Protected Cell Company registration in the Seychelles takes approximately 10 to 20 working days. The Seychelles PCC incorporation fee includes: Seychelles PCC name availability confirmation and reservation Payment of first year's Seychelles legal and initiation fees Submission of applications that details PCC company's executive officers (US$100,000 authorized shared capital divided into 100,000 shares, a minimum of one share may be issued, bearer shares - permitted) Applicant appointment of director and shareholders roles for PCC company (appointed electronically) Preparation & filing of Memorandum & Articles of Association at Registry Compliance with minimum local domicile requirements: provision of the registered address and registered agent in Seychelles for the first year The following documents will be posted to you (Note: these documents are sent to you through FedEx Express Mail Service): Original Certificate of Incorporation Printed bound copy of Memorandum & Articles of Association Minutes of the First Meeting of the Board of Directors Issuance of shares, Register of Directors and Shareholders Share Certificates and Completed Members Register
Premier Package
£ 1616.00
Renewal fees from £1,901
Seychelles PCC incorporation in the Seychelles takes approximately 10 to 20 working days. The Seychelles PCC registration fee includes: Seychelles PCC name availability confirmation and reservation Payment of first year's Seychelles legal and initiation fees Submission of applications that details company's executive shareholder (US$100,000 authorized shared capital divided into 100,000 shares, a minimum of one share may be issued, bearer shares - permitted) Applicant appointment of shareholder role for PCC company (appointed electronically) Preparation & filing of Memorandum & Articles of Association at Registry Compliance with minimum local domicile requirements: provision of the registered address and registered agent in Seychelles for the first year Coddan provides a company nominee director service for one year The following documents will be posted to you (Note: these documents are sent to you through FedEx Express Mail Service, and are to be completed upon arrival): Original Certificate of Incorporation Printed bound copy of Memorandum & Articles of Association Minutes of the First Meeting of the Board of Directors Issuance of shares, Register of Directors and Shareholders Share Certificates and Completed Members Register A pre-signed, undated letter of resignation from the nominee director General Power of Attorney signed by Nominees An indemnity Letter for General Power of Attorney A nominee service agreement which provides for the indemnification of the nominees
Deluxe Package
£ 1826.00
Renewal fees from £2,011
Seychelles PCC start-up in the Seychelles takes approximately 2 to 5 working days. The Seychelles PCC formation fee includes: Seychelles PCC name availability confirmation and reservation Payment of first year's Seychelles legal and initiation fees US$100,000 authorized shared capital divided into 100,000 shares, a minimum of one share may be issued, bearer shares - permitted Preparation & filing of Memorandum & Articles of Association at Registry Compliance with minimum local domicile requirements: provision of the registered address and registered agent in Seychelles for the first year Coddan provides a company nominee director service for one year Coddan provides a company nominee shareholder service for one year The following documents will be posted to you (Note: these documents are sent to you through FedEx Express Mail Service, and are to be completed upon arrival): Original Certificate of Incorporation Printed bound copy of Memorandum & Articles of Association Minutes of the First Meeting of the Board of Directors Issuance of shares, Register of Directors and Shareholders Share Certificates and Completed Members Register A pre-signed, undated letter of resignation from the nominee director General Power of Attorney signed by Nominees An indemnity Letter for General Power of Attorney A nominee service agreement which provides for the indemnification of the nominees Declaration of Trust from the Nominee Shareholder
Incorporation Legal Requirements
Company Subscribers may be resident outside the Seychelles Each company must have at least 2 directors. The number of company directors is not restricted. The position of a company director may be occupied by a corporate body or a private individual. A director may have any national identity There is no requirement for a resident secretary Each company must have at least 2 shareholders. The names and addresses of shareholders are not available to the public. Moreover, incorporation documents do not specify the name or identity of any shareholder, and these do not appear in any public record One and the same person may occupy the position of a company director and shareholder There is no requirement for appointing a local director and shareholder The company is required to maintain a registered office in the Seychelles There is no paid-in capital requirement The minimum issued and paid-in capital may consist of one share that is fully paid up Shares may be issued with or without par value Shares may be issued in any recognizable currency or in more than one recognizable currency PCC records and accounts do not have to be held by or filed with the authorities
PROTECTED CELL COMPANY FORMATION: SEYCHELLES PCC ADVANTAGES AND BENEFITS
When we talk about protected cells, we are not making some sort of botanical study. A protected cell is not to do with genetic engineering; it is a piece of man-made engineering, to provide a juridical solution to identified business problems. The protected cell company is in appearance a simple concept. Its simplicity hides an innovation and also the potential of this innovating concept. There is a single parent company - a Protected Cell Company, within which there are sub-divisions, which are called "cells".
