Seychelles: Law of Offshore

On this Page:

- SEYCHELLES TABLE OF STATUTES
- SEYCHELLES BANKING LAW
- SEYCHELLES TRUST LAW
- SEYCHELLES ELECTRONIC GAMBLING LAW
- SEYCHELLES INTERNATIONAL TRADE ZONE

Seychelles Table of Statutes

This is a non-exhaustive list of the main Seychellois statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.

Anti-Money Laundering Act 2006
Central Bank of Seychelles Act 2004
Civil Aviation Act 1996
Companies Law 1972
Companies (Special Licence) Act, 2003
Financial Institutions Act 1984
Financial Institutions Act 2004
Foreign Exchange Act 2009
Foundations Act 2009
Insurance Act 1994
Insurance (Non-Domestic Insurance Business) Regulations 1996
Insurance Act 2008
International Business Companies Act 1994
Interactive Gambling Act 2003
International Corporate Service Providers Act 2003
International Trade Zone Act 1995
International Trade Zone Regulations 1995
International Trusts Act 1994
Investment Promotion Act 1994
Limited Partnership Act, 2003
Merchant Shipping Act 1992
Mutual Assistance in Criminal Matters Act 1995
Mutual Funds Act 1997
Mutual Funds And Hedge Funds Act 2008
Protected Cell Companies Act, 2003
Securities Act 2007
Seychelles International Business Authority Act 1994


In May 2001 it was announced that several amendments to the current exchange control and money and trade taxation laws would be considered by the National Assembly in order to tackle the country's growing black market. The Seychelles aimed to close loopholes that existed in laws such as the Foreign Earnings Act, Exchange Control Act, Central Bank of Seychelles Act and the Trades Tax Act.

An amendment to the Foreign Earnings Act ensured that foreign exchange earners are obligated to use the country's banking system. A new definition of "non-resident" enlarged on the term to include "any person in or resident in Seychelles who engages in a trade, business or activity with another such person for or on behalf of or for the benefit or purpose of any person not resident in Seychelles."

Amendments to the Trades Tax Act strengthened price controls and enabled the authorities to put a 'true' value on imported goods. Changes to the Exchange Control Act required individuals who possess any foreign currency to show evidence that it was obtained from a registered dealer and prohibit the buying and selling foreign currency by authorised dealers at rates above the maximum rate or below the minimum rate determined by the Central Bank as well as prohibiting the export and import of Seychelles currency notes and coins in excess of R2,000. Amendments to the Central Bank Act led to the appointment of an Exchange Controller.

The Central Bank of Seychelles Act 2004 makes provision for the Central Bank to operate more as an independent institution.

In November, 2006, the government of the Seychelles announced the establishment of the Non-Bank Financial Services Authority (NBFSA), an organisation intended to support the liberalisation of the Seychelles economy and increase transparency in financial transactions.

According to a statement by the Department of Public Administration in the Vice-President’s Office, the setting up of the NBFSA was to be overseen by Conrad Benoiton who is credited with steering through the creation of the Seychelles International Business Authority (SIBA), the government's inward investment promotion body.

Areas falling under the remit of the body include the insurance and mutual fund sectors, and the stock exchange.

The Central Bank continues to concentrate on price stability, regulation of banks and other functions falling under the Financial Institutions Act.

“Government is divesting from parastatal activities and a process is being put in place for the sale of shares to individuals and companies," explained the statement.

"In the climate of greater transparency and liberalization, there is therefore an urgency to have a financial services body to be fully involved with the regulation of trading of shares,” it added.

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Seychelles Banking Law

Non-domestic banking in Seychelles is regulated by the Central Bank of Seychelles and is administered under the Financial Institutions Act 2004 (amended in 2008 and 2009) to cater for the offshore as well as the domestic banking. The Act makes provision for the licensing of offshore banks and incorporates the necessary flexibility to encourage growth in that sector. It also features full confidentiality with regards to information of its clients with the exception of criminal investigation cases. The following information details the Financial Institutions Act 1984 as amended in 1995, which was updated and replaced by the 2004 Act, retaining many of the 1984 Act's provisions.

Licences are issued by the Offshore Banking Department of the Central Bank and are granted only to companies incorporated under the Companies Act 1942 or foreign companies which have registered under the Companies Act. Licenses are issued for domestic banking, offshore banking, or both. When both are conducted, it must be through separate offices. Offshore banks are permitted to operate numbered accounts for their clients.

Applicants must supply extensive information to the Central Bank, including at least the following:

• the Memorandum and Articles of Association or Statutes;
• Head Office address and a list of shareholders (members);
• names of chief officers;
• the last three sets of financial accounts;
• a full business plan;
• an undertaking that funds will be provided to cover all obligations and liabilities incurred in the local office.

The Central Bank has 90 days to respond to an application, and does not have to give a reason for refusal. The refused applicant may appeal to the Minister and to the Court.

The Bank imposes various prudential requirements including the following:

• maintenance of unimpaired capital at a level agreed between the applicant and the Bank and in proportion to assets;
• maintenance of a reserve fund to which at least 10% of annual profits must be transferred until the fund equals the amount of paid-up or assigned capital;
• the average level of liquid assets must be maintained at the currently prescribed percentage of total liabilities.

The Bank requires monthly balance sheet submissions; accounts must be prepared and audited each year, and then published.

