Investing in Seychelles Through an SCI: Benefits and Pitfalls

Published on October 5, 2025 and written by Cyril Jarnias

Investing in the Seychelles tax haven through a Real Estate Civil Company (SCI) is an attractive opportunity for investors seeking to diversify their assets in an exotic and tax-advantageous environment. The Seychelles offers a favorable legal framework, allowing investors to benefit from attractive tax exemptions while capitalizing on the growing popularity in the tourism sector, driving up real estate values across the archipelago. However, as with any investment opportunity, it is crucial to be aware of potential pitfalls, such as local capital requirements and understanding the specific regulations for SCIs in the Seychelles.

Optimizing the Legal Structure of an SCI for Investing in the Seychelles

Real estate investment through an SCI in the Seychelles is governed by a set of specific local and international laws aimed at enhancing the country’s attractiveness while protecting its natural resources.

Key Points on the Local and International Legal Framework

• Foreigners can acquire real estate in full ownership in designated areas, primarily within residential complexes or approved projects.
• Prior government approval is mandatory for any real estate acquisition by a foreign entity, in accordance with the Immovable Property (Transfer Restriction) Act.
• The purchase of undeveloped land remains reserved for Seychellois citizens, while foreigners generally cannot own more than three residential properties.
• Certain coastal areas and islands are subject to additional restrictions to preserve natural heritage.
• For commercial projects, stamp duties (5%) and administrative fees (1.5%) apply upon transfer.

Suitable Legal Structures for an SCI Operating in the Seychelles

Structure	Main Advantages	Constraints/Specifics
French SCI with subsidiary	Allows investment through a controlled local entity	Double layer of administration
International Business Company (IBC)	Attractive taxation, confidentiality	Cannot own certain types of land
Joint Venture with locals	Facilitates access to certain properties	Shared control

Establishing an IBC remains the preferred structure for investment. It allows the SCI to operate legally while benefiting from the advantageous Seychelles tax regime. However, the structure should be adapted according to the type of property targeted: for residential properties in designated areas, a local subsidiary may be necessary.

Tax Implications

• No capital gains tax on real estate profits realized in the Seychelles
• Fixed registration fees for acquisitions
• Reduced or zero taxation on income generated through certain vehicles like the IBC

Specific Regulations Affecting Formation and Operation

Summary list:

• Obligation to obtain government approval before each purchase
• Strict limitations on the number and location of accessible properties
• Need to comply with local environmental standards

Recommended strategies to circumvent or anticipate these obstacles:

• Prepare a solid file demonstrating the environmental and economic compliance of the project
• Opt for a local partnership when it facilitates access to the land market
• Judiciously use multiple separate legal entities if needed

Support from specialized local and international legal experts is crucial to:

• Ensure all formation documents strictly comply with both Seychellois legislation and that of the parent SCI’s country,
• Tax-optimize each operation,
• Effectively protect your investments against any unexpected regulatory risk.

An optimized legal structure offers several unique advantages:

• Significant reduction of risks related to regulatory non-compliance,
• Tax optimization through the combined use of local/international mechanisms,
• Increased ease in collective management or future transfer of held real estate assets.

In summary: carefully choosing your legal structure from the start not only secures your investment but also sustainably maximizes its return.

The Benefits of Buying Real Estate in the Seychelles Through an SCI

Purchasing real estate in the Seychelles through a Real Estate Civil Company (SCI) offers several specific benefits for investors, particularly foreigners.

Facilitation of Asset Management and Transfer

• The SCI allows multiple partners to unite around the same real estate project, facilitating collective asset management.
• In case of inheritance or transfer, it is simpler and more flexible to transfer shares rather than the real estate itself. This avoids classic co-ownership and simplifies division among heirs or partners.
• Concrete example: a family wishing to acquire a villa can create an SCI. Upon a member’s death, their shares are easily transferred to heirs without needing to sell the property.

Potential Tax Benefits

• The Seychelles tax regime is recognized as advantageous for real estate investors: absence of local real estate wealth tax, moderate taxation on certain rental income.
• Income generated from seasonal rentals also benefits from the attractive tax framework offered by the archipelago.
• Certain structures also allow for international tax optimization based on the partners’ tax residency.

Simplification of Administrative Procedures

Acquisition through an SCI often simplifies procedures with local authorities: it is the company that holds the property, not each individual investor.

Deeds related to ownership (purchase/sale/rental) are executed in the name of the SCI, greatly facilitating their collective execution.

Flexibility in Collective Management

Asset	Explanation
Customized distribution	The statutes freely define how to distribute rights/votes/profits among partners
Facilitated entry/exit	A partner can transfer their shares without requiring complex property division
Adaptation to projects	Ideal for family or group investment in a hotel or rental project

Concrete example: several friends wish to invest together in an apartment intended for seasonal rental. The SCI clearly defines their respective rights to received rents and allows each to easily resell their participation if needed.

Risk Minimization for Foreign Investors

• Using an SCI limits personal exposure: only the share capital is committed by each partner.
• It protects against certain disputes related to classic co-ownership (family disagreements, sale blockages).
• Statutory rules also allow strict framing of decision-making modalities to avoid any major disagreement among foreign partners.

In summary, buying real estate in the Seychelles through an SCI offers administrative and legal flexibility, potential tax optimization, and increased security to effectively organize your asset investment while minimizing individual risks.

Understanding Tax Optimization of SCIs in the Seychelles

The Seychelles are recognized as a particularly attractive jurisdiction for tax optimization of Real Estate Civil Companies (SCIs), notably due to a very favorable tax environment, flexible regulation, and facilitated access to international markets.

