Key Takeaways
- Seychelles does not levy a separate capital gains tax, and the article explains the legal basis behind this absence.
- Asset disposals are treated differently rather than through a dedicated capital gains charge, which still matters for how transactions are assessed.
- Companies, IBCs, individual investors, and non-residents each see distinct practical effects, including specific considerations for real estate disposals.
- Narrow exceptions can fall within scope, and the article reviews the outlook on whether such a tax may be introduced in future.
Introduction: Capital Gains Tax in Seychelles
Seychelles does not levy a capital gains tax. No statute imposes a charge on profits from the disposal of shares, real estate, or other investments, and the question of capital gains tax in Seychelles is answered by what the law omits rather than what it prescribes. The country runs a territorial income tax system, administered by the Seychelles Revenue Commission, under which only Seychelles-sourced business income is taxed.
This article explains why no separate gains charge exists, how asset disposals are treated instead, and the narrow situations where a profit can still attract tax. It is most relevant to foreign business owners, investors, and their advisers weighing incorporation through a Seychelles International Business Company or holding assets via an entity registered there.
Does Seychelles Levy a Capital Gains Tax? The Short Answer
No. Capital gains are not subject to tax in Seychelles, and there is no standalone capital gains regime in any local statute.
One qualification matters for planning. Where a gain forms part of the trading profits of a business carried on in the territory, that profit can fall within the general business tax, so the character of a transaction still counts.
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The Legal Basis for the Absence of Capital Gains Tax
The governing instrument is the Business Tax Act 2009. It imposes tax on the taxable income of a business after allowable deductions, and it contains no schedule, computation, or charging provision for capital gains.
Seychelles applies tax on a territorial basis. Income is treated as locally sourced only where it arises from activities conducted, goods situated, or rights used within the physical territory, which leaves gains on foreign assets outside the net entirely.
Two further statutes reinforce the position. The International Business Companies Act 2016 exempts IBCs from corporate income tax on income earned outside the country, while the Succession Act 1977 confirms the absence of estate, inheritance, and gift taxes.
Unlike jurisdictions with a dedicated chargeable-gains code, Seychelles has no equivalent provision in any of its tax legislation. There is no relief to claim because there is no charge to relieve.
Why There Is No Separate Capital Gains Charge: How Asset Disposals Are Treated Instead
Disposals are not run through a separate gains calculation. Business tax applies to overall taxable income, less deductions, with no distinct disposal computation layered on top.
A firm can sell assets, exit an investment, or transfer property without facing a gains charge, including where the transaction occurs outside the country. The absence of any taxing provision is what produces the result, not an exemption that must be applied for.
Allowable deductions against assessable business income include losses on property acquired for profit-making and depreciation. That is the closest the regime comes to recognising capital movements, and it sits within ordinary income computation rather than a gains schedule.
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What Counts as a Chargeable Asset Disposal (and Why It Still Matters)
The labels still matter even without a gains tax. If a disposal is properly characterised as part of a trading activity carried on in the territory, the profit is assessable business income; if it is a genuine capital realisation, no charge arises.
For an IBC, income genuinely sourced outside the country attracts zero corporate tax. This covers dividends, capital gains on foreign assets, interest on foreign deposits, and royalties from foreign licensees.
Foreign-sourced passive income, gains included, is exempt only where the company meets adequate economic substance. Without that substance, the territorial exemption can be put in question.
One transfer-cost point deserves attention. IBCs remain exempt from stamp duty on instruments relating to transfers of property, shares, debt obligations, and other securities, with a single exception.
The stamp duty exemption does not extend to any instrument relating, directly or indirectly, to Seychelles immovable property. Domestic real estate is taxed on its own terms regardless of the entity holding it.
What the Absence of Capital Gains Tax Means for Companies and IBCs
For a Seychelles IBC, the practical effect is straightforward: zero corporate tax on genuinely foreign-source income, no withholding tax on outbound dividends, and no charge on gains from foreign assets. The country offers two principal corporate frameworks, standard domestic companies under the Companies Act 1972 with its 2024 amendments, and IBCs under the International Business Companies Act 2016.
The treatment diverges once activity touches local ground. Domestic companies pay business tax only on Seychelles-sourced income, while an IBC that establishes a permanent establishment on the island, through an office, local staff, or real economic activity, brings the attributable income into charge under the Business Tax (Amendment) Act 2018.
Substance obligations shape who keeps the exemption. IBCs engaged in "relevant activities" must demonstrate genuine economic substance under the Economic Substance Act 2021.
| Entity / income | Treatment |
|---|---|
| IBC, foreign-source income (dividends, interest, royalties, gains) | 0% corporate tax, subject to substance |
| IBC with a local permanent establishment | Attributable income taxable |
| Domestic company, first SCR 1 million of local profits | 15% |
| Domestic company, local profits above SCR 1 million | 25% |
| Capital gains, any entity | Not charged |
The activities that trigger full substance testing include banking, insurance, fund management, finance and leasing, headquarters, shipping, holding company business, intellectual property, distribution, and service centres. Pure equity-holding and real estate holding companies face lighter requirements, principally local statutory filings together with a registered agent and registered office in the territory.
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What the Absence of Capital Gains Tax Means for Individual Investors and Non-Residents
A foreign investor faces no capital gains tax on disposals, and foreign-sourced income such as interest and dividends received from abroad is not taxed. Repatriation of investments or income generally carries no restriction.
Some cross-border payments do attract a charge, though these are withholding taxes rather than gains taxes. A 15% withholding applies to dividends and royalties paid to non-residents, and to interest paid on loans by non-banking companies.
