Company Formation in the Seychelles
Off both EU lists since February 2026, cheap to run, and almost impossible to bank. All three facts matter equally.
Information as of October 2026. Rules change often — confirm the current position with us before acting.
The Seychelles International Business Company is the least expensive vehicle we work with and the one we recommend least often. Its reputation has improved genuinely and recently; its banking reality has not improved at all. Anyone offering you an IBC with a bank account as a package is describing something they cannot reliably deliver.
| Position as at 2026 | |
|---|---|
| Tax on foreign income | Not charged — but see the covered company rule below |
| Tax on Seychelles income | 15% on the first SCR 1 million, 25% above |
| Capital gains tax | None as a separate charge |
| Audit | Not required; accounts are not filed with the registry |
| Accounting records | Mandatory, kept with the licensed agent in the Seychelles, twice-yearly, retained seven years |
| Beneficial ownership threshold | 10%, not the 25% used almost everywhere else |
| Bearer shares | Prohibited |
| Directors / shareholders | One of each minimum; corporate directors permitted |
| Government fees | USD 130 on registration, USD 140 annually |
| EU list status | On neither annex — removed from Annex II on 17 February 2026 |
| Residence route | None. An IBC gives no right to live or work in the Seychelles |
| Apostille | Available — the Seychelles has been a party to the 1961 Hague Convention since 1979 |
| Our fee | From $2,500 |
“Zero tax” is an imprecise description
Foreign-source income of an IBC is not taxed in the Seychelles. Seychelles-source income is: 15% on the first million rupees and 25% above. There is no separate capital gains tax.
The covered company rule is the part nobody mentions
Where a company is part of a multinational group — broadly, a group with members resident in two or more jurisdictions — foreign passive income can be treated as Seychelles-sourced, and therefore taxable, unless adequate substance is maintained in the Seychelles. If your IBC is one entity in a wider international structure rather than a standalone vehicle, the “no tax on foreign income” headline does not simply apply to you. This is the single most important technical point on this page.
The broader point holds everywhere: tax on the profits of a Seychelles company usually arises in the country where its beneficial owner is tax resident, not in the Seychelles. The IBC does not make income disappear; it decides where the conversation happens.
Compliance: lighter than most, but not absent
Accounting records
Records must be kept with the licensed agent in the Seychelles and lodged twice a year — by the end of July and the end of January. They must be retained for seven years. A financial summary is due within six months of the year end, with an exemption for small holding companies. Nothing is filed with the registry and nothing is audited.
The penalty for failure runs to USD 10,000 — imposed on the company and on the director personally. And since 2025 an agent may refuse to release a company to a new agent where obligations are outstanding, which in practice means a non-compliant company can become locked with a provider you no longer want to use.
Beneficial ownership at 10%
The Seychelles threshold is 10%, not the 25% used in the UAE, Hong Kong, Singapore and the EU. A register is kept by the agent and mirrored in a financial intelligence database accessible to the FIU, the regulator, the tax authority, the registrar, the central bank, police, courts and banks. Declarations are due within 21 days, changes within 21 days, and agent upload within 14 days. Penalties reach SCR 150,000 and imprisonment of one to two years.
Bearer shares are prohibited outright. Since 2025 a nominee shareholder must disclose the person on whose behalf they hold — within 21 days, with penalties up to USD 10,000 and up to a year’s imprisonment. The IMF reported in 2025 that the beneficial ownership database covered roughly 94% of the 49,150 active IBCs.
There is no public register. That is not confidentiality — it is the absence of one specific disclosure channel among many that remain open.
Standing and reputation in 2026
- EU list: removed from Annex II on 17 February 2026, following a “largely compliant” peer-review rating. The Seychelles is now on neither annex — a materially better position than Panama.
- OECD Global Forum: upgraded to Largely Compliant on 21 January 2026.
- FATF: not on the list of jurisdictions under increased monitoring.
- But: enhanced regional monitoring continues under ESAAMLG, with partial compliance ratings on the recommendations covering targeted financial sanctions. The improvement is real and recent; it is not complete.
Two national-list changes are worth knowing because they are recent enough that most published material misses them: the Seychelles came off the EU grey list on 17 February 2026, and off the Spanish list under Order HFP/115/2023 with effect from 28 June 2026. It remains on Italy’s decree of 4 May 1999 and on Portugal’s Portaria 150/2004 list.
For EU nationals and EU-resident owners
Delisting removes the coordinated defensive measures and takes payments to a Seychelles entity outside DAC6 hallmark C.1(b)(ii) on the non-cooperative-jurisdiction limb. That is a genuine and recent improvement over the position two years ago, and it is the strongest argument for the Seychelles over Panama.
