Seychelles Digital Nomad Visa

Local tax regime and what it means for you

Seychelles runs a territorial tax system, and for this digital nomad visa the regime is effectively foreign‑income‑exempt. The VISA FACTS classify the tax regime type as territorial and the local income tax on foreign earnings as 0, with Local Work Permitted set to No and the Local Income Limit at 0% of total income. In practice, that means salary from your US, Canadian, Australian, or EU employer, foreign contractor fees, dividends and interest from a brokerage abroad, and rental income from properties outside Seychelles are outside Seychelles’ income tax net as long as you do not shift the underlying activity into the local economy.

Because foreign‑source income is not taxed, capital gains on foreign investments—selling index funds or ETFs in a non‑Seychellois account—are also effectively exempt under the territorial rules while you are there, assuming the investment activity and custody remain offshore. If you were to start generating Seychellois‑source income (for example, consulting a local hotel group on site), that would fall into the domestic tax base and would require a different permit; under this visa, that scenario is explicitly prohibited by the 0% local‑income rule.

Tax residency in Seychelles is not fully defined in the VISA FACTS for this program: there is no disclosed physical presence threshold, no tax status deadline, and no explicit registration requirement attached to the digital nomad visa. Practically, many territorial systems use 183 days in‑country as a residency trigger, but Seychelles does not publish a special test for Workation‑style stays in the data you have, so you should assume that extended physical presence could put you on the authorities’ radar even if your income is foreign‑source and non‑taxable.

Local filing obligations for this visa category are not publicly specified. With a 0% rate on foreign income and a ban on local work, many digital nomads never interact with the Seychelles Revenue Commission at all, and the VISA FACTS do not mention a required tax ID, initial declaration, or annual return tied to the visa. However, if you inadvertently generate local‑source income or buy local income‑producing assets, you would need to register and file. There is no US–Seychelles income tax treaty (Tax Treaty with US: no), so there are no treaty tie‑breaker rules, reduced withholding rates, or Social Security totalization provisions to rely on; you avoid double taxation mainly by keeping your income foreign‑sourced and using US domestic relief mechanisms.

For US Citizens and Green Card Holders

For US persons, Seychelles’ territorial, 0‑tax treatment of foreign income simplifies the local side but does not change your IRS obligations. You remain taxable on worldwide income and must use the standard expat tools. The Foreign Earned Income Exclusion (FEIE) via Form 2555 can exclude up to 126,500 USD of earned income in 2024—remote salary, consulting, or self‑employment profits from your non‑US clients. It does not cover dividends, ETF capital gains, rental income, pension distributions, or Social Security. Given that this visa allows a 12‑month stay and does not impose a disclosed minimum presence, most nomads will rely on the Physical Presence Test (330 days outside the US in any 12‑month window) rather than the more demanding Bona Fide Residence Test.

Because Seychelles does not tax your foreign‑source income, the Foreign Tax Credit on Form 1116 usually does nothing for that income stream; there is no Seychelles tax to credit against US liability. FTC can still matter if you also work from or invest in third countries that do impose tax, but your Seychelles period itself is typically FEIE‑plus‑standard‑US‑tax for passive income. Do not expect an FTC to reduce US tax on your brokerage dividends or ETF sales tied to your Seychelles stay, because the local effective rate is zero.

FBAR (FinCEN 114) and FATCA Form 8938 still apply if you hold money abroad. A local bank account is not required for this visa, but if you open one or hold more than 10,000 USD in aggregate in non‑US accounts at any point in the year, you must file an FBAR. FATCA Form 8938 has higher thresholds but is separate and often concurrent. Non‑willful FBAR penalties start around 10,000 USD per unreported year, so even a modest Seychelles account or multi‑currency online bank linked to your stay can be enough to trigger reporting.

For this visa, the smartest setup is usually: use Form 2555 to shelter as much earned remote income as your 126,500 USD FEIE cap allows, accept that passive income remains fully taxable in the US, and keep clean documentation proving that all income is foreign‑source and non‑local. Engage two professionals in year one: a US CPA specialized in expat work to optimize FEIE vs. FTC and handle FBAR/FATCA, and a local Seychelles tax adviser for a one‑off consultation on residency and any future local investments. The 1,500–3,000 USD spent up front on that advice generally pays for itself through avoided penalties and better elections.