Seychelles: Seychelles As An Offshore Financial Centre - The Why Not? Choice

Of the many Island states providing the services of offshore financial centres, why choose Seychelles as your centre? The answer is simply why not? The main island of Mahe is situated some five degrees south of the equator and approximately 1,800km from the east coast of Africa. The spoken and written languages are English, French and Creole (a French based patois).

The Island's legal infrastructure is based on the English and French jurisprudence and due to its very recent entry into the world of offshore financial centres, the various legislations dealing with the latter are modern and simple.

International Business Companies Act

Under the International Business Companies Act 1994, an international business company (IBC) may have as its sole object that of engaging in any trade, business or activity that is not prohibited under any law for the time being in force in Seychelles except that "it shall not carry on any banking, insurance, reinsurance or trust business".

Salient Features

Minimun Number of Shareholders: 1
Minimum Number of Directors: 1
Minimum Share Capital: US$1
Bearer Shares: Yes
Filing of Accounts: Not necessary
Taxation: None
Resident Agent in Seychelles: Compulsory
Directors/Shareholders: Not necessarily residents
Meetings in Seychelles: Not compulsory

An international trust may be created either by oral declaration, in writing or by will or codicil.

1. The settlor may not at any time during the duration of the trust be a resident of Seychelles.
2. At least one trustee must at all times be resident in Seychelles.
3. Unless the trust deed contains an express power to do so it shall be irrevocable by the settlor.
4. The trust may not be invalidated by any foreign rule of "forced heirship".
5. The settlor may choose under which law the trust shall operate.
6. The settlor or trustees can be named as beneficiaries under the trust.
7. Disclosure of any information or document relating to the trust is strictly prohibited by law except under an injunction of the Seychelles Supreme Court on application made by the Seychelles Attorney General and then only for the purpose of an enquiry or trial into or relating to the trafficking of narcotics, dangerous drugs, arms trafficking or money laundering.
8. An international trust is not subject to any income taxes, stamp duty or capital gains taxes in Seychelles.

This Act provides for business licencing geared towards the export market be they in the manufacturing, assembling, redistribution or service industries. Licences are renewable on a yearly basis.

An application for a licence under the Act must be submitted to the Seychelles International Business Authority.

A business licenced to operate in an international trade zone is exempt from:

1. Business Tax Act.
2. Trade tax (customs duty) on capital equipment to be used in the business in the international trade zone area.
3. Social Security Act (employer's contribution).
4. Payment of gainfull occupation permits in respect of non-Seychellois employees.

With the permission of the Ministry of Finance a licenced operator may "export" a portion of his products/service to a zone in Seychelles not forming part of an international trade zone.

The Financial Institution Act (non-domestic banking business) Regulations 1996

Any financial institution wishing to operate non-domestic banking business in Seychelles must apply for a licence to operate as such from the Central Bank of Seychelles.

A financial institution exclusively conducting non-domestic banking business may authorise a person to open a "numbered account" with the institution.

The annual licence fee payable to Central Bank of Seychelles is US$15,000 or its equivalent in any other freely convertible currency.

All licenced non-domestic banks are exempted from paying taxes and duties leviable in Seychelles for a period of 20 years from the grant of the licence. However, under certain circumstances, the non-domestic banks may elect to pay business tax in Seychelles on its taxable income as computed under that Act.

This law makes provision for the registration of ships and yachts in Seychelles. It also provides for the consular and diplomatic representatives of Seychelles abroad to issue provisional certificates of registration to vessels satisfying the ownership and registration criteria.

Apart from registration as a "Seychelles Ship" the law makes provision for bareboat charterer to apply for parallel registration of a foreign ship in the Seychelles register.

The Civil Aviation Act (as amended in 1996) provides the framework for the registration of mortgages on aircrafts. As with the ship's registration, consular and diplomatic representatives of Seychelles abroad can issue a provisional certification of registration.