Republic of Seychelles is a group of islands located in the Indian Ocean, north-east of Madagascar. The archipelago consists of 115 islands and occupies the territory of approximately 455 square km. The total population is estimated at 80,098 (July 2002 est.), descended primarily from French settlers, Africans, British sailors and traders from India, China and the Middle East. Victoria, the capital and the only commercial port of the Seychelles is situated on the largest island of Mahe. The official languages of the Seychelles are Creole (first), English (second), French (third). English is the main language of business. The most of the population are Roman Catholics (90 percent), 8 percent are Anglicans, and 2 percent practise other religions. The literacy factor is 58% (total population).
Discovery of the Islands is credited to the Portuguese explorer Vasco de Gama (1460 - 1524). In 1756 a “Stone of Possession” was placed on Mahe officially marking the island group as a French territory. Subsequently, the group was called Seychelles after Vocimte Moreau des Sechelles “Controlleur General” of Finance in the French government of Louis XVI. The first French settlement was established on St. Anne Island in 1770. In 1814 the Seychelles, along with Mauritius, were ceded to Great Britain under the terms of the Treaty of Paris. It was only in 1960 that the first gradual constitutional reforms were introduced. Political independence from Britain was achieved in 1976 and a republican form of government was adopted. Currently the Seychelles is an independent republic within the British Commonwealth.
Both the State and the Government of the Seychelles are headed by an elected President together with a cabinet of ministers. Ministers are appointed by the President. The legislative authority vests in the unicameral National Assembly (34 seats - 25 elected by popular vote, 9 allocated on a proportional basis to parties winning at least ten percent of the vote; members serve five-year terms). The judicial branch consists of the Supreme Court and the Court of Appeal.
The economy of the Seychelles is based primarily on tourism which accounts for 50 percent of GDP. Traditional export includes: canned and frozen fish, copra and cinnamon bark, but the market for crops, copra and cinnamon has decreased recently. Industry is very limited mainly because of the lack of raw materials. Seychelles imports manufactured goods, food, petroleum products, transportation equipment and machinery.
Now a significant element of the economy is the rapidly expanding financial sector, linked to the progressive laws facilitating the establishment of offshore structures and encouraging inward investment. The Seychelles is a member of Commonwealth of Nations; Organization of African Unity and Nonaligned Movement. The currency of Seychelles is Seychelles rupee (SRe), the exchange rate of which is as follows: US$1 = Sre5.8.
Legal system of Seychelles is based on English common law and French civil law (civil Law is based on the French Napoleonic Code, criminal law is based on English laws). Principal corporate legalisation is the International Business Companies Act 1994.
The type of company for international trade and investment is International Business Company (IBC), incorporated under the International Business Companies Act 1994. IBCs can be used for financial management, investment holding, ship or property ownership, share ownership of other companies, leasing of assets, licensing as well as general commercial trading and any lawful business in any country.
There are very few restrictions on the activities of an IBC. At present, an IBC may not: carry on business in Seychelles; own an interest in immovable property situated in Seychelles, or a lease of immovable property in Seychelles; carry on banking (as defined in the Financial Institution Act, 1984) or trust business; carry on business as an insurance or reinsurance company; or carry on business of providing the registered office for companies.
All IBCs must maintain a Registered Agent and a Registered Office in the Seychelles. Seychelles IBCs enjoy full exemption from all forms of local taxation including stamp duty.
To incorporate an IBC, a Memorandum of Association must be signed by one or more natural or juridical persons, acting as Subscribers, and submitted for filing to the Registry. The Articles of Association can be filed either at the same time or within 30 days of incorporation.
The name of an IBC can be in any language, but must be in Latin alphabet and must be accompanied by a translation in English or French. The following suffixes may be used to denote limited liability: Limited, Corporation, Incorporated, Society Anonyme, Sociedad Anonima or Aktiengesellschaft; or their usual abbreviations: Ltd., Corp., Inc., S.A., A.S. or AG.
The following words cannot be used in the names of IBCs: Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Co-operative, Foundation, Government, Imperial, Insurance, Municipal and Trust, or any other words suggesting the patronage of any Government or authority. The name cannot be identical or similar to any existing company name.
In Seychelles there is no minimum or maximum capital requirements. Normally IBCs are incorporated with an authorised share capital of US$ 5,000 divided into 5,000 share of US$1.00 each. This being the maximum capital for the minimum licence fees. The authorised share capital may be expressed in any currency. IBC can issue registered or bearer shares (not recommended), preference shares, redeemable shares, shares with or without par value and shares with or without voting rights. The minimum issued capital is either one share of no par value or one share of par value.
Registration fees paid to the Seychelles government under the International Business Companies Act are as follows:
- For the authorised capital of up to US$ 5,000 the licence fee is US$ 100.
- if the authorised capital does not exceed US$ 50,000 and all the shares have a par value, the licence fee is US$ 300.
- If the authorised capital is over US$ 50,000, the licence fee is US$ 1,000.
- if the authorised capital does not exceed US$ 50,000 and some or all of its shares have no par value, the licence fee is US$ 350.
Only one shareholder is required for a Seychelles IBC. Shareholders may be individuals or bodies corporate of any nationality and residency. Shareholders may hold their meetings in any country and they may attend such meetings by proxy. Details of shareholders do not appear on the public file, although a register of shareholders must be maintained by the company.