What delisting does not do is switch off your own Member State’s rules.
| Rule | Position for a Seychelles IBC |
|---|---|
| CFC rules under ATAD | A company paying no tax on foreign income fails every Member State low-tax test — Germany and Italy at 15% effective, France at a 40% differential, Spain at 75% of the Spanish charge. The substance carve-out requires staff, equipment, assets and premises actually in the Seychelles, which almost no IBC has |
| DAC6 hallmark D | Arrangements that undermine CRS reporting, and opaque ownership chains, are reportable without any main benefit test — independently of the delisting |
| Italy, Article 2(2-bis) TUIR | The Seychelles remains on the 1999 decree list, so an Italian citizen relocating there is presumed to remain Italian tax resident |
| Spain, Article 8.2 LIRPF | No longer applies — the Seychelles came off the Spanish list on 28 June 2026 |
| Portugal | Still on the Portaria 150/2004 list, with domestic anti-avoidance consequences |
In plain terms: for an EU-resident owner, a Seychelles IBC is a company whose profits your home country will very likely tax anyway, held in a jurisdiction where you cannot easily open a bank account. The delisting improves the paperwork, not the economics.
For Indian residents
There is no comprehensive double taxation agreement between India and the Seychelles. A tax information exchange agreement exists, which is an instrument for sharing data with the Indian authorities rather than for relieving your tax. The asymmetry is worth stating plainly: information flows, relief does not.
The overseas investment framework applies as everywhere else — Form FC and a Unique Identification Number before any remittance, the USD 250,000 annual Liberalised Remittance Scheme limit, 20% tax collected at source above ₹10 lakh, a single designated authorised dealer bank, an Annual Performance Report by 31 December. The bar on investing in a foreign entity engaged in financial services activity applies, as does the prohibition on real estate activity, and a resident individual may not hold control in an entity that has a subsidiary.
Why we rarely recommend it for Indian clients
No treaty means no withholding relief, no residence tie-breaker and no tax residency certificate route. The company still has to be reported in Schedule FA on a calendar-year basis, and the Black Money Act applies in full — 30% tax, a penalty of three times that, a ₹10 lakh penalty for non-disclosure subject to the ₹20 lakh carve-out, and prosecution exposure. You take the entire disclosure burden and get none of the treaty protection. Hong Kong, with a treaty in force since 2018, does the same commercial job with far better legal cover.
Setting up, costs and the things that go wrong
| Item | Detail |
|---|---|
| Registration fee | USD 130 |
| Annual fee | USD 140 |
| Late payment | 10% surcharge up to 90 days, 50% thereafter; then striking off, and dissolution after a year |
| Licensed agent | Mandatory; the registered address is the agent’s office |
| Directors | Minimum one; corporate directors permitted |
| Shareholders | Minimum one |
| Share capital | No minimum |
| Register of directors | Filed with the registrar but not public since 2018 |
| Annual return / audited accounts | Not filed |
| Our fee | From $2,500 |
The law sets no statutory time limit for incorporation. Registration is usually quick, but we do not quote “24 hours” as a fact, because nothing obliges anyone to deliver it.
Banking: the honest picture
This is where most Seychelles plans end. There are around seven banks in the jurisdiction and no separate category of offshore bank. The central bank has publicly acknowledged de-risking as a problem and formed a committee to address it, which tells you the problem is real rather than anecdotal.
The mechanics are worth understanding. A local bank does not clear US dollars by itself; it needs a correspondent, and the correspondent assesses the local bank’s entire client base rather than your file alone. A non-resident IBC with a foreign beneficial owner sits at the top of the list of things correspondents do not want. Removal from the EU list in February 2026 does not change that picture, because banking risk appetite and tax-list status are different systems.
We do not offer “IBC plus account” as a package. Where a client already banks somewhere workable and needs a cheap holding layer, the Seychelles can make sense. Where the account is the point, it usually cannot.
Residence: there is none
An IBC confers no right to live or work in the Seychelles. There is no citizenship-by-investment programme, whatever you may find online. A residence permit requires a connection to the country or a special contribution, does not carry the right to work, and comes with conditions including a banking confirmation, a minimum presence and a guarantee. Working in the country requires a Gainful Occupation Permit through the Seychelles Investment Board — and since an IBC is by law not permitted to carry on business in the Seychelles, it cannot be the basis for one.
Frequently asked questions
Is the Seychelles blacklisted?
Is an IBC really tax free?
Do I have to keep accounts?
Are the accounts audited or filed publicly?
Who counts as a beneficial owner?
Does a nominee shareholder give me privacy?
Are bearer shares allowed?
I am an EU citizen — does delisting mean my structure is fine?
Is there a tax treaty with India?
How hard is it to open a bank account?
Does an IBC give me residence in the Seychelles?
How quickly can it be registered?
When does a Seychelles company actually make sense?
Compare with the other jurisdictions
Choosing between two or three options is normal at this stage. Each page below sets out the same ground — tax, audit, reporting, residence and the rules that apply where you are resident — so the comparison is like for like.
Or start from the full comparison of all six, which sets them side by side on tax, audit, residence and EU list status.
Before you register an IBC
Tell us where you bank today and where you are tax resident. Those two answers usually settle whether the Seychelles is a sensible cheap layer or a company you will regret paying for.