Another promising offshore jurisdiction for crypto businesses is in Seychelles. Based on BBCIncorp (1), this country has a reputation of being a tax-friendly jurisdiction. Although this jurisdiction still hasn't implemented special crypto regulations, many companies are licensed there.
Country overview
#86
SeychellesCountry stats
Rating Points
165
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
2.1%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
Empty
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
120
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
2 100
Total amount of crypto users out of the country's total population based on public data.
Taxation points
34
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
10.9
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
No info
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
Considerable danger
The overall level of security in a given country based on open data.
Crypto Salaries
No info
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
Good
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
None
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Good
Medium
Bad
According to our rating, Seychelles has a considerable danger security level. The homicide level (2) is 4.7 per 100,000 inhabitants a year.
There is still a need for regulations for crypto payments in the country. According to Freemanlaw (3), cryptocurrency is not treated as a currency. Therefore, it’s not a form of compensation offered by financial institutions licensed or regulated by the Central Bank of Seychelles.
There is no regulation for crypto salaries.
There still needs to be a crypto law in Seychelles. However, the primary regulator is the FSA Seychelles(4). It has a crypto sandbox license, and some crypto exchanges operate from Seychelles with a Capital Market license (brokerage). You may check more information about crypto sandbox on the FSA website (5). Here (6) is the list of companies with Capital Market License from FSA - some operate with crypto assets like eToro.
Also, the Сentral Bank of Seychelles, in its report (August 2022), estimated (7) that about 500 entities operate crypto companies in the country without license as IBC companies. According to local media (8), IBCs are incorporated in Seychelles under the International Business Companies Act 2016, and they are not licensed nor regulated by the FSA for their chosen business activities.
Probably this number 500 is calculated by summarizing the total number of companies operating in the country over several years. However, we at Crypto Penetration estimate that the number of such companies is quite large. If the legislation of Seychelles allows such a situation, then we should be talking about at least 50.
Binance, with its headquarters in the Cayman Islands, also incorporated Binance Investments in Seychelles. Moreover, BitMEX is a Seychelles-based cryptocurrency exchange. Only one crypto entity has a VASP license in Seychelles - SECDEX. It also has a Capital Market license.
Seychelles has often announced that it will implement advanced crypto regulations in recent years. However, the adoption of the necessary law or by-law is constantly postponed.
| Tax name | Index |
| PIT tax Max | 30 |
| PIT tax Min | 0 |
| Corporate tax (CIT) | 25 |
| Max Individual CGT (for crypto) | 0 |
| Min Individual CGT (for crypto) | 0 |
| Wealth tax Max | 0 |
| Wealth tax Min | 0 |
Taxation in Seychelles depends on the type of entity registered/operating in the country. IBC companies are used under a 0% regime, although basic legal entities pay 15-25% tax.
PIT
Seychelles is expected to have a 15% income tax in most reviews. Unfortunately, the situation is different based on Orbitax overview (9). PIT has a 0-30% rate for residents and 15-30% for nonresidents.
The Seychelles Revenue Commission has issued a notice (10) on introducing a new progressive individual income tax effective 1 June 2018. The replacement system includes a flat rate of 15% and a final withholding tax for non-resident individuals. Under the new system, the rates are based on monthly income as follows for resident individuals:
CIT
According to Healy Consultants (11), nonresident offshore companies are tax-exempt, and the IBC company is entirely tax-free.
Based on Orbitax(12), the standard corporate tax for resident companies is levied on companies at the following progressive:
Taxable income up to SCR 1 million - 15% (reduced from 25%, effective 1 January 2022); and.
Taxable income above SCR 1 million - 25% (reduced from 30%, effective 1 January 2022).
CGT
Capital gains are not subject (13) to tax in Seychelles.
1)BBCIncorp. Best Countries For Crypto Businesses: What Are Your Options? Article
2)List of countries by intentional homicide rate
3) Freeman law. Cryptocurrency and Blockchain. Article
4) FSAS. Financial Services Authority Seychelles. Article
5)FSAS. Regulatory Sandbox. Article
6) FSAS. Capital Markets. Article
7) ML/TF OVERALL NATIONAL RISK ASSESSMENT FOR VA & VASPS. PDF-file
8) ABSA. Cryptocurrency exchanges: Seychelles plans to regulate VASP activities. Article
9)Seychelles Introduces New Progressive Individual Income Tax from June 2018 — Orbitax Tax News & Alerts. Article
10 and 11)Healy consultants. Seychelles' legal, accounting, and tax considerations in 2023. Article
12)Seychelles — Orbitax Corporate Tax Rates. Article
13)Seychelles — Orbitax Country Chapters. Article