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DOING BUSINESS IN THE SEYCHELLES

DOING BUSINESS IN THE SEYCHELLES

October 2012 

ABOUT SEYCHELLES

The Seychelles is located in the heart of the Indian Ocean, positioned between 4 and 7 degrees south of the equator. Seychelles is an archipelago comprising of 115 islands .The main island, Mahe, holds the country ‘s capital which is Victoria, named after the late Queen Victoria 2,of the British Monarchy. The two main pillars of the Seychelles Economy are tourism and fishery. However the last two years, off shoring investments has seen to contribute greatly in the country’s economy.

Seychelles is known worldwide for its palm-fringed white sanded beaches, beautiful tropical flora and lushly vegetated mountains. The islands are safely outside the region’s cyclone belt, which is a definite plus for tourists. The enticing combination of year round blue skies, unspoilt clean beaches and a hospitable, smiling population has given the country a reputation as one of the world’s most sought after tourist destinations.

The Seychelles boasts great natural beauty and rare endemic faunas and floras, immensely appreciated around the world. Many visitors flocked the islands to experience at first hand this natural and exotic beauty. The ethnicity varies from European, African and Asian culture which was founded due to the colonial affiliation of Seychelles back in the 1800 by both British and French Monarchy. The population descended from these cultures and it reflects today in the culinary as well as skin orientation. The Seychellois people are also known for their warmth and welcoming nature. The most spoken languages are Creole, the native tongue, English and French, as secondary languages.

Over the last few years Seychelles has become an attractive destination for foreign investors and business ventures. The result has been dramatic increase in International Corporation, investments, exchange of information and more transparency in legal framework of Seychelles. Communication has improved drastically with the recent connection of Seychelles to the fiber optic cable to Eastern African Coast, which provides fast paced internet. This enables more efficient business communication financial transaction for banks and other financial regulators.

The Seychelles has many investment structures in place to facilitate the processes of business ventures. The Seychelles Investment Bureau provides a vital bridge between investors and government facilitating the presentation of new business opportunities. The Seychelles International Business Authority is the regulatory body which offers investors wide range of investment opportunities in International Business Companies, Trusts, Foundation and many others. The Central Bank of Seychelles ensures financial securities of all investment by implementing legal framework, licensing
and supervision of banks, insurance companies, trusts to allow as much transparency in financial transactions.

The Seychelles has both political and economical stability operates a business friendly environment and cost efficient. It is a well regulated jurisdiction according to the last Peer Review by the Global Forum in May 2012.The Seychelles has now a solid legal and regulatory framework for the exchange of information of the jurisdiction (Offsite Review). The reputation of Seychelles has extended across the world and many developing markets have realize the advantages of having investments in Seychelles.

MAIN FEATURES OF THE SEYCHELLES JURISDICTION

The jurisdiction has many appealing features:
• Stable and independent as a country
• Fast incorporation, usually within 24 hours
• Low incorporation and renewal fees
• Convenient time zone (+4 hrs GMT)
• Modern offshore legislation modelled on BVI – confidentiality guaranteed by law
• Multi-lingual incorporation documents allowed (Chinese characteristics accepted)
• Secure offshore banking (Barclays/BMI Offshore)
• Lower taxes for IBCs than any other jurisdictions
• Nominee shareholder and directors permitted
• Corporate nominees permitted (including those from other jurisdictions)
• 1 shareholder, 1 director; minimum requirement
• No public disclose of Beneficial owner, Shareholder or Director
• No public register of shareholders or Directors
• Bearer shares allowed. We, as registered agents, are required to have on file (not for public or official records) the details of the custodian (holder) of the bearer share certificate(s)
• No minimum share capital requirement
• Annual company returns are not made public
• Financial accounts are not made public
• No annual meeting requirements
• Double Taxation Avoidance Treaties in force with China, South Africa, Indonesia, Oman, Botswana, Mauritius, Thailand, Malaysia, Vietnam, Belgium, Barbados, Qatar, Bahrain, Cyprus, U.A.E and Zambia. Treaties with various other countries such as Luxembourg, Portugal and Monaco are in the final stages of negotiation.

