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Continuation of companies
Our company is a licensed registered agent in Seychelles and has licenses for international corporate, trustee and foundation services (more information).
Continuation (also – redomiciliation, change of jurisdiction, transfer of a company from one jurisdiction to another) may appear relevant due to number of reasons, e.g.:
- adverse changes have been made to the laws of a country of a company’s incorporation;
- a company intends to choose a more favorable tax regime;
- a company is registered in a jurisdiction which is included into a particular country’s blacklist;
- costs for annual maintenance of a company have essentially increased;
- the need to enter new markets or to change the geography of company’s business;
- economic downfall in a country of a company’s incorporation etc.
In each particular case a reason to change a company’s jurisdiction may differ.
The most obvious solution in such case is to dissolve a company in one country and to establish a new company in another. However, not everyone is ready to dissolve an existing company and register a new one in other jurisdiction. For example, if a company has gained reputation of a reliable business partner, has formed an extensive customer base and has good market positions, maintenance of business relations with the partners and existing contractors will be of great importance for it.
In such a situation the redomiciliation procedure (redomiciliation means a continuation of a company as a legal entity in other jurisdiction) may become a relevant option, as far as the existing company survives along with its bank accounts, assets, business contacts and the known firm name. At the same time, it is important to note that various banks may show different approach regarding continuation of bank accounts in case if a client company changes its jurisdiction. Also, redomiciliation does not automatically entail change of tax residency.
The redomiciliation procedure includes the necessary formalities both in the current and the new jurisdiction. Company’s transfer to a new jurisdiction is possible only in case if redomiciliation is allowed by the laws of both jurisdictions, and their corporate legislation is similar enough. Some popular jurisdictions do not allow this – e.g. Hong Kong, Singapore, the United Kingdom do not accept incoming foreign companies and do not release existing domestic companies to other countries.
Continuation of a foreign company in Seychelles
A foreign company may be redomiciled in Seychelles and continue its business as:
Seychelles IBCs are exempt from internal taxation and can conduct any lawful business throughout the world except the territory of Seychelles.
A foreign company may continue as a company incorporated in Seychelles provided that:
- it is in good legal standing in its current jurisdiction (under the local law);
- a majority of the company’s directors issued a written certificate addressed to the Seychelles Registrar certifying that:
- the company is solvent;The majority of the company’s directors approves Articles of Continuation which must state:
- the company is not in the process of being wound up, dissolved or struck off in the country of incorporation;
- no receiver or administrator has been appointed to the company;
- the company has no outstanding debts;
- the law of the country of incorporation does not prohibit its continuation as a company in Seychelles.
- the current name of the company and the name under which it is being continued;
- the current country of incorporation;
- date of incorporation;
- that the foreign company wishes to be continued in Seychelles;
- the company’s obligation to adopt Memorandum and Articles of Association which comply with the Seychelles IBC Act 2016.
The application documents for continuation are to be filed with the Registrar by the company’s intended registered agent in Seychelles.
Upon the results of processing of the application the Registrar registers the company’s Articles of Continuation and new Memorandum and Articles of Association, allots a unique registration number to the company and issues a Certificate of Continuation. This Certificate is a conclusive evidence that all the requirements of the IBC Act as to continuation have been complied with.
From the said moment the company is considered to be incorporated in Seychelles and may exercise all rights and powers according to the Seychelles IBC Act 2016. The assets, rights, obligations and liabilities of the company, which arose before that moment, remain in full.
Unlike an IBC, a Seychelles company with a special license (CSL), being a local (resident) company, may carry out only those activities that are approved by the Regulator. As a rule, such company can carry out activities which do not involve making profit within the territory of the Seychelles.
Seychelles CSL is a taxable resident company. The worldwide income of the company is taxed in Seychelles at a 1.5% rate. There is no withholding tax on dividends, interest and royalty payable to non-residents of Seychelles. The use of double tax treaties is available.
Continuation of a foreign company in Seychelles includes the following steps:
Step 1. Name checking.
A request is made to the Seychelles Registrar of Companies for name approval. The name approval takes around 3 days.
Step 2. Preparation and filing of application documents with the Financial Services Authority (FSA).
Upon the name approval the application documents, including application form, due diligence & KYC declaration, Articles of Continuation, new version of Memorandum and Articles of Association and others are filed with the FSA.
A license application form must include a detailed business plan, describing the proposed activity and operations of the company. It may be included into the Application Form or presented as a separate document.
The business plan must contain:
- Company’s background;
- Objectives of the company;
- Type of activity the company will engage in;
- Market details;
- Details of capital investments to be made in setting up operations in Seychelles;
- Logistical requirement in setting up operations in Seychelles;
- Audited accounts for last accounting period (if applicable);
- Detailed 3-year cash flow forecast including a breakdown of:
- Utilities, communications (telephones, facsimile, internet);
- Administrative costs, salaries and wages;
- Finance charges, insurance, training costs, consultancy, general overheads, etc.
- Date of proposed commencement of business
If the documents are in order, the FSA issues a Certificate of Approval and sends the documents to the Registrar of Companies.
Step 3. The Registrar of Companies issues a Certificate of Continuation.
The Certificate of Continuation and the registered documents are then sent to the FSA.
Step 4. Issue of a Special License.
The FSA issues a Special License basing on the documents received from the Registrar of Companies.
The timeframe for processing of a license application takes at least 6 weeks.
The application processing fee is $210 (non-refundable).
The license fee is $1150.
From this moment a company may continue as a Seychelles Special License Company.
Step 5. Annual maintenance.
Annual license fee of $1075 must be paid upon expiration of one year after obtaining a license.
A company must file annual return with the fee of $210.