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Seychelles DTA Agreement News Update

» Double Tax Avoidance Treaties
» Seychelles CSL
» Who is it for?
» Benefits
» Double Taxation Avoidance Treaties Summary Table
» Procedure to Incorporate

» More on Seychelles CSL company


Double Tax Avoidance Treaties

The Seychelles have ratified several double tax avoidance treaties it signed in the past. Seychelles had 3 treaties already in use, namely the Indonesia – Seychelles, South Africa – Seychelles and China – Seychelles treaty. One more has come into effect as from the 1 st of January 2005 and 4 others are likely to come into effect soon.


Seychelles CSL

A Seychelles Special License Company (CSL) is a domestic company with a special license, authorised to carry out specific business as per the laws and pays tax at a flat rate of 1.5% on its worldwide profits. Such a company can use the treaties signed by the country to reduce and avoid double taxation, subject to the agreements signed by both countries. The annual license fees payable to the authorities amounts to USD 1200. The rough estimate to setup a Seychelles CSL is between USD 6000 to USD 8000 for the first year.

Who is it for?

  • Investors
  • Trading Entities
  • Tax planning vehicle for people investing into China, South Africa, Indonesia and Oman.

Benefits

  • Low tax rate of 1.5% on worldwide profits
  • Minimise tax by using the double tax avoidance treaties
  • Normally uses International Accounting Standards but the authorities are flexible with other systems such as GAP
  • Confidential vehicle


Double Taxation Avoidance Treaties Summary Table

 
No. Country Tax Sparing Clause Dividends
(Max. Rate)
Interests
(Max. Rate)
Royalties
(Max. Rate)
Permanent Establishment   Capital Gains

Min Duration Activity (months)
   
1.
China
Yes 5% 10% 10% 12  
Req*
2.
Indonesia
Yes 10% 10% 10% 6  
Req*
3.
South Africa
Yes Req* Req* Req* 6   Req*
4.
Oman
Yes 5% 5% 10% 3   Req*
5.
Botswana
Yes 10% 7.5% 10% 6   Req*
6.
Mauritius
Yes Req* Req* Req* 12   Req*
7.
Thailand
Yes 10% 15% 15% 6   Req*
8.
Malaysia
Yes 10% 10% 10% 6   Req*
9.
Vietnam
Yes 10% 10% 10% 6   Req*
10.
Cyprus
Yes Req* Req* 5% 12   Req*
11.
UAE
Yes Req* Req* 5% 15   Req*

Req* - Request
 

General Notes

  • Dividends, interests and royalties derived from Seychelles by offshore entities are tax exempt. No capital gains.
  • Double taxation is eliminated by the credit method, i.e the taxpayer's country of residence will grant a credit for taxes paid in the source country.
  • When a resident of Seychelles is recipient of dividends from a company which is resident of the treaty country, the recipient is entitled to a tax credit which shall take into account the tax paid in the treaty country by the company paying the dividend in respect of the profits out of which the dividend is paid.

Awaiting Ratification

  • Zimbabwe
  • Belgium
  • Qatar

Negotiations Concluded

  • Russia
  • Egypt

Negotiations in Progress

  • Tunisia
  • Burundi
  • Czech Republic

Agreement to Negotiate

  • Malta
  • India
  • Philippines
  • Namibia
  • Ivory Coast
  • Germany


Procedure to incorporate

Contact Dharmesh Naik by email dnaik@ocra-mauritius.com

Disclaimer

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.


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