1. INTRODUCTION
This Article relates to Seychelles limited partnerships (limited partnerships) registered under the Seychelles Limited Partnership Act 2003 as amended (the Act). This Article is not exhaustive, is intended as a general summary and is given only in respect of the position as at the date hereof (see footer). We do not provide legal or tax advice. We recommend that clients seek independent expert legal and tax advice prior to forming a limited partnership.
2. HIGHLIGHTS
- Limited partnerships are required to have one or more general partners and one or more limited partners.
- A limited partnership is not an entity with separate legal personality and cannot own property in its own right. The Act provides that the property of a limited partnership shall be held by its general partner, or where there is more than one general partner, by the general partners jointly, as an asset of the limited partnership in accordance with the terms of its partnership agreement.
- The general partner is responsible for the administering and managing of a limited partnership. For example, the general partner is responsible for the signing of letters, contracts, deeds and other documents on behalf of the limited partnership. General partners are liable for any debts and obligations of a limited partnership if the liabilities exceed the assets of the limited partnership.
- At least one general partner of a limited partnership is required to be a Seychelles international business company incorporated under the International Business Companies Act 2016 or a company incorporated under the Companies Act 1972 and issued with a special licence under the Companies (Special Licences) Act 2003).
- Limited partners are not liable for limited partnership debts except in certain very limited cases.
- A general partner may also take an interest as a limited partner.
- A limited partnership is not permitted to carry on business in Seychelles except to the extent necessary for the carrying on of the limited partnership’s business outside of Seychelles.
- A limited partnership is not liable for Seychelles tax on its foreign sourced income. A limited partnership is exempt from Seychelles stamp duty in respect of: (i) a transfer of partnership assets; (ii) transactions in respect of partnership contributions, debt obligations and other securities of a limited partnership; and (iii) all other transactions relating to the business of n limited partnership.
3. FORMATION AND REGISTRATION REQUIREMENTS
3.1 A limited partnership is formed by one or more general partners and one or more limited partners entering into a partnership agreement (which sets out the terms of the limited partnership and the partners’ respective rights and obligations, etc). To bring the partnership within the ambit of the Act, a limited partnership must be registered with the Registrar, which is achieved by the designated general partner filing a statement pursuant to section 9(1) of the Act (Statement of Particulars) setting out:
- the name of the limited partnership;
- the address of its registered office in Seychelles;
- the general nature of the business of the limited partnership;
- the full name and address of each general partner;
- a declaration that the limited partnership will not carry on business in Seychelles except so far as may be necessary for carrying on of the business of that limited partnership outside of Seychelles; and
- the name and address of the registered agent of the limited partnership.
3.2 The Registrar will issue a Certificate of Registration upon registration of the section 9(1) Statement of Particulars and on payment of the applicable registration fee (section 9(2) of the Act). The limited partnership’s partnership agreement is not required to be filed with the Registrar.
Name of limited partnerships
3.3 A limited partnership is required to have a name which shall include the words “Limited Partnership”, “L.P.” or “LP” and may include the name of any general partner or limited partner or any derivation thereof (section 6(1) of the Act).
Business restriction
3.4 Certain activities are regulated in Seychelles and a limited partnership may be required to obtain a licence from the proper authority if it wishes to carry on such activities (e.g. mutual fund business is regulated by the Seychelles Financial Services Authority (FSA) and an limited partnership wishing to operate as a mutual fund will need to apply for the requisite licence under Seychelles mutual fund legislation).
Tax exemptions
3.5 A limited partnership is not liable for Seychelles tax on its foreign sourced income. A limited partnership is exempt from Seychelles stamp duty in respect of: (i) a transfer of partnership assets; (ii) transactions in respect of partnership contributions, debt obligations and other securities of a limited partnership; and (iii) all other transactions relating to the business of a limited partnership (section 18 of the Act).
4. GENERAL PARTNERS
4.1 Any one or more partners of an limited partnership may be resident, domiciled, established, incorporated or registered pursuant to Seychelles laws or of any other country, provided that at least one general partner of a limited partnership is required to be a Seychelles international business company incorporated under the International Business Companies Act 2016 or a company incorporated under the Companies Act 1972 and issued with a special licence under the Companies (Special Licences) Act 2003 (section 4(7) of the Act).
