if the charge is a charge created by the company, the date of its creation or, if the charge is a charge existing on property acquired by the company, the date on which the property was acquired;

 

(b)        a short description of the liability secured by the charge;

 

(c)        a short description of the property charged;

 

(d)        the name and address of the chargee, who may be acting as a trustee or security agent for other persons; and

 

(e)        details of any prohibition or restriction, if any, contained in the instrument creating the charge on the power of the company to create any future charge ranking in priority to or equally with the charge.

 

12.2      The Register of Charges may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents. A director or member of a company is entitled without charge to inspect the company’s Register of Charges. Penalties apply for non-compliance with the Act’s requirements relating to the keeping of the Register of Charges.

 

Registration of charges

 

12.3      While registration of a charge over a company’s assets is optional under section 181(1) of the Act, most lender chargees will insist on registration of a relevant charge (i.e. a charge created on or after the Act commencement date) because registration determines the ranking of creditors having relevant charges over the same secured assets.

 

12.4      A registered relevant charge (i.e. a charge created on or after the Act commencement date) has priority over (i) a relevant charge on the property that is subsequently registered under the Act; and (ii) a relevant charge on the property that is not registered (section 184(1) of the Act). Relevant charges which are not registered under the Act shall rank among themselves in the order in which they were created (section 184(2) of the Act).

 

12.5      Pre-existing charges (created before the Act commencement date) on property of a company (incorporated under the International Business Companies Act 1994 and re-registered under the Act) shall rank among themselves in the order in which they were created (section 185(1) of the Act). In the case of a pre-existing charge on property of a company and a relevant charge on the same property, the pre-existing charge shall rank ahead of the relevant charge as priority shall be determined based on the order in which each charge was created (section 185(2) of the Act).

 

13.        CONTINUATION (REDOMICILIATION)

 

13.1      Sections 212 – 216 of the Act permit a company in good standing incorporated under the laws of a jurisdiction outside Seychelles to be re-domiciled to and continued in Seychelles as a company incorporated under the Act.

 

13.2      Pursuant to section 216 of the Act, on a foreign company’s continuation in Seychelles (i.e. upon the issuance of a certificate of continuation by the Seychelles Registrar in respect of a company):

 

(a)        The Act applies to the company as if it had been incorporated under the Act and the company is capable of exercising all the powers of a company incorporated under the Act;

 

(b)        The company is no longer to be treated as a company incorporated under the laws of a jurisdiction outside Seychelles; and

 

(c)        The continuation of the company under the Act does not affect: (i) the continuity of the company as a legal entity; or (ii) the assets, rights, obligations or liabilities of the company.

 

13.3      Pursuant to section 217(1) of the Act but subject to the requirements of section 217(2) and subject to any limitations in its memorandum or articles, a company in good standing under the Act may, by a resolution of directors or by resolution of members, continue as a company incorporated under the laws of a jurisdiction outside Seychelles in the manner provided under those laws.

 

14.       MERGERS, CONSOLIDATIONS AND ARRANGEMENTS

 

Part XI of the Act allows for consolidation or merger, i.e. the consolidation of two or more constituent companies into a new company, or the merger of two or more constituent companies into one of the constituent companies (including the merger of a parent company with one or more subsidiary companies), or merger or consolidation with foreign companies; sale of more than 50% in value of the assets of the company otherwise than in the usual course of business; forced redemption of minority shareholders;  and court approved schemes of arrangement.

 

15.        ANNUAL FEES & LATE FEES

 

15.1      Each company which is on the Register shall pay (via its Registered Agent in Seychelles) to the Registrar on or before the date of each anniversary of its incorporation or continuation under the Act, the annual fee set out in Part I of the Second Schedule of the Act (US$100 other than for protected cell companies).

 

15.2      Where the annual fee is not paid by its due date, the amount of the annual fee shall increase by ten percent (i.e. to US$110). Where the company fails to pay the amount due as an increased annual fee within 90 days of the date when it becomes due, then the amount of the annual fee shall increase by 50 percent (i.e. to US$150) (section 12 of the Act).

 

16.        STRIKING OFF AND RESTORATION

 

Striking off the Register for “non-renewal”

 

16.1      Under section 272(1)(c) of the Act, the Registrar may strike the name of a company off the Register if the company fails to pay to the Registrar its annual fee or any late payment penalty thereon within 180 days of the due date, provided that striking off under such provision shall only occur on 1 January next ensuing.