Digital assets follow the general rules. With no capital gains tax in place, long-term personal crypto holdings are typically untaxed, and foreign-source crypto income stays within the territorial exemption where substance conditions are met.
Disposals of Real Estate and the Main-Residence Question
Selling property produces no capital gains charge. The taxes that attach to Seychelles real estate are transactional and annual rather than gains-based.
- Stamp duty of 5% of the purchase price applies on acquisition of immovable property.
- An annual immovable property tax of 0.50% of market value applies to non-Seychellois owners, doubled from 0.25% effective 1 January 2024.
- First-time foreign buyers of residential property after 1 January 2020 receive a one-year exemption from the annual property tax.
- Foreign nationals and foreign corporations must obtain government sanction before purchasing, with an application fee of 1.5% of the purchase price.
The acquisition rules were reset in early 2025, when a moratorium on most foreign property purchases was lifted. Following that reform, foreign buyers may acquire only in designated areas, within set size and price thresholds.
No principal-private-residence relief exists, and none is needed. A main-residence exemption only has meaning where gains are taxed in the first place.
Narrow Charges and Exceptions That Fall Within Capital Gains Tax's Scope
The one realistic path to tax on a gain is re-characterisation. Where a profit forms part of trading activity, it can be assessed as business income rather than treated as a capital realisation.
Intellectual property is the main carve-out from the foreign-source exemption. Income earned anywhere in the world from IP rights held in Seychelles is deemed locally sourced and taxable, except for the portion of qualifying patent income that can be allocated to research and development carried out in the territory.
The deeming mechanism arrived with the Business Tax (Amendment) Act 2021, in force from 16 September 2021. It moved the system toward a hybrid model in which certain income is treated as locally derived unless the company meets defined criteria.
Two further obligations sit alongside, neither of which is a gains tax but both of which affect the foreign-owned entity:
- A Corporate Social Responsibility tax of 0.5% of revenues, payable monthly, applies to companies with turnover of at least SCR 1 million.
- Registration on the SRC electronic platform and annual XML filings for non-resident account holders are mandatory under the CRS and automatic exchange of information regime, with enforcement tightened after OECD peer review.
Outlook: Will Seychelles Introduce a Capital Gains Tax?
No government proposal or legislative consultation to introduce a standalone capital gains tax is on record. Reform energy is directed at substance, information exchange, and OECD Pillar Two alignment rather than new gains taxation.
International standing has improved on several fronts. Seychelles was removed from France's blacklist of non-cooperative jurisdictions on 12 May 2025, and engagement with global minimum tax standards has continued through technical work with the African Tax Administration Forum.
The position with the European Union remains under review. Seychelles stays on the EU's Annex II grey list, with a comprehensive review initiated in March 2025, evaluation scheduled before the Peer Review and Monitoring Group in December 2025, and a Council decision on delisting expected in February or March 2026.
Compliance requirements are still being tightened. The International Business Companies (Amendment) Act 2025 introduces enhanced disclosure of nominee shareholder arrangements and penalties for non-compliance, consistent with a reform path centred on transparency rather than the creation of a gains charge.
Conclusion
The absence of a capital gains tax is, for most non-resident owners, the single most commercially significant feature of the Seychelles tax framework, yet the decision to incorporate or hold assets there should rest on how the treatment of disposals applies to the specific structure being used, not on the headline absence alone. Real estate, narrow exceptions, and the unresolved question of future reform each carry weight that the headline cannot bear on its own.
The one thing worth resolving before any structure is finalised is whether the transactions being planned fall within those narrow exceptions, because that is where the practical difference between a clean exit and an unexpected charge actually lives.
How Expanship Can Help Your Business in Seychelles
Expanship advises foreign owners on the practical side of the no-capital-gains position, from confirming how a planned disposal is characterised to keeping an IBC's substance and filings in order so the territorial exemption holds. The same team handles the wider compliance work a foreign-owned entity needs across its life cycle.
- Company incorporation, including IBCs and domestic structures
- Registered agent and registered office services
- Tax registration and preparation of required filings
- Ongoing compliance and economic-substance management
- Accounting and bookkeeping support
- Introductions to banking partners
To discuss your structure or a specific transaction, contact Expanship Seychelles.
Frequently Asked Questions
No. Seychelles has no capital gains tax, and no statute imposes a charge on profits from selling shares, real estate, or other investments. The only way a gain becomes taxable is if it forms part of trading profits assessed as business income under the Business Tax Act 2009.
An IBC pays zero corporate tax on income genuinely sourced outside the country, including capital gains on foreign assets, dividends, and foreign interest. This exemption depends on the company meeting adequate economic substance where it carries on a relevant activity under the Economic Substance Act 2021.
There is no capital gains tax on the sale of real estate. Property is instead subject to transactional and annual charges, including 5% stamp duty on purchase and, for non-Seychellois owners, an annual immovable property tax of 0.50% of market value effective from 1 January 2024.
Capital gains and foreign-sourced income are not taxed, but certain cross-border payments carry a 15% withholding tax. This applies to dividends and royalties paid to non-residents, and to interest on loans made by non-banking companies.
Yes, where it is re-characterised as trading rather than a capital realisation. If a gain forms part of business activity carried on in the territory, it can be assessed as business income, which makes the trading-versus-capital distinction worth attention before a transaction.
There is no public proposal or consultation to do so. Current reform is focused on economic substance, automatic exchange of information, and OECD Pillar Two alignment rather than the introduction of new capital gains taxation.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
