The Country

The Republic of Seychelles consists of 155 islands, with a main island called Mahé. The Republic is located in the Indian Ocean, near Africa. A British colony since 1814, the country became independent in 1976 but remains a member of the Commonwealth. The main economic strengths of the Seychelles are tuna fishing and widespread tourism.

An offshore centre

The Seychelles are a reputed offshore destination, although it remains a somewhat difficult location in doing business with Europe. The Seychelles offer three types of offshore companies: the IBC, the CSL and the LP. Offshore activity is encouraged by the Seychelles International Business Authority which imposes national offshore standards.

The Seychelles have six commercial banks, as well as a credit agency and two exchange rate agencies. However, only two of these banks are suitable for offshore operations, as only they have the required license. Vessel registration is governed by the Merchant Shipping Act.

Offshore companies in the Seychelles must comply with the International Business Companies Act and Company Law. There are three possible types of offshore companies:

• International Business Company (IBC) is the most widely used offshore structure in the country, and takes the form of a company limited by shares. It has the advantage of not having any constraints as to the nationality of company directors, and as to the minimum capital required. However, the IBC cannot exercise a commercial activity in the Seychelles, nor possess property (property can only be leased, for example for office space). It is also forbidden to do business with other companies in the Seychelles, except in certain specific cases (lawyers, accountants, etc.). However, it is possible for the IBC to hold shares in Seychelles companies, or have a ship registered in the Seychelles. Costs for setting up an IBC are USD $100, for a maximum capital of USD $100,000. The licence renewal is also USD $100.
• Special License Companies (CSL) are governed by the Companies Act of 2003. This type of offshore company allows business activities both inside and outside of the Seychelles, and carries a number tax privileges.
• Seychelles Limited Partnership (LP) is governed by the Limited Partnership Act of 2003, and makes it possible to easily receive and distribute income.

Useful information

The Seychelles are recommended as an offshore location if working with Asia, India and Africa, but not if working with Europe. It is difficult to use the Seychelles to invoice a European company. In fact, the tax authorities apply a withholding tax of at least 30% when a German, French or Italian company makes a payment to the Seychelles. It is therefore possible that in event of an inspection, your clients could be penalized if they are located in Europe.

The various types of companies

It takes usually 5 days to create a company in the Seychelles, and many companies exist to facilitate the setup process in the country. The different types of companies are: the limited or unlimited company, the International Business Company, the Trust, the special license, the Limited Partnership company and the Foundation.

Different tax rates

Companies based in the Seychelles are not subject to any tax whatsoever. There is only a single annual tax of approximately 120 EUR, which is very low. There is no VAT and no income tax, as the country draws its wealth from tourism rights.

Link : Seychelles International Business Authority

Accounting Overview

It is not necessary to maintain or issue accounts in the Seychelles. However, companies are required to maintain all documents that would be necessary to prepare their accounts, for the duration of their operations. This regulation is established by section 65 of the IBC Act of 1994.

The jurisdiction in detail

After a year marked by an economic slowdown, and particularly a decline in foreign investment, the Seychelles should be able to ensure low, steady growth in 2013, thanks to its highly active tourism sector.

Fishing is the country’s most developed agricultural sector, especially tuna fishing. Victoria Harbour is the number one port for tuna transshipment in the Indian ocean. Tourism is the driving force of the Seychelles economy, with 70% of tourists coming from Europe. The country is also known as an offshore destination, and the role of the Seychelles International Business Authority is to regulate this activity.

The advantages of investing :

• good level of anonymity
• substantial tax benefits
• reputed offshore destination

Disadvantages :

• economy’s dependence on tourism
• narrow market

Access to and functioning of the market

As the country consists of several small islands, large distribution is virtually non-existent, and small shops dominate. However, there are a few supermarkets which were introduced by the Mahé and Casino groups.

Transporting goods in the Seychelles can require a number of different methods. The two main islands, Mahé and Praslin, have 400 kilometres of paved roads, which although well maintained, are winding and speed is limited to 80 km/h max. Several national airports connect the Islands, but travel in helicopters or ferries is also very common. Imports to the Seychelles are subject to high taxes, which make it possible to ensure part of the country’s revenue.

Employment law

Minimum wage in the Seychelles is about 205 EUR, while the cost of living is very high.

Political data

Executive power in the Seychelles is headed by the President (James Michel), who is elected for a five year term. The President appoints the Council of Ministers. The legislature consists of the National Assembly, whose 34 members are also elected for a five year term.

The three main political parties in the Seychelles are :

• Seychelles People’s Progressive Party
• Seychelles National Party
• Democratic Party