4.2 One or more general partners shall be responsible for the administering and managing the limited partnership and its business. The general partner is responsible for the signing any letters, contracts, deeds instruments and documents as general partner on behalf of the limited partnership (section 7(1) of the Act). Each general partner must at all time act in good faith in the interest of the limited partnership (section 4(3) of the Act).
4.3 Any property of the limited partnership which is transferred to a general partner or held on behalf of any one or more general partners shall be held by the general partner, and if more than one then by the general partners jointly as an asset of the limited partnership in accordance with the terms of the partnership agreement (section 7(2) of the Act).
4.4 Any debt or other obligations incurred by a general partner in the conduct of the limited partnership’s business shall be a debt or obligation of the limited partnership (section 7(3) of the Act). The general partner(s) shall, in the event that the assets of the limited partnership are inadequate, be liable for all the debts and obligations of the limited partnership (section 4(2) of the Act).
5. LIMITED PARTNERS
5.1 A limited partner shall not take part in the conduct of a limited partnership’s business (section 7(1) of the Act). Subject to the terms of a limited partnership’s partnership agreement, a limited partner of a limited partnership may be a person resident in or outside Seychelles.
5.2 The limited partners shall not be liable to any debts and obligations of a limited partnership, except that if a limited partner takes part in the conduct of a limited partnership’s business in its dealings with persons who are not partners of the limited partnership, that limited partner shall be liable in the event of insolvency of the limited partnership for all debts and obligations of the limited partnership incurred during the period in which he or she so participated in the conduct of the limited partnership’s business, provided that he or she shall be rendered liable pursuant to the foregoing provision only to a person who transacts business with the limited partnership during such period with actual knowledge of such participation and reasonable belief that such limited partner was a general partner (section 7(4) of the Act).
5.3 Pursuant to section 7(5) of the Act, any of the following activities done by a limited partner do not constitute taking part in the conduct of a limited partnership’s business within the meaning of section 7 of the Act:
(a) being a contractor for or an agent or employee of the limited partnership or a general partner, or by being an officer, director or shareholder of a corporate general partner;
(b) consulting with and advising a general partner with respect to the limited partnership’s business;
(c) investigating, reviewing, approving or being advised as to the accounts or business affairs of the limited partnership or exercising any right conferred under the Act;
(d) acting as a surety or guarantor for the limited partnership, either generally or in respect of specific obligations of the limited partnership;
(e) approving or disapproving an amendment to the partnership agreement; or
(f) voting as a limited partner on any matter.
6. SEYCHELLES REGISTERED AGENT AND REGISTERED OFFICE
6.1 A limited partnership must have a registered office situated in Seychelles for the service of process and to which all notices and communications may be addressed, which shall be the same address as the principal place of business in Seychelles of its registered agent (section 6(2) and (3) of the Act).
6.2 As from 6 February 2022, a limited partnership shall at all times have a registered agent in Seychelles, which shall be a person licensed to provide international corporate services under the International Corporate Service Providers Act (section 6A(1) and (2) of the Act). The registered agent has a non-fiduciary role and acts as a limited partnership’s point of contact in Seychelles. Filings to be made by a limited partnership with the Registrar must be submitted through its registered agent.
7. CHANGE OF REGISTERED PARTICULARS
Notice to Registrar of change of Particulars (other than notice of person ceasing to be a general partner)
7.1 If during the continuance of a limited partnership any change occurs in any particular contained in the Statement of Particulars filed with the Registry pursuant to section 9(1) of the Act (i.e. a change in respect of the name or address of each general partner or the registered agent, the general nature of the limited partnership’s business or the registered office address), the general partner shall file a statement specifying the nature of any change with the Registrar within 60 days of the change (section 10(1) of the Act).
Notice to Registrar involving person ceasing to be a general partner
7.2 A statement of change signed in accordance with section 10(1) of the Act in respect of any arrangement or transaction consequent upon which any person will cease to be a general partner in any limited partnership shall, within 15 days of such arrangement or transaction, be filed with the Registrar and until such statement is so filed, the arrangement or transaction shall, for the purposes of the Act and the partnership agreement, be of no effect (section 10(2) of the Act).