Each cell is allocated in some fashion or other its own assets (the cellular assets); the PCC itself has its own assets, and these are non-cellular. Each cell is an independent entity capable of operating independently from all other cells, or operating together with the other cells and independently of the parent. There is segregation of the assets contained within the cell, and it follows from this that there is a separation of the liabilities arising from those assets within that cell. The purpose of this is that the failure of a cell or the failure of the company does not affect the onward viability of a good cell.
With correct advice an Offshore company or a Tax Exempt company can afford many significant and legal tax savings throughout the world, provide you and your company with a competitive advantage, afford confidentiality/security and perhaps even save on future inheritance taxes. However, as the exact benefits that are available to you and your company will depend greatly on nationality, location and other such factors it is always recommended that you first seek appropriate professional advice before registering your company.
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In simple terms, a PCC is a company which - in addition to its main, "core" level - contains a number of segregated parts, or "cells". Each cell is legally independent and separate from the others, as well as from the "core" of the company. The undertakings of one cell have no bearing on the other cells. Each cell is identified by a unique name, and the assets, liabilities and activities of each cell are ring-fenced from the others. If one cell becomes insolvent, creditors only have recourse to the assets of that particular cell and not to any other. How to Incorporate a Protected Cell Company in Seychelles: Click Here for More Details
Protected cell companies are a welcome arrival for businesses who would have previously chosen a rent-a-captive scheme over the (more costly) formation of an in-house captive insurance company for the purpose of self-insurance. In traditional rent-a-captive schemes, unrelated businesses "rent" the same captive to insure their risks; consequently, there is no guarantee that funds provided by one participant will not be used to cover unjustified claims of another. In contrast, the structure of a protected cell company provides the necessary protection for each participant's assets.
Despite being a relative newcomer to the corporate world, the flexibility of PCC companies have caused their uses to diversify in recent years. Protected cell companies are used to securitize insurance risk against catastrophic losses, for example; their very structure also makes them an ideal entity for the cost-effective operation of umbrella mutual funds.
Aside from the above, the astute offshore practitioner can employ an offshore protected cell company as an effective asset protector and privacy enhancer. With an offshore insurance corporation, it is market practice that provides tangible benefits; with the protected cell company, it is the structure of the entity itself - think of a house with a locked front door, and rooms inside, each with a separate lock and key.
Protected Cell companies have - in concert with other entities - been used to construct what has been called "an impenetrable wall" against creditors and prying eyes. Whilst these claims can only be tested by time, this novel use of a PCC for asset protection and financial privacy is an interesting approach and a valuable piece of intellectual property.
Protected Cell Companies (PCC) are formed under the Protected Cell Companies Act, 2003 (the Act). A PCC is a Seychelles domestic company that has the right to create one or more identifiable cells so as to segregate and protect cellular assets as permitted under the Act. While each cell created by a PCC is separately identifiable and may have its own cellular assets, no cell will constitute a legal entity separate from the company (i.e. only the PCC is a separate legal entity).
The directors of a PCC have a duty to keep cellular assets separate from non-cellular assets, and to keep the assets attributable to each cell separate from the assets attributable to other cells. Liabilities attributable to a particular cell of a PCC cannot attach the assets of other cells. As in other jurisdictions, the PCC has particular use and appeal for captive insurance and collective investment scheme applications. It is likely that approval will be limited to these areas and for non-domestic business only.
Cell Shares and Cell Share Capital: A protected cell company may, in respect of any of its cells, create and issue shares ("cell shares") the proceeds of the issue of which ("cell share capital") shall be comprised in the cellular assets attributable to the cell in respect of which the cell shares were issued. The proceeds of the issue of shares other than cell shares created and issued by a protected cell company shall be comprised in the company's non-cellular assets. A protected cell company may pay a dividend (a "cellular dividend") in respect of cell shares.
