A subsidiary company is a distinct legal entity that a parent company operates. Establishing a subsidiary company in Seychelles can help meet various business objectives, including business expansion, asset protection, and global trade. Hailed as a tax haven, Seychelles has evolved as a thriving destination for entrepreneurs and investors worldwide. If you are gearing up for subsidiary formation in Seychelles, this guide can help you navigate legal requirements with ease.
What is a Subsidiary Company in Seychelles?
A subsidiary company is a business that is controlled by another company, called the parent company. The parent company typically owns more than 50% stake in the subsidiary, which gives it decision-making powers.
Moreover, despite being controlled by the parent company, a subsidiary is a separate legal entity that has its own management, financial records, and tax obligations.
Aside from this, a subsidiary is often created to expand into new markets. These can be set up in the same country as the parent company or in another country, in which case they are often termed as offshore subsidiaries. The structure allows the parent company to benefit from the local advantages such as tax incentives, regulatory flexibility, and more.
Advantages of Opening a Subsidiary Company in Seychelles
Most of the business owners prefer to proceed with the incorporation of a subsidiary company in Seychelles for the following reasons:
- Low minimum capital requirement
- Flexible management
- No compulsion to hold the annual meeting in Seychelles
- No tax requirements or audit compliance
- Favorable business climate
Viable Structures for Subsidiary Formation in Seychelles
The Seychelles, an archipelago of 115 islands located in the Southwestern Indian Ocean, holds firm ground when it comes to offshore company formation. You can complete the incorporation of a subsidiary company in four different ways:
- Incorporation of an International Business Company (Ensure tax benefits, asset protection, and seamless global trade)
- Incorporation of Special License Company (Ideal for those seeking tax-residency status and DTAA access).
- Incorporation of a branch office (Suitable for creating a company-vendor relationship, market research, etc.)
- Incorporation of an LLC (ideal for local and global operations)
Out of these, IBCs and Special License Companies are ideal for non-resident investors. Local entrepreneurs primarily use the rest of them. That said, the choice between them will depend on the:
- Business goals you want to achieve
- Residency status
- Taxes
- Compliance threshold
- Record keeping
- Reporting requirements
What is the Process of Opening a Subsidiary Company in Seychelles?
You can incorporate an offshore subsidiary company in Seychelles either via an offshore entity, such as a Limited Liability Company (LLC), a Special License Company (CSL), or a branch company. Each structure has its own merits, risks, and distinct registration process.
For subsidiary incorporation in Seychelles as an LLC, you must follow the process outlined below:.
- File the information related to the parent company
- File Certificate of Incorporation with the registrar
- Draft charter documents, such as Memorandum and Articles of Association.
- Share relevant information concerning directors and shareholders with the authorities.
- Pay the required fee.
- Open an offshore bank account with the designated bank.
Notable Pointers for Incorporating a Subsidiary Company in Seychelles
Keep the following pointers in mind before you proceed with registering an offshore company in Seychelles
- The Companies Act, 2009, and the International Business Companies Act, 1994, govern subsidiary formation in Seychelles.
- The Beneficial Ownership (Amendment) Act 2022 requires local and foreign subsidiaries to demonstrate economic substance and maintain transparent management. Additionally, keep the beneficial owner’s details readily available, as the authority may request to review them.
- The Beneficial Ownership (Amendment) Regulations, 2023 stipulate that companies must provide the beneficial owner’s Tax Identification Number (TIN) or equivalent and/or National Identification Number (NIN) or equivalent, such as a National Insurance Number.
- A foreign subsidiary must register with the Registrar of Companies (RoC).
- Each subsidiary must draft charter documents such as the Memorandum and Articles of Association. These documents must reflect the purpose, rights, and internal regulations.
- There is no mandatory minimum capital requirement to set up a standard subsidiary (International Business Company or LLC) in Seychelles, though a minimum of $1 USD is often used for practical purposes.
- IBC formation requires at least one director and one shareholder.
- To form a Seychelles Special License Company (CSL), there should be at least two resident directors and one resident company secretary. Additionally, a minimum of two shareholders is required.
By now, you have a clear idea about establishing a subsidiary company in the Seychelles. While proceeding with the incorporation process, it is essential to consider the legalities and ensure the paperwork is in order. A smart move is to proceed with certified business experts who can assist in the complete process.
At Business Setup Worldwide, we take the necessary steps to help our esteemed clients set up their offshore companies. With a team of experts, we provide the best offshore company setup experience by offering customized solutions to your needs. If you are planning for subsidiary formation in Seychelles, feel free to contact us via email at [email protected] or WhatsApp at +971 504808605.