8. KEEPING OF PARTNERSHIP REGISTER required by the Limited Partnership Act
8.1 The designated general partner shall maintain or cause to be maintained at the registered office of the limited partnership a register of partnership interests (the Partnership Register) containing the name and address of each partner, the amount and date of contribution or contributions made by each partner and the amount and date of any payment representing a return of any part of contribution of any partner (section 11(1) of the Act). The Partnership Register should be kept in such form as the partnership’s general partner thinks fit, including in electronic or other data storage form as the general partner thinks fit (i.e. a PDF or Word copy is sufficient), but the general partner must be able to produce legible evidence of its contents.
8.2 The Partnership Register must be updated within twenty-one business days of any change in the particulars therein. The Partnership Register shall be made available for inspection and copying without charge during business hours at the request of a partner and a certified copy of the Partnership Register or any part thereof duly certified by the designated general partner shall be issued by a partner at his request (section 11(2) of the Act).
9. REGISTER OF BENEFICIAL OWNERS required by the Beneficial Ownership Act
9.1 In addition to the Partnership Registers required to be kept by the Act (see preceding paragraph), the Beneficial Ownership Act 2020 (the BO Act) and the Beneficial Ownership Regulations 2020 (the BO Regulations) require that the general partner of a limited partnership keep a Register of Beneficial Owners (see paragraph 9.2 below). For BO Act and anti-money laundering (AML) law purposes, pursuant to regulation 3 of the BO Regulations, the beneficial owner in relation to a limited partnership means an individual who:
(a) ultimately owns or controls, whether directly or indirectly, ten percent or more of the partnership ownership interests or voting rights of the partnership;
(b) holds the right, whether directly or indirectly, to appoint or remove the majority of the general partners of the partnership;
(c) ultimately owns or controls, whether directly or indirectly, absolute decision or veto rights in the conduct or management of the partnership; or
(d) is entitled to the assets of the partnership in the event of the dissolution of the partnership.
9.2 A general partner of a limited partnership is required to keep at the principal place of business in Seychelles of its Seychelles general partner, a Register of Beneficial Owners (see section 5(1) of the BO Act and regulation 12(1) and the First Schedule of the BO Regulations), containing the following information:
(a) the name, residential address, service address, date of birth and nationality of each beneficial owner of the partnership;
(b) the nature and details of each beneficial owner’s interest in the partnership;
(c) the date on which a person became a beneficial owner of the partnership;
(d) the date on which a person ceased to be a beneficial owner of the partnership; and
(e) where a nominee holds any interest in or control of the partnership on behalf of the beneficial owner:
(i) the name, residential address, service address, date of birth and nationality of each nominee holding the interest on behalf of the beneficial owner and the particulars and details of the interest held by the nominee; and
(ii) the identity of the nominator (who nominates the nominee to hold interests on his, her or its behalf), and where the nominator is a legal person, the identity of the individual who ultimately owns or controls the nominator (providing their name, residential address, service address, date of birth and nationality)
9.3 The Register of Beneficial Owners may be maintained in magnetic, electronic or other data storage form (section 7 of the BO Act) but the general partner of the limited partnership must be able to produce legible evidence of its contents. Every general partner of the limited partnership shall maintain accurate and up to date information required under section 5(1) of the BO Act in the limited partnership’s Register of Beneficial Owners.
9.4 The registerable particulars of a limited partnership’s Register of Beneficial Owners must be submitted to the Seychelles Financial Intelligence Unit (FIU) which submitted information is not publicly accessible (see sections 5(6) and 13(4) of the BO Act). The filing of the registrable particulars with the FIU is required to be done by a limited partnership’s general partner in Seychelles.
9.5 A limited partnership’s Register of Beneficial Owners kept at its resident general partner’s office in Seychelles is not open to public inspection. The persons entitled to inspect a limited partnership’s Register of Beneficial Owners are a partner of the limited partnership and a person whose name is entered in the limited partnership’s Register of Beneficial Owners as a beneficial owner, limited to inspection of the person’s name in the Register (section 11(1)(d) and (e) of the BO Act).
