Double Taxation Agreement in Seychelles

Tax liabilities can be burdensome for business investors. So, how do we navigate the web of such taxes? By setting up a company in a country with a double taxation agreement (DTA). Seychelles is one of those countries. Now, the interesting question here is: What is a double taxation agreement?

The agreement is nothing more than an understanding between two countries to protect business owners from paying double taxes. The next question you may ask: Why Seychelles? Seychelles is an ideal option for you because it has signed DTAs with 28 countries worldwide.  

So, if you belong to those 28 countries, you will benefit from the provisions of the treaty. Sounds interesting? So, dive deeper and know more about the countries that have signed this agreement and how you can benefit from it. 

Which Countries Have Signed DTA with Seychelles?

As discussed above, 28 countries have signed the Double Taxation Treaty with Seychelles: Indonesia, Malaysia, Vietnam, Thailand, Singapore, Botswana, Mauritius, Oman, Qatar, UAE, China, Cyprus, Isle of Man, Luxembourg, Barbados, South Africa, Zambia, Monaco, San Marino and Guernsey. However, we will discuss the top 5 countries that have signed the DTA with Seychelles.  

1. 1. Seychelles – UAE: The purpose of this treaty was to prevent taxing the same income twice. So, you can relax and reduce the tax burden you are carrying by starting an offshore company in Seychelles. By minimizing tax uncertainties and complexities, the DTA fosters a more favourable investment climate, encouraging businesses to invest in both Seychelles and the UAE. Trade, investment, and cross-border business transactions get easier between both countries. The treaty reduces withholding tax rates on dividends, interest, and royalties paid to a Seychelles company by a UAE resident. So, it is beneficial for Seychelles offshore companies to conduct business with entities in the UAE. Additionally, you can claim your tax credits in the UAE for Seychelles offshore company. Reducing your tax liabilities through this is a clever tactic. 
   2. Seychelles – Singapore: You can claim tax credits for your Seychelles companies in Singapore due to the existence of this Double Taxation Agreement. In this way, you can reduce all the tax liability. Transparent guidelines and tax compliance procedures can also reduce your administrative burden and uncertainties for business operations. Additionally, the DTA provides Seychelles with a stable tax environment and a lucrative destination for foreign investment, particularly from Singapore. 

• Seychelles – Cyprus: The DTA provides you access to a wide market with an offshore company setup. The agreement also offers business opportunities for international trade and investment. Both Seychelles and Cyprus have business-friendly trade agreements that attract investors from across the world.  

1. Seychelles – Malaysia: The DTA reduces the withholding tax rates on dividends, royalties and interest between Seychelles and Malaysia. So, if you are someone who generates income from investment and business operations from other countries, this agreement is beneficial for you. The agreement also ensures tax compliance and prevents tax evasion with its provisions for the exchange of information between both countries’ tax authorities. So, the information exchange maintains confidentiality and legal safeguards. Additionally, the DTA emphasizes permanent establishment to understand the tax residency of a company and the tax obligations attached to the company based on the country of origin. Furthermore, the agreement also has provisions for tax dispute resolution between taxpayers and the tax authorities of either Seychelles or Malaysia making it time and cost-effective.  
2. Seychelles – Qatar: The DTA between Seychelles and Qatar can enhance the reputation and credibility of both countries for offshore company formation. More business investors are attracted towards these countries to set up their offshore companies due to the transparent and stable business environment they offer. The Double Taxation Agreement with Qatar also enables easy access to capital markets in both Seychelles and Qatar. So, if you are seeking to raise capital through debt or equity to finance your business, the DTA can protect you from discriminatory tax treatment by either Seychelles or Qatar. This ensures that businesses operating under the DTA are treated fairly and equitably in both jurisdictions.

What are the General Provisions of the Double Taxation Treaty in Seychelles?

Numerous provisions can be included in the DTA in Seychelles. Each country that this jurisdiction has an agreement with can have its unique set of provisions for specific scenarios. However, common clauses such as interest, dividends and royalties are generally exempted from taxation for a Seychelles offshore company formation. Companies established in this jurisdiction do not have to pay any capital gains tax. When it comes to a company’s profit, you pay a globally set low rate of 1.5%. Additionally, you can reduce your tax liabilities by taking advantage of other provisions in the agreements. For example, you are a resident of Malaysia and have a company in Seychelles. Now, according to the provisions of the ‘tax-credit’ mechanism mentioned in the DTA, the Malaysian government will reduce your tax liability to it by the amount of taxes already paid in Seychelles. To understand these terms or if you want to know details about how a DTA works for Seychelles offshore company formation, contact Business Setup Worldwide (BSW).  

We are an experienced corporate service provider that has been assisting businesses and entrepreneurs for more than 8 years. Our business consultants are well-versed with the legal regulations. Contact us for further information and start your Seychelles offshore journey today.