Set up your business in Seychelles.

A "tax haven" (or "tax shelter") is neither a legal, nor a political, official or scientific term. It`s purely colloquial. It is actually ill-advised to openly call any particular country a "tax haven", because this name is disliked and frowned-upon by government officials. Therefore, in this chapter, we are NOT calling any particular country a tax haven.

A more official name for the same thing is an "international financial centre", although many countries call themselves this way rather aspiringly, without actually having much finance to show for it.

Regardless of how you call it, countries, which offer substantial tax benefits to businesses (in particular, foreign businesses), are generally referred to as tax havens or tax paradises. In this respect, the notion of tax haven is, of course, a relative one. As compared to a 35% income tax in one country, a neighbouring country with 12% tax would very much qualify as a tax paradise - and still fare less than a country with zero taxation on income.

In the traditional sense, a tax paradise is a country where one can register a business which will remain completely tax-free in that country (except for certain government fees), as long as it does not operate inside its own country. Some tax haven jurisdictions have gone even further, by abolishing business and income taxation for all businesses, both domestic and offshore.

A proper tax haven jurisdiction would normally have a whole complete network of regulations, laws and precedents aimed at the attraction of international business to register there. Such attractions may not only include zero taxation on business, but may also feature extremely fast and efficient business incorporation procedures, minimum mandatory reporting, strict secrecy provisions in the financial and corporate sector, a developed financial system and no information-sharing agreements with foreign governments.

Trusts have been used for estate planning and asset protection for centuries, and their usefulness and flexibility for these purposes have been proven by the test of time. The origin of trusts can be found in the eleventh century crusades. Crusading English knights left their manors and estates in the care of trusted friends for safekeeping while themselves away on crusade. However, trusts are not just some dusty, antiquated notion from manorial England!

Not only are trusts a well-established feature of the common law with a staid history, they are quite resilient and endure today as an innovative element of modern legal systems. The flexible character of trusts has allowed them to be adapted to the ever-changing global legal and financial landscape, meaning new uses and adaptations of trusts are constantly being developed to suit the needs of property holders worldwide. In fact, trusts have proven so useful and popular they have expanded beyond common law jurisdictions, with a number of civil law countries recently modifying their codes to allow for recognition of the trust relationship.

Trusts were introduced in the Seychelles in 1994 with the passage of the International Trusts Act of 1994. Since that time Seychelles International Trusts have come into widespread use, and are widely recognized for the flexibility they afford to settlors, and the ease with which they can be established.

The annual renewal fees are the annually recurring government and professional fees that You (or, rather, Your offshore company) have to pay in order to continue and maintain the company in good legal standing as per the laws of the state of registration, for as long as the company exists. These costs can be compared to taxes and the administration overhead of a regular "domestic" company. Obviously, the total maintenance costs for an offshore company are normally much less than for a business based in any high-tax country.

You do use them. More exactly, Your offshore company does. Apart from lending his office address to be used as the legal address of Your IBC, the Registered Agent is also legally responsible for safe custody and update of certain corporate documents - namely, the Memorandum and Articles of Association of the IBC, the Register of Members or a copy thereof, the Register of Directors or a copy thereof, copies of all Resolutions, notices and filings produced by the company during its course of existence. Furthermore, unless the directors of the company have resolved otherwise, the Registered Agent is also the custodian for all Minutes of the meetings and Resolutions of Shareholders, and all Minutes of meetings and Resolutions of Directors. It is the duty of the Registered Agent to keep these documents up-to-date and available for inspection by the directors, shareholders and owners of the IBC. Finally, the Registered Agent acts as the official intermediary between the offshore company and the Seychelles Government, in particular what concerns timely payment of the Government renewal taxes. All in all, the Registered Agent performs several important legal functions, without which the IBC would not be able to legally exist.

All offshore jurisdictions require that all international business companies (non-resident companies, offshore companies, etc.) have an address in that country. This is called the Registered Address. The formal purpose of this address is to have an exact whereabouts of the company for the purpose of official correspondence or inquiries from the government. Most often these are just some annual report forms and the annual government fee notices that get sent to the Registered Address. Nevertheless, all companies must have such address, in their country of registration.

Most offshore jurisdictions also require a company to have a Registered Agent within their territory. Usually the Registered Agent is located in the Registered Address of the company. The purpose is again the same, to have some person (or, usually, a professional services firm) who acts as an "intermediary" between the government and the particular offshore company.

The name and address of the Registered Agent are on public file in the Registrar of Companies, so this information is accessible to anyone who cares to ask.

Provision of the Registered Address and Registered Agent are standard domiciliation services, provided to all their clients of Fidelity Corporate Services Ltd at a competitive fixed annual fee.

A shareholder is a person (a private individual or a corporate body), who is the formal holder of shares in a particular offshore company. So, it basically is what the name suggests - the "holder" of shares. However, in respect to offshore companies, a distinction must be made between "holding" the shares and actually owning them. Quite often the shareholder may hold shares for the benefit and on behalf of another person. Such shareholder would be called a "nominee shareholder". In such instance, the other person - who is accordingly the real owner of the shares - is called "the beneficial owner". Effectively, then, a nominee shareholder acts as a "shield" for the beneficial owner, preventing general public from seeing who is the real owner of the IBC.

In the nominee shareholding relationship, the beneficial owner is the person who is the real, de-facto owner of the shares, entitled to all gains, profits and benefits accruing to such shares. The beneficial owner would also be the one who decides on the eventual sale or transfer of shares. So, not all beneficial owners are shareholders and not all shareholders are beneficial owners - while, certainly, it is also possible that both are the same person.