10. OBLIGATIONS RELATING TO BENEFICIAL OWNERSHIP
Declaration by person on becoming beneficial owner
10.1 Every person on becoming a beneficial owner of a limited partnership shall within 14 days from the date of becoming a beneficial owner, submit to the general partner of the limited partnership a Declaration of Beneficial Ownership containing the registrable particulars relating to the person (section 10(1) of the BO Act and regulation 14 and Second Schedule of the BO Regulations). “Registrable particulars” means the particulars to be registered under the BO Act in relation to a limited partnership including the particulars required by section 5 of the BO Act to be kept in a limited partnership’s Register of Beneficial Owners.
Notice of relevant change by beneficial owner
10.2 A relevant change in relation to a person occurs if: (i) the person ceases to be a beneficial owner in relation to the limited partnership; or (ii) any other change occurs as a result of change in the registrable particulars of the beneficial owner (section 10(8) of the BO Act).
10.3 If a relevant change occurs in relation to a beneficial owner of a limited partnership, the beneficial owner shall within 14 days of such change give written notice to the general partner of the limited partnership providing the following details for changes to be made to the limited partnership’s Register of Beneficial Owners: (i) the relevant change; (ii) the date on which it occurred; and (iii) any information needed to update the Register of Beneficial Owners (section 10(3) of the BO Act).
11 KEEPING OF ACCOUNTING RECORDS
11.1 Each general partner of a limited partnership is required to keep or cause to be kept proper accounting records that: (i) are sufficient to show and explain the limited partnership’s transactions; (ii) enable the financial position of the limited partnership to be determined with reasonable accuracy at any time; and (iii) allow for financial statements of the limited partnership to be prepared (section 11A(a) of the Act). For the purposes of the Act, accounting records of a limited partnership mean documents relating to assets and liabilities of the limited partnership including receipts and expenditure, sales and purchases and other transactions (e.g., including bank statements, receipts, title documents, agreements and vouchers): section 2 of the Act.
11.2 Pursuant to section 11A(3) of the Act, as from 6 February 2022, a limited partnership shall:
(a) prepare an annual financial summary to be kept at its registered office in Seychelles within 6 months from the end of the limited partnership’s financial year; and
(b) where its accounting records are kept outside Seychelles, lodge, not less than on a bi-annual basis, the accounting records at the limited partnership’s registered office in Seychelles, provided that any accounting records. The FSA’s applicable Guidance Circular indicates that the following shall apply:
- limited partnership accounting records relating to transactions or operations in the first half (January to June) of a calendar year must be kept in Seychelles by July of that year;
- limited partnership accounting records relating to transactions or operations in the second half (July to December) of a calendar year must be kept in Seychelles by January of the following year; and
- In respect of existing accounting records (i.e. accounting records relating to the years prior to year 2022) and accounting records relating to year 2022 for limited partnerships on the Register, accounting records relating to transactions or operations in the past 7 years to 31December, 2021 must be kept in Seychelles by 6 February 2022.
11.3 It shall be sufficient compliance with section 11A(3) of the Act (see paragraph 11.2 above) if a copy of the accounting records and financial summary is kept in electronic form at the limited partnership’s registered office in Seychelles (section 11A(4) of the Act). Where a limited partnership registered under the Act before 20 December 2021 keeps its accounting records outside Seychelles, it shall lodge its accounting records relating to transactions over the past 7 years at the limited partnership’s registered office in Seychelles by 6 February 2022 (section 8 of the International Business Companies Act and Other Related Laws (Amendment) Act 2021).
11.4 The financial year of a limited partnership shall be the calendar year, unless it is changed by the general partner and notified to the limited partnership’s registered agent within 14 days (section 11A(3A) of the Act).
11.5 While the accounting records are required to be kept at the registered office in Seychelles, they are not required to be filed with the Registrar (except on legal request) and are not open to public inspection.
11.6 Where a limited partnership: (a) keeps a copy of its accounting records at its registered office; or (b) keeps its original accounting records in Seychelles at a place other than at its registered office, the limited partnership shall inform its registered agent in writing of the physical address of the place where the original accounting records are kept (section 11A(4A) of the Act).
