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Seychelles: Offshore Business Sectors

Introduction

Offshore business in Seychelles began its development in 1994 when the Government launched a series of legislative initiatives aimed at establishing the country as a thoroughly modern, world-class international offshore financial centre. Much of the legislation was based on that of successful jurisdictions such as the British Virgin Islands and the Bahamas.

In 1994 legislation was enacted covering the registration of offshore companies, offshore trusts and the licensing of international trade zone companies. Additional legislation was introduced covering the licensing of offshore banks, offshore insurance companies and the establishment of a securities industry; and in 2003, the government legislated for additional types of company: Special Licence Companies, Protected Cell Companies and Limited Partnerships.

The Seychelles International Business Authority (SIBA) was set up by the Seychelles International Business Authority Act 1994 to administer the offshore sector and deals with the registration of offshore companies as well as supervision of the Seychelles International Trade Zone (SITZ).

In May, 2003, the government said it wanted the offshore sector to become a 'third pillar' of the economy, revealing that SIBA's efforts had led to a 40% increase in offshore incorporations.

By 2008 the number of IBCs on the register had surpassed 50,000, making the Seychelles one of the fastest growing offshore centres in the world. An Interactive Gambling Bill was also passed in 2003, which incorporates this aspect of the gaming industry into existing law.

The International Corporate Service Providers Act, 2003, substantially improved and simplified the regime for incoming investment. Previously, the Seychelles International Business Authority (SIBA) had power to issue a licence to offshore businesses, but entitlement to fiscal concessions depended on obtaining a certificate from the Ministry of Finance under the Investment Promotion Act.

The new Act streamlined the procedure for establishing an offshore business, avoiding the need for a separate IPA application to the Finance Ministry. See Offshore Legal and Tax Regimes for further details of the new legislation.

In July, 2004, it was announced that the promotion of the Seychelles investment sector was to become the responsibility of a new body, the Seychelles Investment Bureau (SIB), which was to take on the task from a number of other government offices. Chief executive officer of the SIB, Joseph Nourrice, explained that the bureau would act as a one stop shop for the investment community and coordinate all promotion activities. "The amount of procedures will be reduced tremendously," he observed.

Previously, the Investment Desk at the Ministry of Finance had played a large part in the jurisdiction's promotional activities, and the SIB assumed the promotional role previously taken on by the Seychelles International Business Authority, which now concentrates on regulation.

An immediate priority for the SIB was the drafting of an investment code for the Seychelles, which according to Mr Nourrice "will act as the backbone for our marketing tools".

In August, 2005, SIBA said that the Seychelles' offshore financial industry intended to boost the industry's annual turnover to USD300 million per year over ten to fifteen years, transforming the offshore financial services sector into the largest pillar of the Seychelles' economy.

Speaking to the Seychelles Nation, Ahmed Afif, managing director of the Seychelles International Business Authority (SIBA) envisaged a doubling in the number of offshore services providers, an increase in the number of licensed offshore banks from one to five, the establishment of a business park and significant growth in the 150-strong workforce currently employed by the offshore sector.

In March 2007, President James Michel announced in his annual State of the Nation address that the government was looking to expand the offshore sector with the addition of new products, including mutual funds, special license companies, a stock exchange and new products and services in the insurance sector, some of which have already been incorporated into legislation.

Towards the end of 2010, SIBA began its move towards the creation of a dedicated securities authority, to be known as the Securities and Financial Markets Section (SAFMS) of SIBA. The SAFMS will establish regulations, rules and guidelines in respect of the legislation covering the financial markets, products and businesses. It will also license and supervise the operation of the financial centre and regulate the activities, standards and performance of the participants to ensure compliance with legislation, regulations, rules and guidelines. The SAFMS will also enforce the regulations, rules and guidelines as necessary. The SAFMS expects to play a key role in the development of a respected and successful financial centre in the Seychelles.

This section of the Lowtax site describes the most important types of offshore business activity carried out from the Seychelles.

 

 

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