Seychelles: Offshore Business Sectors
Non-domestic banking in Seychelles is regulated by the Central Bank of Seychelles and is administered under the Financial Institutions Act 2004 (amended in 2008, 2009 and 2011) to cater for the offshore as well as the domestic banking. The Act makes provision for the licensing of offshore banks and incorporates the necessary flexibility to encourage growth in that sector. It also features full confidentiality with regards to information of its clients with the exception of criminal investigation cases. The following information details the Financial Institutions Act 1984 as amended in 1995, which was updated and replaced by the 2004 Act, retaining many of the 1984 Act's provisions.
Licences are issued by the Offshore Banking Department of the Central Bank and are granted only to companies incorporated under the Companies Act 1972 or foreign companies which have registered under the Companies Act. Licenses are issued for domestic banking, offshore banking, or both. When both are conducted, it must be through separate offices. Offshore banks are permitted to operate numbered accounts for their clients.
Applicants must supply extensive information to the Central Bank, including copies of the last three balance sheets and a business plan. The Bank imposes various prudential requirements and requires monthly balance sheet submissions. See Law of Offshore for further details of the licensing and supervisory regimes.
The licence fee is USD2,000, payable to the Central Bank in any convertible currency. The annual fee is between SR250,000 and SR1m, depending on the value of total assets. At the time of writing, there are seven licensed commercial banks in the Seychelles, together with a credit union and eight money changers. Of the commercial banks, two are state owned, three are branches of foreign banks and two are locally incorporated subsidiaries. Whilst all the banks hold licences to conduct domestic banking, only two have been granted licenses to carry out offshore banking activities.
All licensed offshore (non-domestic) banks are exempted from Seychelles taxes and duties for a 20 year period from the date the licence was granted, although a non-domestic bank may elect to pay business tax in Seychelles on its taxable income as agreed with the Commissioner of Taxes.
In December, 2004, the National Assembly passed the Central Bank of Seychelles Act 2004. The Act makes provision for the Central Bank to operate more as an independent institution. The government said that the enactment of the Bill would allow the Central Bank to operate without government interference and will be more efficient in ensuring accountability and transparency in the supervision of the monetary system and its quest to safeguard price stability through measures of control and fiscal policies.
The Anti-Money Laundering Act 2006 established a Financial Intelligence Unit (FIU) as a unit of the Central Bank, bringing the Seychelles' anti-money laundering regime more into line with international practices.
The FIU has the authority to request information considered relevant to an offence under the Act, and from reporting entities, supervisory agencies and law enforcement agencies. The FIU may enter into agreements with foreign states to facilitate the exchange of information to assist investigations into suspected cases of money laundering and terror financing.
The Anti-Money Laundering Act requires reporting entities to take "reasonable measures" to ascertain the purpose of any transaction in excess of SR100,000, or of SR50,000 in the case of cash transactions, and the origin and ultimate destination of the funds involved in the transactions.