The minimum number of directors is one, who may be a natural person or a body corporate of any nationality. The first directors are appointed by the Subscribers to the Memorandum and Articles of Association. Neither directors nor officers of an IBC need be shareholders of the company. There is no requirement to register initial or ongoing changes in directors and/or officers with the Registrar of companies. No details of directors appear on the public file, although a register of directors must be maintained by the company.
The management of an International Business Company is conducted by the Board of Directors, which can grant a general power of attorney to any third party, without registering the same, in order to act on behalf of the Company. Meetings of directors may be held in any country, at any time, and directors may attend meetings by proxy.
A Seychelles IBC need not appoint a company secretary, although it is customary to do so. The secretary may be a natural person or body corporate of any nationality and need not be resident in the Seychelles.
A Seychelles IBC is not required to file any statutory accounting or audit records or reports in the Seychelles, but all companies must keep records to reflect their financial position. There is no requirement to hold annual general meetings of shareholders or directors.
However when making annual payments for an IBC, it is mandatory to provide a copy of the company director’s passport together with a copy of the Resolution of Subscriber appointing this director (these papers are kept with the registered agent and are not available to public). This requirement is stipulated by the legislation and most of the registered agents in the Seychelles follow this practice.
Any company the name of which is on the Register on 31st December in any year shall before the date of the relevant anniversary of its incorporation in the immediately following year pay to the Registrar an annual licence fee as follows:
- USD 100.00 if its authorised capital does not exceed USD 5,000.00;
- USD 300.00 if its authorized capital does not exceed USD 50,000.00 and its shares have a par value;
- USD 1,000.00 if its authorised capital exceeds USD 50,000.00; and
- USD 350.00 if its autorised capital does not exceed USD 50,000.00 and some or all of its shares have no par value.
If a company fails to pay the amount due as the licence fee by the specified date, the licence fee increases by 10 per cent of that amount. If a company fails to pay the amount due as an increased licence fee 90 days after the date when it becomes due, then the licence fee increases by 50 per cent of the licence fee. The Registry shall strike off the name of a Company if the annual fees have not been paid by the 31st of December.
To dissolve an IBC it is necessary to issue a Resolution of Dissolution signed by the director(s) of the company. The procedure of dissolution will take from 1,5 to 2 months provided that the company does not have any assets which must be attributed to the shareholders, and no debt obligations or other liabilities. Thus if an IBC does not have any assets or liabilities, it will have to submit:
1. Bank statements
2. Declaration signed by the directors of the company and confirming that the company does not have any assets or liabilities
3. Resolution of Dissolution signed by the director(s) of the company.
In the case when the company had business transactions and maintained financial records, it will have to provide financial statements, returns, and other documents confirming the financial position of the company at the time of dissolution.
The above documents must be sent to the Registered Agent, who will prepare Articles of Dissolution, publish a note in a local newspaper and then register the winding up with the authorities. After that the Registrar will issue a Certificate of Dissolution.
If an IBC has been struck off the Registrar of companies, it can be restored by paying the following applicable fee plus all the license fees due by the date of restoration:
(i) $300.00 if application for restoration is made within 6 months immediately following the company being struck off the Register;
(ii) $600.00 if application for restoration is made after 6 months immediately following the company being struck off the Register.
Upon request the Registrar can issue a Certificate of Good Standing for any existing IBC and such certificate will confirm that the company does legally exist.
In February 2001 the Government of the Republic of Seychelles reached an arrangement with the OECD and issued a letter committing itself to the principles of transparency and effective exchange of information in tax matters. In particular the Seychelles committed to the following:
- by 31 December 2002 the Republic of Seychelles ensures that its regulatory or tax authorities have access to information regarding beneficial owners of companies and other entities organised in its jurisdiction.
- By 31 December 2003 the Republic of Seychelles will allow information to be provided to the tax authorities of the OECD countries upon request for investigation and prosecution of criminal tax matters. The information eligible for exchange will include bank and financial information as well as information on beneficial ownership.
The registration of ships in the Seychelles is governed by the Merchant Shipping Act 1992, which provides that the property in a ship be divided into 64 shares and not more than 64 qualified persons be entitled to be registered at the same time as owners of a ship. A qualified person may be a person who is a citizen of Seychelles, or a body corporate incorporated under the Companies Act.
An application for registration must be lodged with the Registrar of Ships by the owners of a ship together with the following:
- Invoice for the vessel
- The Builder’s Certificate
- Declaration of Conformity
- Certificate of Conformity
- Bill of Sale
- Corporate Certificate
- Maritime Assurance Certificate
- ICCN Certificate (verification certificate issued by one of the following authorised societies: American Bureau of Shipping (ABS), USA, Bureau Veritas (BV), France, Nippon Kaiji Kyokai (NKK), Japan, Det Norseke Veritas (DNV), Norway. In case the vessel does not appear in the Seychelles this certificate is one of the most important documents required for the registration. If the ship is in the Seychelles, the verification can be conducted by the Seychelles authorities).
Seychelles-registered ships are exempt from business tax on their profits. Since there is no personal income tax in the Seychelles, personnel working on board a Seychelles ship do not pay any tax.