Foreign investors interested in doing business in Seychelles have several options in terms of business forms. Even if the Seychelles offshore company is the most popular, there are also other possibilities which offer many advantages, among which trusts and limited partnerships.
The limited partnership is one of the oldest business forms in Seychelles and falls under the provisions of the Limited Partnerships Law which was last amended in 2011 when important changes have been brought to this type of business form.
Below, our company formation agents in Seychelles explain how to open a limited partnership here.
The Limited Partnership Act in Seychelles
Foreign investors who want to create limited partnerships in Seychelles must comply with the requirements imposed by the Limited Partnership Act of 2003. This is the main law providing for the requirements and the main features and uses of this legal entity.
According to it, this business form is most suited for the creation of joint ventures, investment funds, but also as a private equity fund entity.
There are not many differences between a general partnership and a limited one, as the main one consists in the role of members in the entity:
- – the partners in the general one have equal rights and responsibilities;
- – the partners in a limited partnership are distinct rights and responsibilities.
Also, from the limited partnership has derived the limited liability partnership that can be employed for professional services companies operating in Seychelles.
In 2011, the Limited Partnership Act has been amended and among the most important changes are the following:
- the limited partner can be a Seychelles resident or non-resident;
- the general partner will be in charge of keeping the business’ accounting records;
- these records must be kept at the registered office or another suitable location of the partner’s choosing;
- the general partner can solely decide the deregistration of the partnership and file a notice in this sense with the Seychelles Trade Register;
- the partnership can have more than one general partners;
- at least one of them must be an offshore company or a Special Licensed Company.
If you want to set up a business in Seychelles and need guidance in choosing a suitable legal vehicle, our specialists can offer detailed information based on which you can make a decision.
Characteristics of limited partnerships in Seychelles
The limited partnership will have the same features as partnerships all over the world, therefore it will be subject to less stringent registration requirements. A limited partnership in Seychelles must be created for doing business outside the country.
The Seychelles limited partnership is a good option for those who want to open investment funds in this country.
You can rely on our local consultants if you want to create a limited partnership or set up an offshore company in Seychelles.
Requirements to open a limited partnership in Seychelles
Opening a Seychelles limited partnership implies respecting the following requirements:
- – this business form must have a general partner who will be fully liable for the partnership’s debt and obligation, but will also manage the business;
- – the limited partnership must also have a limited partner, who can be a Seychelles resident (company or natural person);
- – the limited partnership must have a registered address in Seychelles;
- – at least one of the general partners must be a company registered in Seychelles.
Just like the Seychelles offshore company, the limited partnership must be registered with the Companies Registrar.
Registration procedure for a Seychelles limited partnership
The Seychelles limited partnership will be created through a partnership agreement which must be filed with the Trade Register. The name of the partnership must contain the words Limited Partnership, or the abbreviations L.P. or LP. It can also contain one of the names of the partners.
Members with limited liability in a limited partnership in Seychelles
The limited partnership in Seychelles must have two types of members, out of which the limited ones have multiple benefits. Among these, they will not be held accountable for any of the partnership’s debts or obligations that exceed the assets owned by this business form. However, their participation in the decision-making process and management in the partnership is limited.
There are also certain exceptions from participating in the management of the limited partnership which can be explained by our company formation agents in Seychelles.
The uses of a Seychelles limited partnership
A limited partnership can have several uses, however, the main reason it is selected is because it is an important tax planning tool and asset protection vehicle. It can also be used for the creation of investment funds, among which private equity and mutual funds are among the preferred ones by foreign professional and institutional investors.
When it comes to being used a business vehicle, the Seychelles limited partnership can be used for the creation of joint ventures through which local and foreign investors can operate outside the insular state.
For foreign entrepreneurs, the limited partnership is a great investment tool that can be used for starting a business in a very flexible manner: they can participate with a rather low amount of money while benefitting from full protection against any debts that may be registered by the Seychelles partnership.
The main advantages of a limited partnership in Seychelles
Most of the benefits of the Seychelles limited partnership are related to taxation. This legal entity will be exempt from all taxes in applicable in the insular state, but also from duties on any income or profits.
No stamp duty applies on the transfer of property, shares or any other transactions completed in the name of the business.
Seychelles also applies a trade tax, however, it does not apply to the limited partnership.
The limited partnership can also have employees, however, as an employer, the business is not subject to social security contributions.
When it comes to payments made to non-residents, no capital gains tax applies to the partners in the business. Also, under the law, all tax exemptions are granted for a period of 20 years.
The main taxes applied in Seychelles
While the limited partnership is not subject to any taxes in Seychelles, the Revenue Commission imposes the following:
- – the corporate tax which is levied at rates between 0% – 33% depending on the legal structure they are created under;
- – the personal income which is imposed at a rate of 16%;
- – the value added tax which is imposed at a standard rate of 15%.
If you need advice on the taxation of other types of companies, or if you are interested in setting up an offshore company in Seychelles, you can request the services of our agents.
For assistance in opening a limited partnership or company incorporation in Seychelles, please feel free to contact our local company registration advisors.