Companies with legal personality contain shares. These shares can be held by the corporate executives of the company, external investors or other companies. Most holding companies do not engage in direct commercial and profit making activities. They merely utilize the principles of international company law to shield different types of assets and manage these from within the isolated environment of the holding company. The result of such a corporate structure is that assets are protected from external circumstances such as the corporate liabilities of a subsidiary, or personal responsibility in a wide range of responsibilities, contractual violations and torts.
Even where the holding company holds shares in subsidiaries, direct liability is a matter of piercing the corporate veil and thus a concern of the court. This legal precedent protects legitimate enterprises and their separated holdings, rights and other property, whilst allowing fraud and deliberate misconduct to be challenged in the applicable court of law.
A holding company is a separated legal entity. Yet, for accounting purposes, it may be required to issue consolidated accounts that reveal the overall financial status of the group. Even though every jurisdiction, inclusive the common offshore financial centers and the Seychelles, imposes rules on administration of companies incorporated within their territories, these rules are tailored to the local environment. As such, as a rule of thumb, it can be alleged that offshore companies and IBC’s incorporated in the Seychelles must be able to determine its financial status at any moment in time, where there is no mandatory rule to audit these statements.
The laws of the Seychelles, including its company law has direct effect within its borders. Seychelles offshore companies and IBC’s are used outside the jurisdiction. As such, several rules, regulations and civil requests may apply to the company outside the Seychelles. Foreign commercial counterparts like banks and product suppliers may wish to receive official confirmation of the activities and standing of the company. Their risk assessment during the prospecting and maintenance processes often involve the verification of the authentic of company documents and its financials.
Seychelles holding companies are mainly used to hold shares in foreign subsidiaries, protect intellectual property rights or enter into specific civil agreements such as the opening of a safety deposit box. The scope and nature of the laws for international businesses in the Seychelles may allow for tax exempt status for international companies that follow the rules applicable to such advantages. Operating a Seychelles holding company requires more than just the incorporation. However, the appropriate structure, organization and management can ensure compliance and focus on what really matters.
Seychelles Holding Company
Setting up a Seychelles holding company is relatively straightforward. Yet, the structure and operation must comply with local and international requirements to take full advantage of the local infrastructure and offshore ecosystem.
The incorporation of a Seychelles holding company is relatively straightforward. Yet, the structure and operation must comply with local and international requirements to take full advantage of the local infrastructure and offshore ecosystem. Over the years, the Seychelles implemented stricter rules for foreigners to incorporate within the jurisdiction. Yet, the current framework still provides ample advantages and solutions for legitimate international business structures and holding companies.
Global professionals willing to set up their corporate structure from a cost-efficient, administratively easy and tax neutral environment can choose for the Seychelles. The legitimacy of the corporate operation and the good standing of the beneficiary are of critical importance. This way, the corporate registry is freed of illicit actors and obscure activities which again benefits legitimate business.
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