 

Striking off the Register for non-compliance

 

16.2      Under section 272(1)(a) of the Act, the Registrar may strike the name of a company off the Register if it is satisfied that the company:

 

(a)        has ceased to carry on business or is not in operation;

 

(b)        is carrying on business in Seychelles in contravention of section 5(2) of the Act;

 

(c)        has been used for fraudulent purposes; or

 

(d)        may jeopardize the reputation of Seychelles as a financial centre.

 

16.3      Under section 272(1)(b) of the Act, the Registrar may strike the name of a company off the Register if the company fails to:

 

(a)        file any notice or document required to be filed under the Act;

 

(b)        comply with section 164 (Company to have Registered Agent);

 

(c)        comply with a request made pursuant to the Act or other written law of Seychelles by the Seychelles Revenue Commission, the Financial Intelligence Unit or the Registrar for a document or information;

 

(d)        keep a register of directors, register of members, register of charges, register of beneficial owners or accounting records required to be kept by it under the Act or any other records required to be kept by it under the Act; or

 

(e)        pay any penalty fees imposed by the Registrar under the Act.

 

16.4      Before striking the name of a company off the Register on any grounds specified in section 272 (1)(a) or (1)(b) of the Act (see paragraphs 16.2 and 16.3 above):

 

(a)        the Registrar shall send the company a notice stating that, unless the company shows cause to the contrary within 30 days of the date of the notice, the Register will publish in the Gazette a notice of the intended striking-off of the company’s name from the Register in accordance with paragraph (b) below; and

 

(b)        after the expiration of the 30 day period referred to in the notice given under paragraph (a), unless the company has shown cause to the contrary, the Registrar shall publish in the Gazette a notice of its intention to strike the name of the company off the Register at the expiration of 60 days from the date of the publication of the notice in the Gazette under this paragraph (b).

 

16.5      After the expiration of 60 days from the date of the publication of the notice in the Gazette (see paragraph 16.4(b) above), unless the company has shown cause to the contrary, the Registrar may strike the name of the company off the Register. The Registrar shall then publish a notice of the striking of the name of a company off the Register in the Gazette. The striking of the name of a company off the Register is effective from the date on which the Registrar strikes the name off the Register (section 272(4) and (5) of the Act).

 

Effect of striking off

 

16.6      Pursuant to section 274(1) of the Act (but subject to sections 274(2) and (3)), where the name of a company has been struck off the Register, the company and the directors, members and any liquidator or receiver thereof, shall not:

 

(a)        commence legal proceedings, carry on any business or in any way deal with the assets of the company;

 

(b)        defend any legal proceedings, make any claim or claim any right for, or in the name of, the company; or

 

(c)        act in any way with respect to the affairs of the company.

 

16.7      Where the name of a company that has been struck off the Register under section 272 of the Act remains struck off continuously for a period of five years, it is dissolved with effect from the last day of that period (section 275 of the Act).

 

Restoration of company to the Register by Registrar (section 276(1) of the Act)

 

16.8      Where a company is not dissolved and within 5 years of its name being struck off the Register under:

 

(a)        section 272(1)(b)(v) for non-payment of any penalty fees imposed by the Registrar for a breach of the Act (other than as referred to in (b) below); or

 

(b)        section 272(1)(c) for non-payment of its annual fee or any late payment penalty thereon,

 

upon application for restoration of the company’s name to the Register being made in the approved form by a creditor, member, former member, director, former director, liquidator or former liquidator of the company, the Registrar may in its absolute discretion restore the name of the company to the Register upon payment of:

 

(i)         the restoration fee referred to in paragraph (x) of Part II of the Second Schedule (the restoration fee payable is US$300 if the company is restored within 6 months of the date of striking off; after 6 months, the restoration fee increases to US$600); and

 

(ii)         all outstanding fees and penalties, restore the name of the company.

 

16.9      Where the name of a company has been struck off the Register under section 272(1)(b)(v) of the Act for non-payment of penalty fees imposed by the Registrar under the Act, the company shall not be eligible for restoration unless the Registrar is satisfied that the contravention of the Act for which the penalty was imposed has been remedied in full (section 276(2) of the Act).

 

Court application to restore company to the Register (section 277(1) of the Act)

 

16.10    Subject as provided in paragraph 16.11 below, where the name of a company has been struck off the Register for any reason, an application to restore the name of the struck off or dissolved company to the Register may be made to the Supreme Court of Seychelles (the “Court”) by a creditor, member, former member, director, former director, liquidator or former liquidator of the company or by any other person who can establish an interest in having the company restored to the Register.

