The Seychelles Revenue Commission (SRC) has announced the launch of an extensive review of all companies registered in Seychelles that could potentially fall within the definition of a Financial Institution under the Common Reporting Standard (CRS).
The move comes after Seychelles received a "Non-Compliant" rating in the 2022 Peer Review conducted by the Global Forum on Transparency and Exchange of Information for Tax Purposes.
The purpose of the survey is to identify all companies that are required to register as Reporting Seychelles Financial Institutions (RSFIs) and make annual CRS reports.
Who is considered a Financial Institution: Updated CRS Clarifications
The CRS definition of an institution includes:
Depository Institutions - Banks, credit institutions, and other institutions that accept deposits.
Custodial Institutions - Organizations that hold customer assets as their primary business.
Investment Entities - Companies that manage portfolios, invest or trade financial assets.
Specified Insurance Companies - Companies that pay out or administer insurance contracts with a cash value.
Funds, trusts, partnerships may also fall under the CRS in Seychelles if they are managed by a financial institution or if they meet investment criteria.
Obligations of companies recognized as Financial Institutions
Any entity that falls under the CRS must:
register as a Reporting Seychelles Financial Institution (RSFI);
conduct CRS due diligence on its accounts;
submit an annual CRS report to the SRC;
submit a Nil return if there are no reportable accounts.
Penalties that will apply from 2025
According to the Revenue Administration (CRS) Amendment Regulations 2025, the penalty can reach:
up to SCR 50,000 for each violation.
Updates on Economic Substance and Multinational Group (MNG)
The CRS and the Seychelles Competent Authority have issued a number of important clarifications affecting the status of IBCs starting in 2025.
Tax Residence - by Incorporation
Any company incorporated in Seychelles is considered to be tax resident in Seychelles, even if it is managed from another country.
Definition of Multinational Group (MNG)
Seychelles legislation does not contain a threshold of EUR 750 million, as in the OECD standard.
A company is automatically considered a member of an MNG if:
the group includes companies from different jurisdictions;
or the company has a permanent establishment abroad;
even if the turnover is minimal.
Important! If an IBC owns a foreign company, the group immediately becomes Multinational.
Peace of PEHC (Pure Equity Holding Company)
A company is a PEHC if it owns only shares in other companies. A PEHC is not an MNG if all companies in the group are tax residents of Seychelles.
Economic Substance for PEHCs
PEHCs are required to:
have a registered office;
maintain a minimum local presence (local director/administrator);
keep accounting records;
submit a financial summary;
a full staff or significant expenses are not required.
Preparation of consolidated financial statements
If a company is listed on the Seychelles Stock Exchange, it must submit IFRS financial statements, including consolidation if it has subsidiaries.
Taxes and income from sources in Seychelles
Tax rates for Seychelles companies:
15% on the first SCR 1 million of profits;
25% on the amount above that;
Some industries - 33%;
15% WHT on royalties, interest, management fees;
Dividends - no WHT;
No capital gains tax.
IBC accounting and filing requirements
All IBC companies registered in Seychelles must:
pay an annual government fee;
provide a financial summary to the agent within 6 months;
keep accounts available for 7 days upon request;
file a Business Tax Return if there is Seychelles income.
Additional Changes: MNEs and Country-by-Country Reporting
In parallel with the increased CRS enforcement in Seychelles, the Seychelles Revenue Commission (SRC) has launched a separate survey that addresses companies that may be classified as members of a Multinational Enterprise Group (MNE) and subject to Country-by-Country Reporting.
According to the updated Business Tax Act, the definition of income deemed to be derived from sources in Seychelles has been significantly expanded. Now, a company registered in Seychelles is considered a "covered company" if it is part of an international group, i.e. a group that includes two or more resident companies in different tax jurisdictions.
Incomes that are now classified as Seychelles-sourced for such companies include:
Income from activities carried on in the territory of Seychelles;
Income from activities outside Seychelles, if the company does not have a permanent establishment in another country;
Income from the use of intellectual property rights registered in Seychelles;
Passive income earned outside the country, if the company does not meet the criteria of a "qualifying company" under the Eleventh Schedule.
It should be borne in mind that Seychelles operates a self-assessment system - the responsibility for the correct determination of Seychelles-sourced income lies entirely with the company.
Seychelles Revenue Commission Survey
The SRC has issued a guide - a self-assessment form that must be filled out by the director or legal representative of each Seychelles company.
After receiving the questionnaire from the company, the registration agent in Seychelles must upload the data to the state portal.
Seychelles companies must also:
Describe in detail the type of activity (general answers are not allowed: "normal", "active");
Provide complete information even if the company is in Dormant status (the planned activity is indicated);
Wait for the agent to upload the information by December 31.
SRC has also provided methodological materials - a flowchart and Q&A guidance, which explain the requirements for Economic Substance and the correct classification of activities.
What all Seychelles companies need to do now
Today, every offshore company in Seychelles should assess its status and comply with the relevant requirements.
If there is a possibility that the company falls under the definition of a Financial Institution, it is necessary to conduct a CRS self-assessment (this can be done using our internal template), register with the Seychelles Revenue Commission as a Reporting Seychelles Financial Institution and prepare an annual CRS report. If there are no reporting accounts, a Nil return is required.
If the company is a Pure Equity Holding Company (PEHC) and has no foreign subsidiaries, the economic presence requirements remain minimal and the CRS rules in Seychelles do not apply - provided that the company does not carry out investment activities as a financial institution.
If an IBC owns a company in another country, it is automatically considered part of a Multinational Group. In this case, the company must comply with the Economic Substance requirements, including proof of real economic presence and good governance.
As you can see, the era of offshore registration is actually a thing of the past. Countries that used to have the status of offshore jurisdictions are forced to adapt their legislation to modern transparency standards in order to maintain their reputation and avoid being blacklisted or graylisted. The Seychelles is no exception, as the update of the CRS rules in Seychelles and ES reflects a general trend towards increased international scrutiny.
All offshore company owners need to be prepared for even stricter requirements, increased regulatory scrutiny, and changing approaches to compliance.
In some cases, it is advisable to consider opening or relocating business to stable European jurisdictions, which already operate under transparent rules and better meet the expectations of banks and financial institutions.