11.7 Where there is a change in the place at which its original accounting records are kept, a limited partnership shall, within 14 days of the change, notify in writing its registered agent of the physical address of the place at which its original accounting records are kept (section 11A(4B) of the Act).
11.8 A general partner shall retain all accounting records for seven years, from the date of completion of the transactions to which they relate (section 11A(5) of the Act).
12. DISTRIBUTIONS
No distributions and no return of capital contributions to a limited partner may be made unless at the time of and immediately following such payment the limited partnership is solvent (section 14(1) of the Act). In the event that the limited partnership goes into insolvency within 6 months of any return of contribution to a limited partner, such return will be repayable by the limited partner with interest to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the LP that incurred during the period the contribution represented an asset of the limited partnership (section 14(1) of the Act).
13. TRANSFER OR MORTGAGE OF PARTNERSHIP INTERESTS & REGISTER OF MORTGAGES OF LIMITED PARTNERSHIP INTERESTS
13.1 Subject to the provisions of the limited partnership’s partnership agreement, a limited partner may assign either absolutely or by way of mortgage the whole or any part of his or her partnership interest and an assignee shall, to the extent of such assignment, become a limited partner, provided that such assignee shall not assume any liability of the assignor from him or her taking part in the conduct of business of the limited partnership which is prohibited the Act or for the return of contributions to the assignor following an insolvency of the limited partnership and provided further that, notwithstanding any term of the partnership agreement or any other agreement to the contrary, no such assignment shall relieve the assignor of any liability arising pursuant thereto (section 7(9)(a) of the Act).
13.2 If any limited partner has mortgaged any of his or her partnership interests, the limited partnership’s general partner has a duty to maintain or cause to be maintained a Register of Mortgages of such mortgaged interests. The register of mortgages of partnership interests shall be maintained at the registered office and shall record the identity of the mortgagor and mortgagee, the date of creation of the mortgage, the partnership interest or part thereof subject to mortgage and the date of receipt of notice of the mortgage (section 7(9)(b) of the Act). The register of mortgages of partnership interests shall be open to inspection by any person during all usual business hours (section 7(10) of the Act).
14. LIMITED PARTNER’S RIGHT TO INFORMATION
Subject to any term of the partnership agreement to the contrary, each limited partner may demand and shall receive from the general partner true and full information regarding the state of the business and financial condition of the Limited Partnership (section 12 of the Act).
15. RETURN OF CONTRIBUTIONS
15.1. A limited partner shall not, on the dissolution of the limited partnership or otherwise, receive out of the capital of the limited partnership a payment representing a return of any part of his contribution to the partnership unless at the time of such payment the limited partnership is solvent (section 14(1) of the Act). In section 14 of the Act, the word “receive” shall include the release of any obligation forming part of the capital contribution and, in this context, liabilities to make repayments pursuant to section 14(2) of the Act shall be read as including a reference to the due performance of such obligation (section 14(3) of the Act).
15.2 For a period of six months from the date of receipt by a limited partner of any payment representing a return of contribution or part thereof received by such limited partner in circumstances where the requirements of section 14(1) of the Act have not been met such payment shall, in the event of the insolvency of the limited partnership within that period, be repayable by such limited partner with interest at the legal rate to the extent that such contribution or part thereof is necessary to discharge a debt or obligation of the limited partnership incurred during the period that the contribution represented an asset of the limited partnership (section 14(2) of the Act).
16. DISSOLUTION & DE-REGISTRATION
16.1 A limited partnership shall not be dissolved by an act of the partners until a notice of dissolution signed by a general partner has been filed with the Registrar (section 15(1) of the Act). Notwithstanding the foregoing and any provision of the partnership agreement to the contrary, the death, insanity, retirement, bankruptcy, commencement of liquidation proceedings, resignation, insolvency or dissolution of the sole or last remaining general partner shall cause the dissolution of a limited partnership which shall then be wound up in accordance with the partnership agreement or, if any, applicable court order. Notwithstanding the foregoing, if within 30 days from the date of any of the aforementioned occurrences, one or more new general partners are appointed, the business of the limited partnership shall not be dissolved and wound up (section 15(3) of the Act).
