10.04.2019. Legislation changes in offshore jurisdictions

News

Starting from 2018 and now there have been a lot of political pressure on offshore jurisdictions and legislation is changing so often that it is becoming very difficult to make a long term business plans in such jurisdictions. It is predicted that more amendments will follow. Here we prepared the summary of amendments made in Belize, BVI and Seychelles Acts.

Belize

From the beginning of this year there are in force changes in  International Business Companies Act in Belize, which declares that it is mandatory for every Belize  company exclude “pure equity holding companies” to prove “economic presence” in Belize. Criteria which prove the economical presence in this jurisdiction relate with the company management, rented office and employees.

“Pure equity holding companies” are companies, which hold only the shares of other companies and whose income is derived only from dividends and capital gains.

For companies registered till 16.10.2017. there are transition period in Belize till 30.06. 2021 in order to make companies to comply with the given requirements.

The latest legislation related with Financial service providers was passed on March 12 and

waiting guidelines that explain made changes in IBC Act in Belize, so, we are going to follow this procedure and inform you.

BVI

Also in BVI from the beginning of 2019 there are requirements to prove the physical presence in the jurisdiction according to the identical criteria mentioned above in the Belize.

The requirements are in force for companies having any of the following activities:

  • banking business
  • insurance business
  • fund management business
  • finance and leasing business
  • headquarters business
  • shipping business
  • holding business
  • intellectual property business
  • distribution and service centre business

There is a time till 01.06.2019 for existing company owners to comply with the legislation changes but till now there are not published guidelines about procedure. We will follow the updates and inform you.

Seychelles

In Seychelles there have been made changes twice last year in International Business Companies Act.

The first changes resulted with following:

  • directors registers registration period was prolonged till 01.12. 2018;
  • penalty for delay now USD 500 plus USD 25 for each day of non-compliance with the obligation to file the Register;
  • register of directors made not public;
  • Registered agent can restore a company if it struck off for 7 years;
  • the Court can restore company if it struck off for 12 years.

The second changes in December 2018 have been made in order to minimize the differences between Seychelles IBC and resident companies:

  • restrictions about activity in Seychelles and ownership/rent of real estate for IBC’s have been cancelled, so now IBC can do a business activity in Seychelles, as well as own and rent a real estate in Seychelles;
  • if the company is doing business in Seychelles, such company will be obliged to pay business tax, that is 15% from  deriving income within Seychelles.
  • as previously company in Seychelles is not paying taxes from incomes earned

Seychelles now has entirely turned back to territorial principle of taxation.

When the Seychelles company  receives a taxable income, it should within a month from the moment when received the first income notify the Registry in written about receiving it and about the activity for which received income. Also within a year after receiving the first taxable income, a company should file the annual report, audited financial statement as local companies.

Also there have been amendments to Business Tax Amendment Act  where are included changes in territorial principle of taxation in Seychelles for all Seychelles  companies. Income received by Seychelles company is considered as an  income by origin in Seychelles, if income received from:

  • activity carried out in Seychelles,
  • sales of goods situated in Seychelles,
  • realization of intellectual property owned by Seychelles company

It is important that if IBC does a part of its business in Seychelles, it as a local company should receive a tax number, pay for this part of income taxes and file the reports in Seychelles.

As there are so many changes made and we predict that more amendments will come, we will be following the latest updates and will keep you informed.