It depends very much on what your needs are, for instant Cyprus and the Seychelles have a Double Taxation Avoidance treaty which can be beneficial for the owner of such companies as for instant a Cyprus is now part of the EU whch the Seychelles isn't, now a Seychelles company can access the EU markets easily with the Cyprus Seychelles treaty.
Some of the many larger corporatons have an interest in investing in countries where no double tax agreement exists between the countries. In the above mentioned example an internmediary company is established in a jurisdiction with a suitable treaty. For instance, Cyprus has an extensive double tax treaty network with many Eastern European countries. The use of Cyprus companies for inward investment into these countries provides a tax efficient conduit.
When a overeas company directly makes an investment in a Seychelles Company, the withholding tax in the Seychelles will be 15% on dividends and 10% on interest on investment made within the Seychelles.
Now here comes the catch..... When the investments are made in the Seychelles by a way of loan or capital through the Cyprus company, the payouts made from the Seychelles in form of dividends or interest is
tax free, due to DTA Treaty with Cyprus and vice versa.
A Seychelles company has made investments in countries like India, CIS countries or outside of EU with whom Cyprus has treaties very easy and simplifies the entire process. Payouts from a Cyprus Company will be at 0% Tax rate due to the DTA of Cyprus with the Seychelles or any other country that Cyprus has a treaty with. Dividends or interest received by the Seychelles Company will have
0% withholding tax as there is no deduction at source in Cyprus on payouts made to a non-resident.
Useful information: Cyprus companies can incorporate mutual funds in the Seychelles for investments to and from EU and CIS countries, as well as to reach out to countries like South East Asia where the Seychelles has favourable double taxation treaties.
As you may see, there is not really any benefit any longer to have a Mauritius GBC1 company for this purpose, it has been replaced by the Seychelles CSL companies by now.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.
