Investments in the Crypto company in the Seychelles. Pros and cons?

Pros and Cons of Crypto Company Investment in Seychelles

Investments in the Crypto company in the Seychelles. Pros and cons?

Tax exemption and a hands-free regulatory approach are just a few of the benefits that make Seychelles attractive to crypto investors. Starting a blockchain company there is a smart move, but it doesn’t come without risks and important considerations. We have gathered everything you need to know about investing in a Seychelles crypto company below. 

Why is Seychelles becoming a popular destination for crypto investments?

As one of the offshore crypto hubs, Seychelles attracts investors in the crypto space due to its lenient framework and stable business environment. Founders often base their companies there, guarded by the country’s international reputation. Seychelles offers a crypto license that covers a wide range of blockchain activities under one umbrella, and local International Business Companies (IBCs) can benefit from a general tax exemption. 

What are the advantages of registering a crypto company in Seychelles?

In Seychelles, anyone can register an International Business Company (IBC) for crypto and other FinTech activities, as long as they provide the required documentation that includes proof of identity and the absence of previous criminal records. This makes the entry to the local business ecosystem smooth and hassle-free. If you seriously consider opening your crypto business in Seychelles, your IBC will need a license, which can be obtained in under a month with proper legal assistance. 

As we have already mentioned, a Seychelles company is tax-free for entities that conduct their business activities outside the country. Besides, you won’t have to worry about submitting any financial reports, which will give your company more breathing room to innovate and grow. 

How friendly is Seychelles’ regulatory environment for crypto businesses?

In general, the Seychelles crypto license is one of the easiest to obtain. The regulatory environment is less strict compared to other countries due to the absence of ongoing obligations like financial reports or regular audits. The main piece of crypto legislation in Seychelles is the Virtual Asset Services Provider Bill 12 of 2024, and the governmental body regulating VASP companies is the Seychelles Financial Services Authority. There is also a public registry of VASPs that contains key info about all regulated entities: name, address, type of services provided, license issuing date, and license current status. 

What types of licenses are available for crypto companies in Seychelles?

The crypto license in the Seychelles has 4 types that cover most of the widespread blockchain activities, including crypto exchanges, custodial and non-custodial wallets, security token offerings, crypto investments, and the exchange of custody. 

A more detailed breakdown of all 4 license types (A, B, C, and D) is as follows:

1. Virtual Asset Wallet Providers: custodial & non-custodial services;

2. Virtual Asset Exchange: crypto exchange, transfer & conversion services;

3. Virtual Asset Broking: intermediary and facilitation services;

4. Virtual Asset Investment Providers: investment management & advisory services. 

Depending on the type of crypto business you want to run, a specific license will be required. For example, if you want to open a crypto asset exchange, often with additional on/off-ramping services, you will have to opt for the type B license. 

What are the main risks and challenges of investing in a Seychelles-based crypto firm?

Investing in a crypto firm based in Seychelles can be risky for a few reasons. The regulatory system for crypto in the country is still being built and perfected, which can lead to legal uncertainty or compliance headaches down the line. It’s also often seen as a high-risk location by global regulators, making it harder for these firms to work with banks or international partners. 

There’s less protection for investors, too, so if something goes wrong, it might be tough to recover funds. Besides, because of Seychelles’ reputation as an offshore haven, there's a chance the firm could face trust or credibility issues among clients, investors, and banks.

How do Seychelles’ tax policies benefit crypto investors and founders?

The tax benefits offered to local companies mostly depend on how and where they operate. International Business Companies acting under one of the VASP license types are free of corporate income taxes for as long as they offer their services and gain income outside of Seychelles. Domestic companies, on the other hand, may still be subject to taxes, such as a 25% corporate income tax with a rebate of 15% on the first 1,000,000 Seychelles Rupees. This taxation rate is only relevant to the domestic LLCs in Seychelles; IBCs stay fully tax-exempt. 

What due diligence should investors perform before entering the Seychelles crypto market?

To obtain a crypto license in Seychelles, applicants must first establish a properly structured local entity and submit key corporate documents. A detailed business plan, AML/CFT policies, cybersecurity protocols, and proof of initial capital are required as part of the application. The Financial Services Authority (FSA) conducts fit and proper checks on directors and key staff, assessing their background, experience, and integrity. Applicants must also demonstrate local substance with a physical office, qualified personnel, and operational systems in place. Strong internal controls, ongoing reporting, and commitment to compliance are essential to secure and maintain the license.

How do Seychelles compare with other offshore jurisdictions for crypto ventures?

Seychelles stands out among offshore jurisdictions for its ease of company formation and low operating costs, which make it attractive to crypto startups. Compared to places like Mauritius or the British Virgin Islands, Seychelles tends to offer fewer regulatory hurdles but also less legal clarity and investor protection. 

While countries like Costa Rica may promote innovation, Seychelles leans more toward a hands-off approach, which can raise concerns about compliance and long-term viability. Banking access and international reputation also vary widely, and Seychelles may face more scrutiny than some of its peers. For many, it’s a thin line between affordability, flexibility, and the risks tied to perception and oversight.