16.2 Subject to the terms of a limited partnership’s partnership agreement, a general partner may at any time deregister a limited partnership by filing a written notice with the Registrar (section 16A of the Act).
17. COMPLIANCE INSPECTIONS
Subject to section 25 of the Act, the Registrar may for the sole purpose of monitoring and assessing compliance with this Act, after giving reasonable notice to the general partner during business hours: (i) access the registered office of the limited partnership; (ii) inspect the documents required to be kept under this Act; (iii) during or after a compliance inspection request for explanation from the general partners of the limited partnership (section 24(1) of the Act). For the purposes of section 24(1) of the Act, where a document is not in the English or French language, the Registrar may request a translation of the records in the English or French language from the general partner of the limited partnership or from the registered agent (section 24(1A) of the Act).
18. PRESERVATION OF RECORDS BY REGISTERED AGENT
A registered agent shall, in respect of each limited partnership (including a deregistered limited partnership) to which it was or is acting as registered agent, preserve for at least 7 years: (i) the register of mortgages and the register of limited partnership interests, from the date of deregistration of the limited partnership; and (ii) the accounting records of the limited partnership in the possession of the registered agent, from the date of completion of the transaction or operation to which they each relate (section 26(1) of the Act). Where a registered agent ceases to hold a licence to provide international corporate services under the International Corporate Service Providers Act, that person shall hand over all the records specified under section 26(1) of the Act to the Registrar or any other person approved by the Registrar. All records to be handed over under section 26(2) shall be preferably in digital form or in such form as agreed upon between the Registrar and the registered agent (section 26(3) of the Act).
Summary & Conclusion
As a starting point when setting up a Seychelles LP, you’ll need to nominate one or more General partners and a Limited Partner/s.
In case you’re unsure as regards who is to fulfil what role you might like to note:
- An LP is not a Legal entity and cannot hold property in its own right. The property of the LP is held by the General Partner/s
- The General Partner/s is/are responsible for the administration and management of the LP including signing agreements and resolutions on behalf of the LP
- The General Partner/s is/are liable for the debts of the LP if the debts of the LP exceed assets owned by the LP
- Limited Partners are generally speaking (subject to certain exceptions) not liable for the debts of the LP
- A General Partner may also take an interest as a Limited Partner
- At least one General Partner must be a Seychelles entity (we supply a Corporate Nominee as part of the package)
- As part of the registration process an LP must file a “Statement of Particulars” which must include the name/s of the General Partner/s and a summary of the LP”s proposed business activities
Price and Inclusions
OCI can assist you to set up a Seychelles LP. Included in the all-inclusive set up price of $1,500 for a Seychelles Limited Partnership are the following components:
- Services:
- Unlimited name availability inquiries
- Advice from an experienced International Corporate Lawyer on how to structure your Limited Partnership
- Preparation (overseen by a Lawyer) of application to register the Limited Partnership
- Preparation (overseen by a Lawyer) of the Limited Partnership agreement
- Preparation (overseen by a Lawyer) of the Statement of Particulars
- Attending to filing the Limited Partnership registration request with the registry
- Attending to payment of government filing fees
- One year’s Registered Agent’s service in the country of registration
- One year’s Registered Office service in the country of registration
- Provision of Seychelles resident General Partner (corporate or individual)
- Mailing address in the country of registration
- Delivery of registration pack by international courier (ie DHL/Fedex/TNT etc)
- Unlimited free legal consultations for 12 months
Documents included in your Registration pack:
- Certificate of Registration
- Minutes of first meeting
- Statement of particulars
- Resolution to open a bank account for the Partnership
- Resolution to appoint a lawyer for the Partnership
- Resolution to appoint an accountant for the Partnership
- Notarised & Apostilled set of Registration/Partnership formation documents
Price (all inclusive): $US1,500
Annual fees from 2nd year onwards are as follows:
- Registered Office Annual Fee: $600
- General Partner, resident of Seychelles (individual or corporate): $300
TOTAL 2nd and subsequent years: $900
Would you like to know more? Then please Contact Us:
info@offshorecompaniesinternational.com
DISCLAIMER: Information current at 2.7.22. OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