Seychelles also has a wide range of offshore products available, namely:

• Seychelles International Business Company (IBC) – no tax offshore company (the jurisdiction’s most popular product)
• Seychelles Special License Company (CSL) – low tax (1.5%) domestic company with special license
• Seychelles Limited Partnerships (LP)
• Seychelles Protected Cell Company (PCC)
• Seychelles International Trust
• Seychelles Foundation
• Seychelles Mutual and Hedge Funds
• Seychelles International Trade Zone (SITZ) – companies licensed to operate within the Seychelles Freeport

SEYCHELLES AS AN OFFSHORE JURISDICTION

Building upon a collaborative, mutually beneficial working relationship between the government, regulator and service providers, Seychelles’ offshore industry has placed the maintenance of its OECD-compliant reputation at the forefront of its work. While geographically, politically and economically free from the undue influence of the EU and US regulatory systems, Seychelles’ financial services industry nonetheless demands and maintains respect for the highest standards
in business practice to guarantee the reputations of the jurisdiction, its service providers and their clients.

Seychelles is emerging as a jurisdiction of choice with over 12,000 companies registered in 2009 and more than 70,000 companies registered to date. It is taking giant steps towards being an International Financial Centre in the Indian Ocean Region by offering a wide array of products such as International Business Company (IBC), Special License Company (CSL), Protected Cell Company (PCC), Domestic Company, Trusts, Foundations, Mutual Funds, Offshore Banks and
services such as Legal, Accounting & Auditing.

Seychelles has established well-formed legislation for International Business Companies, Offshore Banks, Insurance Companies, Mutual Funds, Trusts, Foundations and extensive programs of investment incentives as well as the International Trade Zone. Seychelles has a territorial taxation system, therefore only locally – sourced income is taxed.

Furthermore, Seychelles is an excellent investment base for investors between Europe and the Far East, being between these time zones, and has the benefit of a multi-lingual population with English and French as the two business languages.

The laws of Seychelles take a most comprehensive, modern and attractive approach to the establishment and operation of offshore companies, mutual funds, offshore banking, offshore insurance and Freeport activities.

In 2003 the government legislated for additional types of companies; Special License Companies, Protected Cell Companies and Limited Partnerships. In 2009 the Foundation Act also came into force allowing the Seychelles to add Foundations to its product offer. It is now easy to form corporations and privacy is reasonably assured. Seychelles signed a number of tax treaties which add an excellent instrument available in the jurisdiction for tax planning purposes.

SEYCHELLES LEGISLATION PERTAINING TO THE OFFSHORE INDUSTRY

All relevant legislation can be downloaded from the SIBA website:

http://www.siba.net/index.php?s=downloads

SEYCHELLES INTERNATIONAL BUSINESS COMPANY (IBC)

The International Business Company (IBC) is by far the most popular offshore investment vehicle available in Seychelles. The Seychelles IBC is a tax-free corporation designed for engagement into all forms of international business. Recent amendments to the Seychelles International Business Companies Act 1994, adopted the minimum requirements for account record-keeping. The records are kept and file at the registered agent office only and not made public thus guaranteeing comprehensive confidentiality.