Name and Memorandum of Protected Cell Company: The name of a protected cell company shall without prejudice to the provisions of section 4 of the Companies Act 1972, include the expression "Protected Cell", "PCC" or any cognate expression approved in writing by the Authority. The memorandum of a protected cell company shall state that it is a protected cell company.
Seychelles Protected Cell Company Formation from only £1,450! Free name check and advice on your chosen name. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. Provision of Seychelles registered agent and registered office services. All government and filing fees are included in the cost of our incorporation pack. All certificates and documents will be sent directly to you by express-mail service immediately following the formation of your company.
THE FOLLOWING UPGRADES CAN BE ADDED TO THE ABOVE PACKAGE:
1. Company Pliers Seals - £20.00. 2. Nominee Director Service for 12 months - £166.00. 3. Company Shareholder service for 12 months - £110.00. 4. Certificate of Good Standing - £80.00. 5. Apostilled Certificate of Incorporation - £100.00
Unless and until a protected cell company has complied with the provisions of this section, it shall be deemed not to be a protected cell company. Each cell of a protected cell company shall, subject to the approval of the Authority, have its own distinct name or designation.
What is the Purpose of the Protected Cell Company? It was designed to fill a gap in the business world and especially in the world of international business. It was aimed at improving the techniques for finance and for investment. Inevitably, there are in some way tax breaks associated with virtually anything that happens offshore. But the overriding purpose of this was for business efficiency.
It was needed to correct certain deficiencies in the older systems and in the concepts of a company. The concepts were not flexible enough. One could just about do the same as having a group of cells by having a string of subsidiaries, but this had many legal problems, and was very expensive, unwieldy and a great burden. The real problem was that although one might have got there in some fashion or other, there was a risk of contagion - a risk that a claim or a liability might flow from one asset of one company or division and affect another one. This was sufficiently worrying that a new product was required.
This new product was driven essentially and initially by demands inside the insurance world, and here the biggest pressure came not from the insurers, but from the insured, because, as insurance premiums rose through the 80s, customers seeking insurance found that some risks either could not be covered or had become too expensive to cover. This led to the formation of the captive insurance company.
If One is Going to Form a Captive Subsidiary, Why not Form it Offshore? At least the premiums that pass into the captive can roll up gross, and be available to fund the contingencies for future claims, and perhaps to provide some further benefits. Also, the offshore world at that stage did not have quite so many regulations as the onshore world.
Please Note: The following documents will have to be submitted when making an application for incorporation of a PCC:
A covering letter listing the documents submitted and the number of their copies.
An application form containing information about company directors, secretary, shareholder, registered office address, auditors, legal advisors and share capital.
Memorandum and Articles of Association.
Declaration made by directors and secretaries.
Declaration of Registered Office Address.
A business plan Due diligence documents (a certified copy of passport, a certified proof of residential address, certified copies of original bank references, a copy of Curriculum Vitae).
Completed personal questionnaire for each director, secretary and shareholder.
An application fee plus tax.
If a company is a subsidiary of a foreign entity or resides in another jurisdiction, an applicant must submit accounts of the most recent financial year.
A Declaration of Compliance authenticated by a notary practicing in the Seychelles.
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PROTECTED CELL COMPANIES & THEIR USES
What is the Purpose of the Protected Cell Company? It was designed to fill a gap in the business world and especially in the world of international business. It was aimed at improving the techniques for finance and for investment. Inevitably, there are in some way tax breaks associated with virtually anything that happens offshore. But the overriding purpose of this was for business efficiency. It was needed to correct certain deficiencies in the older systems and in the concepts of a company.
The Concepts were not Flexible Enough: One could just about do the same as having a group of cells by having a string of subsidiaries, but this had many legal problems, and was very expensive, unwieldy and a great burden. The real problem was that although one might have got there in some fashion or other, there was a risk of contagion - a risk that a claim or a liability might flow from one asset of one company or division and affect another one. This was sufficiently worrying that a new product was required. This new product was driven essentially and initially by demands inside the insurance world, and here the biggest pressure came not from the insurers, but from the insured, because, as insurance premiums rose through the 80s, customers seeking insurance found that some risks either could not be covered or had become too expensive to cover.
