A limited partnership in Seychelles is formed by combining the capital owned by two or more businessmen/investors, and it is ideally suited for use as a private equity fund.
You can order a partnership incorporation service from our experts. The basic incorporation starts from USD 2 099 USD , while the apostilled one costs USD 2,899 and more.
Before you decide to establish a company, analyze to what extent Seychelles LPs (Limited Partnerships) will benefit your business structure and what privileges will be available to a particular group of companies.
Partnerships in Seychelles: General and Limited Partner
This type of organization is established under the Limited Partnerships Act 2003 as amended. According to its provisions, a partnership is not a separate legal entity, and it is set up by two or more entrepreneurs to conduct joint profit-making activities.
Keep in mind that, unlike traditional partnerships, a limited partnership has a General Partner and a Limited Partner, which reduces the risks of equal liability under the General Partner’s obligations.
LP or LLP in Seychelles is an attractive structure for businesses providing professional services in legal, accounting, and tax areas.
General Partner of Seychelles LP
According to the above-mentioned law, at least one partner must be a General Partner in Seychelles limited partnerships. This person bears full responsibility for administration, control, and business management. The General Partner signs all documents (letters, contracts, agreements) on behalf of the established structure.
The General Partners shall:
- fulfill the obligations prescribed in a traditional full partnership
- act in accordance with the regulatory conditions for full partnerships mentioned in the agreement
- make decisions and manage the business solely in good faith and in the interests of the structure established
Any obligations incurred by the General Partner are legally considered partnership obligations.
Section IV of the Seychelles Limited Partnerships Act also states that the General Partners are fully liable for LP’s obligations and debts in case of its insolvency.
The legal concept of a Limited Partner is similar to the definition of a shareholder in a limited liability company. A private or legal person acting as a Limited Partner does not take part in the partnership’s day-to-day activities or management.
The businessman/investor/company contributes assets to the charter fund and receives a corresponding share of profits (or other types of compensation) under the previously drawn-up partnership agreement.
If you or your company intends to participate as a Limited Partner in Seychelles limited partnerships, please be aware that:
- the maximum liability is limited to the contribution to the charter fund
- such a partner may become a General Partner if at least one more Limited Partner is present in the LP
- when business is conducted with a third party (not a partner), such a partner shall bear full and unlimited liability under the obligations arising from such activity (similar to the General Partner).
LPs in Seychelles permit Limited Partners to:
- act as a contractor, partnership employee, director, officer, shareholder
- advise the General Partner on business issues
- review and receive advice regarding LP business transactions and accounts
- approve or disapprove of various amendments to the partnership agreement
- vote as a Limited Partner on current business issues
- act as guarantor (surety) for LP and/or specific debts/obligations
The business of such partnerships shall be conducted only outside the jurisdiction. An exception is allowed if an effective activity abroad requires a certain activity within Seychelles.
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How to Establish a Limited Partnership in Seychelles
Local LPs have significant tax preferences. According to the offshore legal and tax regime in the jurisdiction, no income outside the Republic of Seychelles is subject to taxation. No tax liability arises in Seychelles when such profits are distributed among foreign partners.
The following requirements should be met to incorporate a limited partnership in Seychelles:
- the General Partner must be a tax resident of the jurisdiction: a private person, an IBC, or a local company
- at least two participants
- at least one director or beneficial owner
- a registered office within the jurisdiction
At least one of the partners must be an IBC or a specially licensed company. No minimum charter fund is provided.
While incorporation requirements are fairly simple, it is very important to respect the subsequent obligations of such an entity:
- submission of an annual certificate to confirm that LP complies with all requirements of the current legislation
- submission of annual accounts on behalf of the General Partner
- storage of reporting documents in the Seychelles office
- timely extension of the company’s active status
- registration documents should be submitted to the Register to be kept as publicly available
Please note that your IBC does not need resident directors, beneficial owners, or employees to participate in the Seychelles LP. Also, international commercial companies are not obliged to keep accounting records at the office registered here.
You have the right to hold general meetings of shareholders at any place outside Seychelles.
When documents are submitted to the public register, only the Articles of Association, Memorandum of Association, and Certificate of Incorporation are publicly available. All other forms remain confidential.
How Much Does the Incorporation of Limited Partnerships in Seychelles Cost?
The establishment of a limited liability company with the help of our experts takes 3-4 business days, and the cost of services starts from 2 099 USD . You will receive the final estimate after we determine all business needs (for a professional directorial service, a bank account, further legal and accounting support, etc.).
