Welcome to Mayfair Trust Group

The popularity of the Seychelles IBC (tax exempt company incorporated under the International Business Companies Act 1994) and increased global profile of Seychelles as a serious offshore financial centre have paved the way for development into more value-added Seychelles financial services products, including Trusts, Limited Partnerships, Mutual Funds and the CSL (Company Special Licence).

The CSL is a Seychelles domestic company (incorporated under the Companies Act 1972), which is granted a special licence under the Companies (Special Licence) Act 2003. Unlike the tax exempt IBC, the CSL is tax resident in the Seychelles, and may access Seychelles' growing network of Double Taxation Avoidance Agreements. The CSL has substantial appeal (particularly to international groups), as a tax-efficient vehicle for permitted uses including, in particular, an investment holding company, to hold and license out intellectual property or as a services company (eg. management, consultancy, etc).

A CSL is liable to Seychelles business tax at the rate of 1.5% on its world-wide taxable income (which may be avoided by tax credits - see below). A CSL is exempt from Seychelles withholding taxes on dividends, interest and royalties and from Seychelles stamp duty on property transfers, share transfers and other business transactions.

China's recently enacted Enterprise Income Tax ("EIT") Law (effective from 1 January 2008) introduced a new uniform income tax regime which applies to both foreign and domestic enterprises. Under the EIT Law, foreign investors are now exposed to higher Chinese taxes than in the past. China is also becoming increasingly serious about tax collection (Chinese tax collection was up by approximately 30% for year ended 2007).

Under the EIT Law Chinese companies are generally subject to 20% Chinese tax on payments to non-residents. It is anticipated that many foreign owned businesses will enjoy a concessionary 10% withholding tax rate, but which may be further reduced using a Double Taxation Avoidance Agreement ("DTA").

Seychelles / China DTA

Use of a Seychelles CSL, in conjunction with the Seychelles / China DTA, provides significant scope to reduce Chinese tax exposure. The Seychelles / China DTA caps Chinese withholding tax on dividends at 5% and 10% on interest and royalties, provided that the CSL has its effective management in Seychelles (and the CSL is not tax resident in China). In contrast, while the Hong Kong / China DTA also caps Chinese withholding tax at 5% if the Hong Kong company owns 25% or more of the shares in a Chinese company, the Hong Kong / China DTA only caps Chinese withholding tax at 10% if the Hong Kong company owns less than 25% of a Chinese company. The Seychelles / China DTA therefore has a distinct advantage over the Hong Kong / China DTA in such cases, which will be relevant to Chinese investment mutual funds and other non-controlling foreign investors.

Another significant benefit under the Seychelles / China DTA is avoidance of Chinese tax on capital gains made by a CSL selling shares held by it in a Chinese company if the CSL holds less than 25% of the issued shares in the Chinese company and the assets of the Chinese company do not principally consist of immovable property (real estate). Once again, this will be of interest to China oriented mutual funds and other non-controlling investors. China has already indicated plans to enforce taxing of capital gains on Chinese share disposals.

A further attractive benefit under the Seychelles / China DTA is that no tax is payable in Seychelles (on Chinese-sourced income of the CSL) if Chinese withholding tax of at least 1.5% is paid on payments made by a Chinese company to a CSL. That is, under the Seychelles / China DTA withholding tax paid in China can be credited and set-off against the 1.5% Seychelles business tax payable by the CSL to fully discharge all business tax liability in Seychelles.