This Led to the Formation of the Captive Insurance Company: If one is going to form a captive subsidiary, why not form it offshore? At least the premiums that pass into the captive can roll up gross, and be available to fund the contingencies for future claims, and perhaps to provide some further benefits. Also, the offshore world at that stage did not have quite so many regulations as the onshore world.
The single captive was only for the big boys, so how did the smaller boys get into this? Some of them could group together: they had a common sort of interest, a common risk. It might be a business risk. It might be a professional risk. They joined together as a multiple group to form their captive. But the problem there was the allocation of costs and the allocation of losses on claims.
One Group Member Might be Rather Better than Another Group Member: Then the development went further into the "rent-a-captive". The person needing insurance did not form his own captive. Somebody else did that for them. Outside professionals ran an operation which had underneath it a series of captives that one could rent. The professionals ran and owned it, and the customer had his subsidiary captive, which he rented. This improved the deductibility of premiums. But there was always still the shadow of the contagion issue, and, of course, if the parent failed, that brought down the whole thing like a pack of cards.
The Insurance World was Joined by the Investment World: It had the same contagion problems. Funnily enough, the unit trust did not have the contagion problem, but it was believed by the market that investors in civil law countries would not buy trust units, but would buy shares. Hence a new product was needed, and it had to come through legislation.
We are not going to go into the legislation in any depth, so as not to make invidious comparisons between jurisdictions with very similar provisions. If one is looking at protected cells and the use of them, it is worthwhile checking the legislation: one needs to look for the differences. It was Guernsey that kicked off protected cell legislation, and that was really because Guernsey was, and still is, the European home of captive insurance.
It was Rapidly Followed by Most of the Offshore World: Other jurisdictions do not always call it by the same name. In the Cayman Islands, where we think it is limited to a use in mutual fund investments, they call it the Segregated Portfolio Company, and in Bermuda they call it the Segregated Accounts Company. There are differences and different legal issues, but basically they all have the same aim - cellular ring fencing. While all that was happening in the offshore world, the onshore world was not idle either: it was developing the use of securitisation for investment purposes, and that spread through South America, the United States and parts of Europe.
As far as Development is Concerned, there are Two Branches: The first branch is the public sector, but we shall pass over that quickly, because it is largely self-explanatory. All this is to be seen in the context of the perceived need for sophisticated new investment products. The cells here can be extremely useful, because the investment can be split: there can be tranches of assets, guaranteed products, more risky products and different returns, and one can space all that out through the cells. All this is done through the issue of shares in the cell by the parent, or, perhaps, through investment policies and the like, issued by the parent.
The other branch of development has been in the private world. It is really an echo of the public world, but my impression is that the industry is trying to adapt the public investment structures for more specialist individual markets, because within this offshore structure one can hold a tax-driven investment, and, indeed, also benefit from a form of asset protection, or both.
When we use the expression "asset protection" in protected cells, what I really mean is that one can actually get one's own asset into it and preferably the management of one's own assets - which in the context of world stock markets today may prove more profitable than those selected by professional managers of investments.
In the United Kingdom, people talk about using cells for CGT deferral. We have my doubts about this, but the device may not be that easy to use, particularly if the taxpayer is making a direct investment into an asset in the cell, because there has to be a minimum of twenty investors to get over the 5% rule. If the taxpayer makes the investment through a single-premium policy, he is going to have the problem of getting out of the policy at the end of the day without a tax charge.
But in the United States, there are, as we have heard, advantages in deferred annuity contracts, and we are told that they can be refined and made better through protected cell companies and that there is much interest in this in the British Virgin Islands. In all these cases, the investor essentially has his own cell - the "rent-a-cell", which is really the protected cell equivalent of the rent-a-captive. This is very much the flavour of the month. The concept is that a life insurance company, authorised in an offshore jurisdiction, issues a single policy to a single investor, linked to assets in a particular cell.