Reasons for the Seychelles’ Attractiveness for SCIs

• Extremely low or zero tax rates for offshore companies (IBC).
• Absence of withholding tax on dividends, interest, and royalties paid to non-residents.
• No stamp duty on transfers of shares or other securities related to these structures.
• Rapid and digitized administrative procedures, with few local reporting obligations.
• Access to the growing network of bilateral tax treaties sometimes allowing further reduction of the effective tax burden.

Tax Regimes in Place Facilitating Optimization

Type of company	Tax on profits	Dividends/Interest/Royalties	VAT/Indirect taxes
Offshore IBC	0%	0%	0%
CSL (Company Special License)	Low/preferential	0%	Variable

A real estate company registered as an IBC benefits from total exemption from tax on profits, dividends, and capital gains. There is no VAT or indirect taxes for operations conducted outside Seychelles territory.

Taxes Minimized or Avoided by an SCI in the Seychelles

• Local profit tax: effective rate zero for an IBC.
• Withholding tax: absent on outgoing dividends, interest, and royalties.
• Transfer taxes/stamp duty: generally not applicable or very low for transfers of social or real estate shares within the group.

Role of International Tax Treaties

Certain companies can access the growing network of tax treaties signed by the Seychelles. This allows:

• Reduction or even elimination of certain withholding taxes in the country where the properties held by the Seychelles SCI are located.
• Limitation of double taxation risk when repatriating income to the country where the partners or ultimate beneficiaries actually reside.

Essential Precautions to Remain Compliant

List of major precautions:

• Ensure that all operations respect the fundamental principle that the absence of local taxation does not necessarily exempt declaration in the actual state of the final beneficiary.
• Maintain genuine economic substance when required by international anti-abuse legislation (substance requirements).
• Closely monitor any local legislative evolution likely to introduce a global minimum tax or restrict certain benefits granted to purely offshore entities.

Recent examples: The 2022 amendment to the Business Tax Act confirmed total exemption but now imposes more administrative requirements; therefore, regularly verify that your structure remains compliant with new local and international rules (BEPS/OECD requirements).

Common Practical Examples and Benefits Obtained

Typical list:

• Creation of an SCI in the form of an IBC directly holding a rental property located outside the EU: total absence of local taxation on received rents as long as they are not repatriated to another state subject to mandatory declaration; full retention of cash flow reinvestable until final distribution.
• Combined use with a tax treaty between the Seychelles and the target country allowing reduction – or even elimination – of local withholding tax applied before remittance of rents/dividends to the Seychelles headquarters.

Main benefits:

Maximization of available cash, quasi-total neutralization of inter-jurisdictional tax friction potentially up to -30% versus classic European regime; great legal-administrative agility conducive to sophisticated international asset structuring while minimizing audit risks if the setup is correctly declared in each concerned state.

Pitfalls to Avoid When Investing in an SCI in the Seychelles

Common Pitfalls When Creating or Managing an SCI in the Seychelles

• International Tax Implications
  Many investors think they can benefit from a very advantageous tax environment in the Seychelles (no income tax, no corporate tax, no capital gains tax on real estate). However, these advantages can be challenged if the tax residency country of the partners taxes income derived from the SCI. For example: a French resident receiving rents through a Seychelles SCI will have to declare this income in France and risks double taxation if no tax treaty applies.
  Advice: always verify the applicable taxation in your country of residence before any international operation.
• Local Legislative Changes
  Legislations evolve rapidly in some tax havens. A sudden change can affect foreign ownership or impose new unexpected taxes. Practical illustration: an investor who formed their SCI under the old regulation might see their rights modified by a new law restricting access to certain types of properties for non-residents or introducing additional administrative constraints.
  Advice: regularly follow the evolution of local law and be accompanied by a specialized legal expert.
• Risk of Non-Compliance with Local Law
  The creation and management of an SCI require strict compliance with local formalities (registration, annual declaration, respect of local law). Forgetting an administrative step can lead to financial penalties or even forced dissolution of the company.
  Concrete example: omission of annual account filing with the local registry potentially leading to significant fines.
  Advice: systematically rely on a specialized firm to ensure compliance and administrative follow-up.
• Hidden Administrative Costs
  The costs displayed during formation are often attractive but do not always include:

• Mandatory annual fees (account keeping, legal fees)
• Occasional local taxes
• Specific banking costs for international transfers
• Fees related to any statutory change or share transfer

These charges quickly erode the expected effective return for the investor.
Advice: always request a detailed quote including all recurring fees before commitment.

Pitfall	Practical Illustration	Advice to Avoid
Double taxation	French resident taxed despite absence of local tax	Verify tax treaties
Legislative change	New restriction on foreign acquisition	Regular legal monitoring
Non-compliance	Fine due to forgotten account filing	Use specialized firm
Hidden costs	Unexpected billing of annual fees	Demand exhaustive quote

• Difficulty Accessing Reliable Local Expertise
  Obtaining specialized legal advice is sometimes difficult from abroad; not all local providers necessarily have the required level or fully master your international stakes. This can lead to poorly drafting your statutes or omitting certain essential clauses adapted to the Franco-Seychellois context.
  Practical example: inadequate drafting leading to disputes among partners in case of succession/death.
  Advice: prioritize recognized firms with proven international experience and verify their references.

Key Takeaway

“The success of an investment via an SCI in the Seychelles relies as much on its tax attractiveness as on rigorous anticipation of hidden administrative, tax, and legal risks.”

By carefully anticipating these frequent pitfalls—thanks to appropriate professional support—it becomes possible to sustainably secure your investment while avoiding major setbacks.