 

16.11    An application to restore the name of a struck off or dissolved company to the Register under section 277(1) of the Act (see paragraph 16.10 above) may be made to the Court:

 

(a)        within 10 years of the date of the striking-off notice published in the Gazette under section 272(4); or

 

(b)        within 5 years of the date of dissolution under Sub-Part II, III or IV of the Part XVII of the Act.

 

16.12    On an application under section 277(1) of the Act but subject to section 277(5), the Court may: (i) restore the company to the Register subject to such conditions as it considers appropriate; and (ii) give such directions or make such orders as it considers necessary or desirable for the purpose of placing the company and any other persons as nearly as possible in the same position as if the company had not been dissolved or struck off the Register.

 

17.        PROTECTION OF MEMBERS

 

Part XV of the Act provides for the protection of members. A member of a company may apply to the Court for relief on the ground that (without limitation) the affairs of the company have been, are being or are likely to be, conducted in a manner that is, or is likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him in his capacity as a member. The Court has wide power to order relief, including (without limitation) (i) to direct the company or director to comply with, or restrain the company or director from engaging in conduct that contravenes, the Act or the company’s memorandum or articles; (ii) to require the company or any other person to pay compensation to the member; or (iii) to direct the rectification of the records of the company.

 

18.        IBC FISCAL EXEMPTIONS

 

18.1      An IBC, including all the income and profits of a company, is exempt from the Business Tax Act (section 361(1) of the Act).

 

18.2      No tax is payable in respect of any capital gain made: (i) with respect to any shares, debt obligations or other securities of a company; or (ii) by a company upon the disposal of any of its assets (section 361(4) of the Act). No estate, inheritance, succession or gift tax is payable with respect to any shares, debt obligations or other securities of a company (section 361(5) of the Act).

 

18.3      An exemption from Seychelles stamp duty applies to instruments relating to: (i) the formation of a company; (ii) transfers of property to or by a company; (iii) transactions in respect of the shares, debt obligations or other securities of a company; (iv) the creation, variation or discharge of a charge or other security interests over any property of a company; and (v) other transactions relating to the business or assets of a company (section 362 of the Act), except that no stamp duty exemption applies to an instrument relating to: (a) the transfer to or by a company of an interest in immovable property (real estate) situated in Seychelles; or (b) transactions in respect of the shares, debt obligations or other securities of a company if it, or any of its subsidiaries, has an interest in any immovable property situated in Seychelles.

 

19.        RESTRICTIONS ON CARRYING ON BUSINESS IN SEYCHELLES

 

19.1      Pursuant to section 5(2) of the Act, an IBC is not permitted to:

 

(a)        carry on business in Seychelles, subject to the permitted exceptions referred to in section 5(3) of the Act (see paragraph 19.2 below);

 

(b)        own an interest in immovable property (real estate) situated in Seychelles, or a lease of immovable property situated in Seychelles otherwise than as referred to in section 5(3)(f) of the Act;

 

(c)        carry on banking business (as defined in the Financial Institutions Act 2004) in or outside Seychelles;

 

(d)        carry on insurance business (as defined in the Insurance Act 2008): (i) in Seychelles; or (ii) outside Seychelles unless it is licensed or otherwise legally able to do so under the laws of each country outside Seychelles in which it carries on such business;

 

(e)        carry on business providing international corporate services, international trustee services or foundation services (as defined in the International Corporate Service Providers Act 2003) except: (i) to the extent permitted under the International Corporate Service Providers Act 2003; and (ii) in the case of carrying on such business outside Seychelles, if the company is licensed or otherwise legally able to do so under the laws of each country outside Seychelles in which it carries on such business;

 

(f)         carry on securities business (as defined in the Securities Act 2007): (i) in Seychelles; or (ii) outside Seychelles unless it is licensed or otherwise legally able to do so under the laws of each country outside Seychelles in which it carries on such business;

 

(g)        carry on business as a mutual fund (as defined in the Mutual Fund and Hedge Fund Act 2008) unless it is licensed or otherwise legally able to do so under the Mutual Fund and Hedge Fund Act 2008 or under the laws of a recognized jurisdiction (as defined in the Mutual Fund and Hedge Fund Act); or

 

(h)        carry on gambling business (as defined in the Seychelles Gambling Act  2014), including interactive gambling business,: (i) in Seychelles; or (ii) outside Seychelles unless it is licensed or otherwise legally able to do so under the laws of each country outside Seychelles in which it carries on such business.

