New international communication links in 2012 will further support the expanding financial services industry
The Seychelles consists of 115 islands in the Indian Ocean, hosting a population of about 88,000. Being an archipelago, the country is small on land-mass – but it controls a significant area of exclusive economic zone in the sea, which the government is hoping will prove a new source of wealth for the country.
Traditionally this natural resource meant the fishing industry contributed significantly to the Seychelles economy, but after promising exploration of the seabed, the government has starting issuing licences to search for petroleum and minerals.
In addition to fishing, the Seychelles economy has typically been driven by tourism. But over recent years the country has renewed its commitment to financial services, and has enjoyed significant growth in foreign direct investment inflows (see above). Seychelles has opened its doors, abolished foreign exchange control, and its currency is freely convertible.
Seychelles has a mixed legal jurisdiction based on French and English laws. Its civil law is mainly of French origin, and its penal and commercial laws are of English origin – a legacy of the country’s colonial history.
After gaining independence in 1976, the government embarked on a number of social projects to raise living standards. Today the state offers free education and health services, as well as pensions. International communications are good, and will improve in 2012 with the laying of a high-speed underwater cable linking Seychelles to Africa and Europe.
Independence also set the stage for the government to introduce legislation for financial services, and to create a climate to attract foreign direct investment. The Seychelles International Business Authority was established in 1994 to set up and regulate offshore business, and a number of laws were passed in subsequent years to enable the sector (see boxout).
Setting international standards
The Seychelles government is working to expand its network of double taxation treaties. Currently 13 treaties are in force, including one with key financial hub Cyprus, and several more have been signed but not enacted. In addition to the completed agreements, the country has approached or negotiated with another 40 countries.
Conscious of its international obligations, Seychelles has maintained a good reputation and is on the OECD’s tax cooperation ‘white list.’ There is also a continuous revision of the country’s laws to meet international norms. Seychelles plans to join the World Trade Organisation, and the agreement for accession is at an advanced stage. It is already a member of the Indian Ocean Rim and the Commission de l’Ocean Indien.
Recent recipients of foreign direct investment in Seychelles that my Law Chambers has represented include:
• Chelle Medical: Manufacturers of world-standard laryngeal masks used in operating theatres, invented in Seychelles;
• The Eden Island Marina: Reputed to be the best marina in the Indian Ocean, where investors can own luxury accommodation and moor their yachts;
• The BMI Offshore Bank: The first fully-fledged offshore bank in the Seychelles;
• Planned Fund Management: The first mutual fund licensed in the Seychelles;
• Leading hotel brands, including Berjaya, Starwood and Hilton;
• Lending institutions which have financed many Seychelles development projects.
For more information – Law Chambers of Kieran Bhogilal Shah, Tel: +248 461 1608; firstname.lastname@example.org