The price of 2 099 USD includes:
- state registration of a commercial company for LP establishment
- mandatory registration fee
- services of a professional business service provider (registered agent)
- provision of a legal address (office) within the jurisdiction
- courier delivery of documents
- 1 set of original corporate documents
If you need to incorporate a limited partnership in Seychelles, don’t hesitate to contact our experts for detailed advice on taxation and the appropriateness of incorporating such an entity.
You will receive the following package of your BC’s original documents in Seychelles upon procedure completion:
- Certificate of Incorporation
- Memorandum of Association
- Register of Shareholders
- Register of Directors
- Share Certificates
- Minutes of the First Director Appointment
- Maintenance of Registers
- Minutes of the First Meeting of Shareholders
- Initial Filing of the Register of Directors
If you need an additional package of copies of apostilled corporate documents, the service will cost USD 2,899 and more, and the process of registration and preparation will take from 5 to 6 business days.
What Does the Procedure for Incorporating a Limited Liability Company Look Like?
An application form completed and signed by the General Partner (or a proxy on his behalf) is submitted to the FSA Registrar. The special form shall contain the following information:
- full name of the Seychelles Limited Partnership
- activity types
- legal address within the jurisdiction (registered office)
- name and address of the General Partner of the Limited Partnership
- if the General Partner is a legal entity – a certificate of its incorporation, Good Standing Certificate, or another similar document in accordance with the laws of the jurisdiction where it was registered
- a statement confirming the impossibility of conducting business within Seychelles (remember the above exception)
Regarding the name, limited partnerships in this jurisdiction should have the LP abbreviation at the end of the name. The names of General and Limited Partners, as well as their derivatives, can be included in the name.
The established registration fee is USD 200.
Please note that the Seychelles Limited Partnership is fully transparent for tax purposes. Any tax liabilities are imposed on partners in amounts and shares corresponding to their contributions to the authorized capital.
What else do I need to know about the Limited Partnership in Seychelles?
Such an entity is fully tax-exempt within the jurisdiction of incorporation. Corporate income, property transactions, trade proceeds from import/export, and profit distribution between residents of the state do not imply that tax liabilities in Seychelles may arise.
Limited Partnerships do not remit social payments as employers, and tax exemption is guaranteed by a special LP Act for 20 years (or until it is amended).
Important! If the source of the limited partnership’s profits is within Seychelles, an obligation to pay a profit repatriation tax may arise.
If you intend to create an LP in this country, consider the following points:
- changes made to the composition of the partnership should be registered by the General Partner within 60 days
- when the General Partner is changed, the information is transferred to the Registrar within 15 days (otherwise, the agreements and arrangements become null and void)
- the General Partner is responsible for the proper maintenance and storage of accounting records
- an LP shall submit the annual declaration before January 31 of each year following the reporting year, and pay the annual fee
- if the terms of the company’s active status renewal are violated, a fine of USD 25 will be imposed for each day of such delay
Why keep accounting if there is no such requirement under Seychelles laws? In present-day conditions, almost all international and offshore companies are trying to streamline accounting documentation, and here are the reasons why:
- records make it possible to demonstrate and explain partnership transactions at any time
- LP’s financial standing is quickly and easily determined if you keep such documents
- banks often require a balance sheet to extend the partnership’s corporate services
The incorporation of a limited partnership in Seychelles will cost 2 099 USD and more, and the price starts from USD 2,400 if you additionally order financial statement services (the final cost depends on the number of transactions per year). The fee for the company’s active status renewal is USD 1,999. You can always request more information from our experts.
What Makes LPs in Seychelles So Attractive?
As a Limited Partner, your company will be liable for the partnership’s debts only within its interests (contributions to the charter fund). Such a “silent” partner has limited powers as it cannot directly control or manage the business.
However, Seychelles LPs provide good tax advantages both at the corporate tax level and at the personal income tax level as no taxes are paid in absence of income sources in the Seychelles jurisdiction.
What Are the Requirements for an LP Organization?
The Limited Partnerships Act sets minimum requirements: the General Partner must be a resident of the country, and at least one partner must be an IBC.
There is no minimum capital requirement.
One director and one shareholder are needed for incorporation.
In addition, a registered office is required, which is usually provided by a registered agent.
What are the Tax Advantages of a Limited Partnership in Seychelles?
Partnerships can only be established if their business is conducted outside the country (with some exceptions). Accordingly, the entity has no tax obligations within Seychelles and is exempted from the obligation to remit social security charges or pay duty when importing goods/equipment to the local office.