 

19.2      Section 5(3) of the Act: For the purposes of section 5(2)(a) of the Act (prohibition on carrying on business in Seychelles) (see paragraph 19.1 above), an IBC shall not be treated as carrying on business in Seychelles by reason only that:

 

(a)        it opens and maintains an account with a bank licensed under the Financial Institutions Act 2004;

 

(b)        it engages the services of or otherwise deals with counsel, attorneys-at-law, accountants, book-keepers, international corporate service providers, international trustee service providers, foundation service providers, mutual fund administrators or managers, securities dealers, investment advisers or other similar persons carrying on business in Seychelles;

 

(c)        it prepares or maintains its books and records within Seychelles;

 

(d)        it holds meetings of its directors or members, or passes written consent resolutions of its directors or members, in Seychelles;

 

(e)        it concludes or signs contracts in Seychelles, and exercises in Seychelles all other powers, so far as may be necessary for the carrying on of its business outside Seychelles;

 

(f)         it holds shares, debt obligations or other securities in a company incorporated under this Act or in a body corporate registered under the Companies Act 1972;

 

(g)        it has any interest or entitlement as a beneficiary of a foundation registered under the Foundations Act 2009;

 

(h)        it has any interest or entitlement as a beneficiary of a trust registered under the International Trusts Act 1994;

 

(i)         it has any interest in a partnership registered under the Limited Partnerships Act 2003;

 

(j)         it operates as a licensed mutual fund under the Mutual Fund and Hedge Fund Act 2008;

 

(k)        shares, debt obligations or other securities in the company are owned by a resident person;

 

(l)         it is listed on a licensed securities exchange under the Securities Act 2007;

 

(m)       it holds a licence under the International Trade Zone Act 1995; or

 

(n)        subject to the provisions of the International Corporate Service Providers Act 2003, any of its directors are Seychelles resident persons.

 

19.3      An IBC may own or manage a vessel registered in Seychelles under the Merchant Shipping Act 1992 and the vessel may visit or be situated in Seychelles waters, provided that the company shall not carry on any business in Seychelles in contravention of section 5(2)(a) of the Act, including, without limitation, fishing, charter or tourism business involving the vessel (section 5(4) of the Act).

 

20.        MISCELLANEOUS

 

20.1      Subject to Seychelles law and to its memorandum and articles, a company has, irrespective of corporate benefit, full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and for such the purposes has full rights, powers and privileges (section 33(1) of the Act).

 

20.2      Subject to its memorandum and articles, a company may by an instrument in writing appoint a person as its attorney either generally or in relation to a specific matter (section 39(1) of the Act).

 

20.3      A company may (but is not required to) have a common seal. A company which has a common seal shall have its name in legible characters on that seal. A company which has a common seal may have duplicate common seals (section 40(1) to (3) of the Act).

 

20.4      The name of a company shall appear in legible characters in all its: (i) business letters, statements of account, invoices and order forms; (ii) notices and other official publications; and (iii) negotiable instruments and letters of credit purporting to be signed by or on behalf of the company (section 170 of the Act).

 

20.5      Registered Agents of IBCs are required by Seychelles law to conduct customer due diligence on clients who retain their services, including verification of customer identity and address and obtaining information on the business activities of the IBC and source of customer’s funds. Satisfactory proof of identity and address of a Registered Agent’s clients and an IBC’s owners and controllers must be provided to the Registered Agent (or to a Regulated Foreign Professional Intermediary who is subject to FATF-compliant anti-money laundering laws and who has provided the Registered Agent with the required written undertaking to hold the due diligence documentation and to provide it to the Registered Agent on request).

 

20.6      IBC ownership information remains confidential, subject to Seychelles legal requirements. In accordance with global regulatory standards in international financial centres, the routes for Seychelles authorities to obtain IBC ownership information for third party disclosure purposes are: (i) Seychelles court order; (ii) exchange of information in connection with suspected money laundering or suspected terrorist financing pursuant to a request by the Financial Intelligence Unit under the Anti-Money Laundering Act; (iii) exchange of tax information pursuant to a request by another country under a Seychelles double taxation avoidance agreement (DTA) or taxation information exchange agreement (TIEA); or (iv) under the Mutual Assistance in Criminal Matters Act 1995, by which a request by a foreign country for mutual assistance may be made to the Attorney General by a Commonwealth country or other country with whom Seychelles has entered into a treaty for bilateral mutual assistance in criminal matters.

Every effort has been made to ensure that the details contained herein are correct and up-to-date, but this does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.