Rupert Simeon examines the great strides the Seychelles is making to comply with international transparency standards.
A New Strategy Secures Seychel…
The Seychelles international financial centre is making great strides towards meeting international compliance and transparency standards and has negotiated and signed nine Tax Information Exchange Agreement and 28 Double Taxation Agreement, the most recent one being with Guernsey.
The Seychelles Government has at the forefront of its economic development a vision of making Seychelles the premiere financial centre for Africa and the Middle-East. It intends to add to the 28 DTAAs and nine TIEAs, which have already been signed and will soon move towards becoming part of the Multilateral Convention on Mutual Administrative Assistance in tax matters.
In 2013 Seychelles was ranked the highest East-African country in the 2013 Ibrahim Index of African Governance and in the categories of Human Development, Infrastructure, Education and Health.
The political and social stability, modern legislative framework, advantageous time zone and wealth of experience in tax planning and management makes Seychelles the ideal gateway for investment from the rest of the world into Africa and Asia. The jurisdiction so far has incorporated over 100,000 IBCs and registered over 500 International Trusts.
Seychelles as a reputable well-regulated jurisdiction offers “compliant confidentiality” - that is: confidentiality which does not contravene international tax rules and best practice regarding transparency and the prevention of financial crime. This means that provided the trust has not been established to evade tax, or conceal the source of funds, or for any other unscrupulous reason, then the beneficiaries’ identities and details regarding the assets placed into trust remains a private matter.
Seychelles has in the past been heavily reliant on its fishing and tourism sector but now the government has realised the discernible need to position Seychelles as a service based economy and has invested in education in the financial services and banking sectors.
Today, the country boast over 70 licensed corporate service providers, trustee service providers and foundation service providers operating in Seychelles. As a result, Seychelles has a number of attractive products and services to offer such as the CSL (Company Special License), which is subject to only 1.5 per cent tax of its worldwide (gross) income and is incorporated as a domestic company under the Companies Act 1972 but is awarded a special license, which grants the company a special status as it benefits from access to the Seychelles’ growing network of Double Taxation Avoidance Agreements (DTAAs) and can also operate part of its business within Seychelles.
Meanwhile, the Seychelles Mutual Fund & Hedge Fund Act, 2008 allows for full exemption from Seychelles business tax on the income of licensed funds and exempt foreign funds are additionally exempted from withholding tax and stamp duties.
Foreign funds, which are licensed in a recognised jurisdiction and listed on a stock exchange, are exempt from requiring a Seychelles license. These ‘Exempt Foreign Funds’ can be of particular interest to fund managers looking for the best location from which to operate their fund.
Seychelles is also advancing in other areas of the financial sector and saw the launch of Trop-X, its first Securities Exchange in December 2012. Trop-X is part of the Quote Africa Group, which is underway with the establishment of a Pan-African Exchange Network. It provides an ideal platform for investment banks, fund managers, venture capital/private equity firms, private client brokers and asset managers focused on African securities.
The Seychelles Investment Board in partnership with SAOPRA (Seychelles Association of Offshore Practitioners & Registered Agent) are moving forward in a very cohesive and bold manner to explore new frontiers of financial services and at the same time raising standards of practice to continue serving clients in a professional and efficient manner to maintain the excellent reputation of the jurisdiction. The Government of Seychelles is presently looking into the prospect of introducing legislation that will allow for the operation of Islamic banking and finance.
Overall, Seychelles is well placed to become a key Indian Ocean hub.