The International Financial Centre Profile
Contributed by A.C.T. Offshore Limited
13 October, 2010
Using a Seychelles entity a client can do almost anything they could do elsewhere for less cost and for less effort because regulations and procedures in Seychelles are straightforward and modern. International companies can be setup with the directors having extensive powers removing the need for frequent shareholder approval. Registrations and licencing are typically very fast and documents can quickly and easily be authenticated by notaries, the Supreme Court and by consulates and embassies.
Clients do not have to come to Seychelles to set up and administer their entities and bank accounts and there is no requirement to file annual returns and accounts for IBCs which means remaining in good standing with the Registrar usually involves the simple matter of paying the annual government fee. There is no requirement to have a corporate seal and this can further help to keep costs low. Other important advantages include good availability of names and the availability of ready-made or aged shelf companies.
Seychelles aims to give international clients the widest choice and room to maneuver once they are in the islands. Seychelless efforts to have more double taxation agreements (especially with African nations), the recent introduction of a Foundations Act, a Mutual Funds Act and a new Insurance Act clearly show its commitment to have a flexible regime. And Seychelles is also lucky to be in a good time zone to assist clients from Western Europe to the Far East during working hours.
Politically the islands are very stable, especially with all parties in favor of developing the financial services industry further. There are no great worries of sudden and drastic changes in the operating environment because of a cautiously compliant approach adopted by the regulators and Government in responding to global pressures. With the political establishment giving full support to international business it is relatively easy to introduce new and innovative legislation, to improve existing legislation and to have more double taxation agreements. Service providers are allowed a strong input in the direction that the jurisdiction takes.
Very important in assessing Seychelless attractiveness as a fiduciary centre is its main corporate vehicle, the International Business Comapny (IBC). At the beginning of April 2010 there were almost 74,000 IBCs on the register and over the last 4 or 5 years Seychelles has been one of the fastest growing IBC jurisdictions. Growth is being driven by increasing demand for IBCs in Asia and by restrictions introduced by other jurisdictions on their own IBCs. The company with special licence (CSL) is proving to be popular as well and over 200 have been formed since its introduction in 2004. Unlike the IBC it is a Seychelles tax resident and can therefore also benefit from Seychelless growing network of double taxation agreements.
Fiduciary service providers in Seychelles are generally small and professional-owner managed businesses aiming to offer a fast, cost effective and personal service. The providers are therefore well-suited to service small and medium sized projects.
A.C.T.- Offshore is based in Seychelles but has extensive and proven connections with fellow service providers in most other jurisdictions. It offers its clients a range of fiduciary services in Seychelles and refers gratuitously to other professionals in the other jurisdictions when appropriate. Work that the firm does involves formation and maintenance of Seychelles IBCs, trusts and CSLs, and it also registers yachts under the Seychelles flag if owned by Seychelles IBCs. A.C.T. Offshore maintains the most extensive list of ready-made companies in Seychelles.
Karl Pragassen, a director of A.C.T.- Offshore, said: As registered agent of the IBCs, secretary to the CSLs and as trustees we have a duty to our clients to ensure that their entities comply with Seychelles requirements as well as to ensure that general recommended practices are followed. We are the liaison for clients to the Registry, notaries, auditors, banks and consulates and embassies in Seychelles and we keep clients informed of any changes in laws and regulations and other relevant conditions in Seychelles.
Mr Pragassen noted that Seychelles presence on an OECD White List had a positive effect on the fiduciary services in the islands.
While getting on the white list has not been easy and staying there will not be easy either, overall, the challenge is helping our business. The higher requirements are helping to weed out the speculators and the casual service providers who compete on price alone instead of quality. The survivors are only getting better, he said.
Seychelles is now highly regulated and therefore regulation has widespread effect on the fiduciary business. The bar is already quite high for service providers and it is expected that it will be raised even higher in the coming years. Mr Pragassen is believes it will bring new challenges for fiduciary services providers.
He said: It means higher costs for service providers but also it means we have to continuously improve systems and procedures. We will have to provide a highly efficient service to be viable as a business. Fortunately, the idea of complete regulation but with a light touch persists and the regulators understand and respect the need for confidentiality and flexibility in international business. The end result is that while service providers have to improve continuously to meet higher standards, the clients will see only benefits.
Seychelles is a rising star in the world of fiduciary centres. Its biggest challenge will be to remain compliant with emerging international requirements in order to remain on the white lists, while at the same time remaining competitive as a jurisdiction. Mr Pragassen said this situation also presents Seychelles many opportunities.
This could also afford us with opportunities where caution combined with our ability to adapt quickly may present us with further advantages over other similar jurisdictions who may react to international pressures too quickly, he said.
Improving connectivity will bring unforeseen opportunities.
We are looking forward to the fibre optic link is promised for 2011, added Mr Pragassen.
Seychelles has good relationships with many countries but it is currently especially working on improving its business ties with African nations. The hope is that Seychelles can be used as a base by Asian businesses looking to invest in Africa. Seychelles also happens to have a good relationship with China and China has one of its largest embassies in Seychelles.
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