Seychelles Offshore Industry
It is in 1994 that the Seychelles really started to develop the offshore business. The government created different legislative initiatives in order to show the Seychelles as a modern and international offshore centre. The majority of the legislation was based on the one existing in the “older” jurisdictions such as Bahamas and the British Virgin Islands.
The legislation that was enacted in 1994 covers the registration of Seychelles offshore companies, offshore trusts and the licensing of international trade zone companies. Later on, other legislations were introduced with regards to the licensing of offshore banks and insurance companies. It is in 2003 that the government legislated for the types of company such as CSL and LP’s.
In order to deal with all matters related to the offshore business, the Seychelles International Business Authority (SIBA) was created in 1994. The SIBA is in charge of the administration of the offshore sector, the offshore company incorporation and the supervision of the SITZ.
In the beginning of 2005, we could count more than 17’000 Seychelles IBC’s. In 2008 there were more than 50’000 Seychelles companies which made the Seychelles one of the fastest growing centre in terms of offshore business.
Banking
It is the Financial Institutions Act 1984 as amended in 1995 that legislated the banking industry in Seychelles. The Offshore Banking Department of the Central Bank is in charge of issuing the Licenses which will only be issued to companies incorporated under the Companies Act 1972 or foreign companies registered under the Companies Act. There are different types of Licenses such as the ones for domestic banking, offshore banking, or both.
In order to apply for a license, there are much information which needs to be provided to the Central Bank together with copies of the last three balance sheets and a business plan. There are different prudential requirements and the Bank will need to have monthly balance sheet submissions.
The price of a license is USD15,000, payable to the Central Bank. Today, there are six licensed commercial banks in the Seychelles, together with a credit union and two money changers. Of the commercial banks, two are state owned, two are branches of foreign banks and two are locally incorporated subsidiaries. All the banks have a license which allows them to conduct domestic banking but only two of them have the license to have offshore banking activities.
The banking industry is very important in Seychelles and represents an important part of the offshore business together with the incorporation of Seychelles offshore companies. There are other types of offshore businesses such as the offshore insurances companies, legislated by the Insurance Act 1994 which is modeled on the Insurance Act of Singapore 1995.
Another element of the offshore business in Seychelles is the Investment Fund Management. Indeed, legislation was put in place for this matter in 1997. The regulations from this Act offered a modern system in order to attract worldwide international mutual funds promoters.
The last but not the least sector of the offshore business in Seychelles is the Ship Management and Maritime Operations. In Seychelles, this industry is governed by the Merchant Shipping Act 1992. One has the possibility to register ships and yachts under the terms of this Act
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The ownership of a Seychelles registered vessel or ship management operation is closely linked to a Seychelles IBC which remains the most efficient vehicle for this type of operation. Indeed, such a Seychelles company will not be liable for tax on profits and dividends. The vessels registered in Seychelles can be sold or transferred free of tax, and so can the Seychelles offshore company.
Seychelles Double Tax Agreements
Based on the Seychelles International Business Authority, the Seychelles have Double Tax Agreements in force with the following countries: China, Oman, South Africa, Indonesia, Malaysia, Botswana, Thailand, Mauritius, Vietnam, Cyprus, Barbados and the United Arab Emirates.
Double Tax Agreements with the following countries have been signed, but as of 2008 were not ratified: Belgium, Qatar and Zimbabwe.
There are many countries which are in discussions on tax treaties with Seychelles such as Tunisia, Malta, India and the Czech Republic. Other countries Russia and Egypt have concluded the negotiations.
These treaties are important for the development of the national economy. Indeed, the government is actively trying to expand its network in terms of tax treaty.
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