There is the idea, but the aim is an age-old aim. It is tax-free roll up. The investor is hoping that the final returns are either tax-exempt or taxed at a lower rate. We think there is a lot of mileage there.
If the protected cell company is aggressively structured, this individual cell or that individual policy could end up being simply attacked as yet another colourful device. We are not getting into the sham concept here. We think that is a grossly over-inflated subject. But it does have the connotations. We do not know what the answer to that is, but we think if the protected cell company is over-aggressively marketed, and if it goes over the line and fails the elephant test, the practitioners responsible may do us quite a disservice, both specifically and generally.
Our Second Area of Concern is More a Point of Law: We have in mind the use of cells to ring-fence liabilities, and the extent of its efficacy in the event of insolvency of another cell or the company itself. Take a company with a number of cells, into each of which have been injected valuable assets. Suppose one of the cells goes belly up, and creditors lose their money. How does the adviser of the creditor see this? He is looking at a company.
The Company Says it has a Number of Cells: It says that the domestic legislation provides that they are all separate and the creditor cannot get at the other cells. But is that necessarily the case? The problem is, it seems to me, that the guts of the assets are quite likely to be in a country outside the country whose laws govern the cell. How are the courts of that particular country going to look at this? Will they recognise the cell legislation of another country? Will they recognise the ring fencing? If they do, they burst wide open the 150 year-old concept of pari passu treatment of creditors and assets in corporate insolvency. Are they going to do it? We are not aware that there has been any case about this, but we do have a nagging concern.
The Problem is Always the Bad Case: If somebody overcooks this, tries to be too clever with protecting an asset, it is just going to look like abuse. We think we have all seen cases where the courts have said, "It stinks and we're going to say it stinks, and then we're going to find a reason why it stinks." And they get round the legal niceties. That may be one end of the spectrum. The other end of the spectrum is, we think, that there is a real place for these things. The onshore world is adopting securitisation concepts which are very similar, and this gives a little bit of support for the protected cell company, provided it looks good and makes sense, and provided it is not against public policy.
Where Do We Go to Now? This PCC is a very new concept, and has only been around for about five years. We are going to see how it goes, but it is extraordinarily innovative. It has bust open the traditional corporate view, and is a very different beast. There are times when we actually cannot work out how it works at all, legally. On analysis, we think it is a difficult legal concept, having a company with segregated assets and liabilities. But it is going to have a lot of uses. There are going to be many areas where it is going to fulfil a use function, particularly where there is any sort of collective or group element - maybe in the field of the provision of fiduciary services. Nominee companies and nomineeships may be replaced by a whole series of cell nominees.
The PCC may be used to provide safer pension funding, and here we should mention that we have heard that the UK Revenue has recently approved Guernsey retirement annuity trusts. This has a rather interesting connotation. The taxpayer does not get a deduction for the premium going in because it does not qualify, but those deductions in the United Kingdom are being eroded away and capped. But if he can get his assets into something that he likes, which grows gross in Guernsey or wherever, and comes back in a nice form, this could be a useful way of using the cell.
We are going to see, we are sure, the use of the rent-a-cell in this way, and the reason is a simple pragmatic one. It costs a fortune to set up these institutions. But the rent-a-cell provider just has one launch, and then bolts on his cells. That is quite simple, and the relevant Financial Commission has already approved the sponsor or issuer.
Is There a Limit to It? It is all very new, and perhaps some people think that the protected cell is going to solve every single problem. Sometimes we wonder what they think it is going to achieve, but it is here to stay. We cannot see a limit to it, but my own personal private message is: do not be over-aggressive about this.
It is reassuring to find that it is actually the offshore world that has solved a particular business and financial problem of the onshore world. If it were not for the problem, one would not have the offshore solution to it. The offshore world adds on to it and improves it, which it is rather reassuring in the days of onslaught against the offshore world. It is a good thing. The protected cell is a puzzling idea, but also challenging to the innovative thinker.
UK Company with Bearer Shares
Seychelles: Protected Cell Company
£ 1450.00
Protected Cell Company registration in the Seychelles takes approximately 10 to 20 working days. The Seychelles PCC incorporation fee includes:
Seychelles PCC name availability confirmation and reservation
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