Jurisdiction of the month: Seychelles

2014 01 21 | Category: News

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Geography, Population, Languages
The Seychelles are a group of 115 small islands and coral reefs located in the Indian Ocean to the north of Madagascar. The total area of the islands is 451 sq. km. The largest island is Mahe (143 square km), which is also the site of the capital city, Victoria. The population of the Seychelles is about 84,000, descended primarily from French settlers, Africans, Creoles, British sailors and traders from India, China and the Middle East. The official languages are English and French. Creole is spoken widely, although English is the main language of business.

History, Political Structure and Law
The Portuguese explorer Vasco da Gama discovered the Seychelles in 1498. The first French settlement was established on St. Anne Island in August 1770, and two years later this was followed by a settlement on Mahe. In 1814 the Seychelles, along with Mauritius, were ceded to Great Britain under the terms of the Treaty of Paris (Seychelles was a colony of Britain).

It was only in 1960 that the first gradual constitutional reforms were introduced. The Seychelles were granted independence from Britain in 1976 and have continued to enjoy major economic, social and political development. Now the Seychelles are an independent presidential republic and part of the British Commonwealth.

In 1993 a new constitution was drafted and the government of the day implemented legislation designed to turn the country into an international business centre. Civil Law is based on the Napoleonic Code, while Corporate Legislation and Criminal Law are based on English Common Law.

Economy and Infrastructure
The Seychelles economy is based on tourism and fishing. Other contributions to the economy come from the export of coconuts (copra) and cinnamon.

The rapidly expanding financial sector is now a significant element of the economy. It is linked to the establishment of the Seychelles International Business Authority and a raft of progressive laws facilitating the establishment of offshore structures and encouraging inward investment. Take-up in the Free Trade Zone is promising.

The Seychelles have excellent airport facilities. Seychelles International Airport with its 3-km runway and modern passenger and cargo facilities is one of the finest in the Indian Ocean region.

The port at Victoria is well equipped with modern cargo-handling equipment, and has more than 6,000 square metres of covered storage space. In addition, up to six large ocean-going vessels can be accommodated in the outer harbour at any one time.

An ever-increasing number of international banks and insurance companies have established either branches or subsidiaries which, together with local management, accounting and legal firms, provide support for clients.

Cable and Wireless (Seychelles) Limited, part of Cable and Wireless PLC, London provides national and international telecommunications. The company has installed a special standard “A” Earth station in Victoria and standard “D” Earth stations on the other islands to give the Seychelles a state-of-the-art telecommunications network.

The Seychelles Rupee is the official currency. There is no exchange control.

Company Incorporation
The type of company used for international trade and investment is the International Business Company (IBC). The principal corporate legislation is the International Business Companies Act of 1994. This provides a comprehensive regime for the incorporation, regulation, operation, and taxation of IBCs. It is an extremely flexible piece of legislation. A Seychelles incorporated company has the same powers as a natural person. The language of legislation and corporate documentation is either English or French. If any other language is used, a translation in either English or French is required. There are no specific statutory provisions governing secrecy in relation to companies. However, English Law imposes a Common Law duty on professionals to keep the affairs of their clients confidential.

The following restrictions apply to trading and business activities:

• An IBC is not allowed to trade within the Seychelles or own real estate there.
• A company does not have the right to engage in the business of banking, insurance, assurance, reinsurance, fund management, asset management (other than of the company’s own assets) or any other activity that would suggest an association with the banking and insurance industries.
• A Seychelles IBC cannot provide registered office facilities in the Seychelles, or sell its shares to the public.

Incorporation procedure involves filing the Memorandum of Incorporation at the Registry. The Articles of Association can either be filed at the same time or within 30 days of incorporation. A registered office is required; this must be maintained in the Seychelles at the offices of a licensed management company. As a matter of local company law, the company must have a registered office address within the Seychelles and must also appoint a Seychelles resident as registered agent. Off-the-shelf companies are available.

Company names are subject to the following requirements and restrictions:

• A name can be in any language, but must be accompanied by a translation. Documentation must be in English, although it is possible to have bilingual documentation in both English and Chinese.
• Any name identical or similar to that of a company already incorporated is not acceptable.
• Anything that implies patronage by the Seychelles or any other government, words such as insurance, royal, imperial or any other name that may imply that a company intends to undertake a licensable or undesirable activity is not acceptable.
• Limited, Corporation, Incorporated, Societe Anonyme or abbreviations thereof must be used to denote limited liability. Other suffixes such as BV, GmbH, SARL may also be used.

The minimum number of directors is one. Directors may be either natural persons or bodies corporate. They may be of any nationality, and there is no requirement for them to be resident in the Seychelles. 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, may be of any nationality and be resident anywhere. The minimum number of shareholders is one, and shares can be issued in bearer or registered form. Details of shareholders and directors do not appear on the public file, although a Register of Members must be maintained. Meetings need not take place in the Seychelles.

Seychelles IBCs are normally incorporated with an authorised share capital of US$ 100,000 with par value, this being the maximum to qualify for the minimum license fee. The authorised share capital may be expressed in any currency. The minimum issued capital is either one share with no par value or one share with par value. The following classes of shares are permitted: registered shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights.

Due to the latest amendments to the Seychelles International Business Companies (IBC) Act 103, issuance of Bearer Shares is prohibited effective from 1st January 2014. Note that all newly formed companies, the standard M&AAs will allow only Registered Shares.

With regards to existing M&AAs, the companies will have to be filed fresh M&AAs with SIBA Registry in which only registered shares are issued.

Annual Taxation and Fees
An International Company is exempted from local taxation.

The licence fee depends on the authorised capital:

• US$ 100 if authorised share capital is less than US$ 100,000
• US$ 1,000 if the authorised share capital exceeds US$ 100,000

There is no requirement to file financial statements, but a company must keep records that reflect its financial position.

In order to close a Seychelles incorporated company, it must undergo dissolution. If, in the case, the company has been struck off the Register, it must at first be restored back on the Register of International Business Companies before being dissolved. Dissolution is highly recommended if you no longer need the company. If your company is not dissolved, you may still be billed for each year.

It is important that the company is in Good Standing before application can be made to SIBA and also until Dissolution is complete. This means that all of the annual invoices to date must be paid.

If you need to restore a company to good standing if the annual fees of the company are not paid and the company is not dissolved, you will need to pay the annual fees for each year that the company has not been in good standing.

EditorJurisdiction of the month: Seychelles