The main features of the Seychelles IBC are:

• Only one director and one shareholder are required (corporate directors and shareholders are allowed
• Shareholders, directors and officers need not be resident in the Seychelles and there is no stipulation as to their nationality
• There is no minimum capital requirement. Shares may be registered and issued in any currency (however, are usually registered in USD)
• Accounts are not filed with the Registrar of Companies
• Shareholders and directors meetings need not be held in the Seychelles and can be held by telephone
• The Certificate of Incorporation and Memorandum and Articles of Association are the only documents to be held on the public record
• No pubic registers of Members or Directors. Disclosure of company information may only be made by the Registered Agent on presentation of a Court Order issued by the Seychelles Supreme Court.
• Competitive registrar license fees fixed for life

IBC status is granted subject to certain conditions:

• Must have a registered agent and registered office in Seychelles
• No business may be transacted with residents of the Seychelles
• No ownership interest in real property in the Seychelles is permitted

IBCs are permitted various activities within the Seychelles without compromising their offshore status under the Act; some of these include:

• Ownership of a vessel (ship/yacht) registered in Seychelles
• Ownership of shares in other Seychelles companies, whether under the Act (offshore) or the Companies Ordinance, 1972 (domestic)

The above facts are given as general information only and any further details may be obtained by contacting us directly.

OPENING OF BANK ACCOUNTS

A natural choice for a Seychelles IBC would be to bank with a first-rate well renowned international bank, also located in the Seychelles.

Interconsult has a very good working relationship with Barclays Bank (Seychelles) – a branch of the international banking group of Barclays. Barclays Bank in Seychelles has a dedicated offshore banking department, specialising in international banking services and accounts for offshore companies. A state-of-the-art internet banking facility is also available to international customers.

More information about Barclays Bank Seychelles can be found on their following website:

http://www.barclays.com/africa/seychelles/barclays

SHIP/YACHT REGISTRATION

The Merchant Shipping Act 1992 governs the shipping industry in the Seychelles. Ships and yachts may be registered in the Seychelles under the terms of the Act. The Seychelles offers an attractive “offshore” regime for the ownership and registration of yachts. A Seychelles citizen or company (IBC or domestic) must own a yacht in order for it to fly the Seychelles flag. An IBC is the most effective vehicle for offshore ownership of a Seychelles-registered vessel or ship
management operation.

Such a company will be exempt from Seychelles taxation on profits and dividends. Sale and transfer of Seychelles-registered vessels or the companies owning them are also free of tax, as are the salaries of officers and crew of Seychelles-registered vessels operating internationally.

Seychelles is a member of the United Nations, the Commonwealth, the group of non-aligned countries, the Indian Ocean Commission and the International Maritime Organisation, and vessels flying the Seychelles flag benefit from friendly treatment worldwide.

Classification

The Seychelles presently recognises the following classification societies:

• Lloyd’s Register of Shipping (UK)
• Bureau Veritas (France)
• Nippon Kaiji Ryokai (Japan)
• Net Norske Veritas (Norway)
• America Bureau of Shipping (USA)
• Germanischer Lloyd (Germany)

Provisional Registration

The following particulars will need to be presented for the provisional registration of a yacht:

• A certificate signed by the builder containing various technical details relating to the yacht, such as the description of the ship, estimated tonnage, date and place of construction, name of the person (if any) on whose account the ship was built
• Where the yacht has been registered under the law of a foreign country, evidence that registration in that county has ceased (Certificate of Deletion). It is possible to obtain a Provisional Registration pending receipt of the deletion certificate
• Evidence that the applicant is the owner of the ship
• A declaration of ownership (Form RS02)
• A list of not less than three alternative names under which the ship is proposed to be registered
• A radio license

Permanent Registration

After a period of 90 days, the yacht may be permanently registered. The yacht owner will need to submit further documentation:

• An application for permanent registration
• A bill of sale
• Statutory certificates
• A carving and marking note, which is issued by the Registrar of Shipping.

Forms required for provisional registration of the yacht

1. Application for Registration of Ship as Seychelles Ship
2. Declaration of Ownership
3. Application for a Telecommunications/Radio License
4. Application for Activation of Maritime Mobile Earth Station

Fees payable to Government

1. Application for Registration
2. Radio License
3. Annual Tonnage Fee
4. Annual Radio License Fee

NOTE
It is recommended that a Seychelles IBC be used. The IBC will need to be kept in good standing (i.e. annual renewal fees paid) in order for the yacht registration to remain valid.

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