The Act contains extensive confidentiality provisions. For non-domestic banking business, disclosure is only permitted on order of the Court in response to an application by the Attorney-General.

The Bank has considerable powers of inspection and control over what it considers to be unsafe, unsound or unlawful practices.

The Anti-Money Laundering Act 2006 established a Financial Intelligence Unit (FIU) as a unit of the Central Bank, bringing the Seychelles' anti-money laundering regime more into line with international practices. The FIU has the authority to request information considered relevant to an offence under the Act, and from reporting entities, supervisory agencies and law enforcement agencies.

The FIU may enter into agreements with foreign states to facilitate the exchange of information to assist investigations into suspected cases of money laundering and terror financing.

The Anti-Money Laundering Act requires reporting entities to take "reasonable measures" to ascertain the purpose of any transaction in excess of SR100,000, or of SR50,000 in the case of cash transactions, and the origin and ultimate destination of the funds involved in the transactions.

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Seychelles Trust Law

The International Trusts Act 1994 established, for the first time, a regime for international trusts in the Seychelles; it does not provide for domestic trusts. The Act was drafted after a thorough study of current practice in a number of leading offshore jurisdictions. Under the Act, the Seychelles International Business Authority (SIBA) is appointed as the regulatory body for trusts, alongside the Court.

The Seychelles is mostly a civil law jurisdiction to which the concept of the trust was unknown; thus the Trusts Act has to be sufficient unto itself, and indeed it contains some basic definitions which include the admittance of charitable trusts, purpose trusts, constructive trusts, and trusts resulting from action by the Court. The following are some of the key features of the Seychelles Trust regime:

• An international trust may be created in writing, by will or by oral declaration;
• The settlor must reside outside the Seychelles for the duration of the trust; at least one trustee must reside in the jurisdiction, but this trustee may be an International Business Company (IBC), which shall not thus be deemed as resident; an IBC may therefore be a settlor;
• A financial institution licensed under the Financial Institutions Act 1994 may also be a settlor;
• The trust property may not include any Seychelles movable or immovable property or interests or rights to them in a Seychelles company owning such property;
• The local trustee may with permission own local property for the trustees' accommodation, and, again with permission, may invest in local securities;
• The settlor may choose the proper law of the trust; in the absence of a choice, the Act provides guidelines for establishing the proper law; in any event, the Seychelles Court has exclusive jurisdiction, and will apply the proper law itself (this allows the Act's forced heirship provisions to be effective);
• The names of settlors and beneficiaries and the trust accounts are confidential under the Act, unless a Court orders disclosure under the Anti-money Laundering Act;
• The standard perpetuity period is 100 years; but it does not apply to charitable or purpose trusts; a settlor cannot revoke a trust, but the beneficiaries can; the Court may revoke a fraudulent trust;
• The accumulation of income is permitted;
• A settlor can also be a trustee, and a beneficiary but not the sole beneficiary;
• Forced heirship judgements are specifically excluded.

The Act contains extensive wording dealing with all aspects of the setting-up of trusts, the rights and responsibilities of trustees, and the powers of the Court. The above brief details are given for purposes of general information, but reference should be made to the Act itself and to professional advisers before any action is taken.

A White Paper memorandum dated February 19, 2011, outlined proposals for a new Trusts Act, which aims to modernize and improve on Seychelles’ existing trust law, the International Trusts Act, 1994 (ITA), and to provide a stronger basis for building Seychelles trust business.

The memo identfies a number of shortcomings in the ITA which the proposed Trust Act 2011 would address. These include:

• The broad definition of international trust is problematic as regards foreign law trusts;
• While the ITA purports on the one hand to allow for Seychelles international trusts governed by foreign law, in contradiction of that section 7 gives the Seychelles courts “exclusive” jurisdiction in all matters pertaining to international trusts;
• There is no provision for private trust companies;
• Tax exemptions not provided for in the ITA itself; and
• Non-inclusion of various modern offshore trust law features and general need for updating

The memo stated that the draft Trusts bill 2011 is heavily modelled on Jersey's Trusts Act.

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Seychelles Electronic Gambling Law

The Interactive Gambling Act, 2003 provides for the licencing and regulation of any internet gambling business carried on in or from Seychelles. The Act conforms to strict international regulatory norms and draws heavily from solid Australian legislation.

"Interactive gaming" under the new Act extends to where:

• a prize of money or something else is offered, or can be won, under the rules of the game;
• a player enters, or takes a step in, the game by means of a telecommunication device (including interaction via a computer) and pays or undertakes to pay money or other valuable consideration to enter the game; and
• the winner is decided wholly or partly by chance; or by a competition or other activity in which the outcome is wholly or partly dependent on the player's skill.

The Act provides for the creation of special "players' accounts" whereby the operator can hold funds of a player on trust for them and with the operator having the right to debit the amount of a wager in an authorised game. Winnings may also be paid directly into these players' accounts. This option ensures that the player does not have to produce credit card and personal information for every wager, only when "recharging" his or her account. Player protection is afforded through these trust accounts, as well as operator and player security. An operator cannot provide credit to a player.

The regulatory authority will only grant licences to fit and proper persons and retains the right of approval of the gaming software and control system. The Act requires the annual auditing of an operator's accounts and financial statements; and submission of a copy of the audit report to the regulatory authority. The Act also provides for inspectors who will have powers of entry and search in the course of monitoring or enforcing compliance with the Act.

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Seychelles International Trade Zone