Seychelles as a Jurisdiction
Introduction
Seychelles is home to a growing offshore financial services sector that is similar to specialist jurisdictions like the Cayman Islands and Bermuda. Cayman is home to some 60% of the world’s hedge funds and Bermuda is in the top 5 largest insurance and reinsurance markets in the world. OFC’s like Seychelles are facilitators of global cross border investment and risk transfer. With MERJ group, Seychelles is similarly poised to become the leading offshore global capital markets jurisdiction.
Statistics:
· 24 licensed securities dealers
· 67 licensed corporate services providers
· Over 75,000 active companies registered
· Over 8,525 companies registered in 2018 with a strong presence in the Asian markets, including China
· 760 active registered foundations
· 784 active trusts
Fundamentals
· Location: between 4 and 10 degrees south of the equator in the Indian Ocean approximately 1000 miles from the east coast of Africa.
· Time Zone: GMT+4
· Population: est. 94,737 (2017)
· Capital: Victoria
· Airport: Seychelles International Airport
· Language: English, French and Creole are official languages, but English is the main business language
· Political System: Democratic Republic
· Currency: Seychelles Rupee (No currency restrictions)
Background
The Republic of Seychelles is an independent country that sits atop the Seychelles microcontinent in the Indian Ocean as an archipelago comprising 115 of the most scenic islands in the world. Seychelles covers an economic zone of some 1.4 million km2. 41 of those islands, including the largest island of Mahe are the oldest mid-oceanic granitic islands in the world and the rest are coral islands. The Seychelles plateau and inner islands were once part of the Gandwanaland supercontinent.
Seychelles is a member of the United Nations, African Union, Commonwealth of Nations and La Francophonie. Seychelles also belongs to the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC).
History
The Seychelles islands were first discovered by Arab traders many centuries ago and later visited by Portuguese merchants as early as the 16th century before the first settlements in Seychelles around 1770 when the islands were first settled by the French. The first permanent settlers were from France, Africa and India. From the beginning Seychelles has been a melting pot of different ethnicities, religions and traditions that lives on today in the “Creole Spirit”.
The first permanent settlers were from France, Africa and India. From the beginning Seychelles has been a melting pot of different ethnicities, religions and traditions that lives on today in the “Creole Spirit”.
Seychelles remained a French territory until it was later ceded to Britain after the treaty of Paris in 1814. In 1903 Seychelles gained the status of a British Crown. Seychelles remained part of the British empire until 1976 when it gained its independence. Seychelles remains an independent member of the Commonwealth of Nations.
Climate
The climate is warm year around usually staying between 24 and 32 degrees Celsius. All but the southernmost islands are outside of the cyclone belt meaning the country is spared the destruction of hurricanes/cyclones and tornadoes that frequently affect the Caribbean jurisdictions.
Government
Seychelles is a multi-party democratic republic with a President that is independently elected heading the executive branch and a National Assembly made up of 33 democratically elected representatives.
Governance
· Mo Ibrahim Index on African Governance (2018) — 2nd out of 54 countries
· Transparency International Corruption Index (2018) — 1st in Africa, 28th overall out of 178 countries (As a reference point USA is 22nd)
· UN Human Development Index (2018)
Economy
· Main Industries: tourism, fisheries and financial services (i.e. banking, corporate services, trust services, securities, etc.)
· GDP Per Capita (Nominal) — $16,434 (2018)
· 1st in Africa
· 47th in the world
· GDP Per Capita (PPP) — $30,505 (2018
·1st in Africa
· 46th in the world
· Average Annual GDP Growth Average since 2009–4.8%
· Unemployment — 3.5% (Jan 2019)
Telecommunications
Seychelles is top in the African Union for internet speed. The main island of Mahe is fed by undersea fiber optic connectivity to more than one major undersea cable network off the coast of eastern Africa. The main telecommunications companies in Seychelles are Cable and Wireless, Airte and Intelvision. Seychelles boasts an advanced 4G wireless infrastructure and will begin upgrading to 5G in 2020. Most businesses are connected end to end by fiber optic cable and by 2020 the entire main island of Mahe and every home and business will be connected end to end by fiber optic cable.
Air Services
Seychelles is only two connecting flights to nearly every major city in the world. The country has its own airline, Air Seychelles, which is jointly owned by the Government of Seychelles and Etihad Airlines which is the operator. Other major airlines with the most flights to Seychelles are Emirates and Qatar Airways which both have daily flights. Other airlines serving Seychelles are Air France, British Airways, Qantas, Turkish Airlines, Jet Airways, South African Airways, Austrian Airlines, Ethiopian Airlines, Sri Lankan Airlines and Kenya Airways.
Tax
· Tax Basis: territorial
· Business Tax: 25–33% (Seychelles sourced income only)
· Personal Income Tax: 0–30% (effectively a payroll tax as this is only on compensation from Seychelles companies)
· Capital Gains Tax: 0%
· Mutual Funds — 0%
· Securities Licensees — 1.5% of gross income
Standard Setting Bodies
Seychelles is in good standing with international regulatory bodies.
· OECD Global Forum on Transparency and Exchange of Information for Tax Purposes — largely compliant
· OECD Base Erosion and Profit Shifting (BEPS) Initiative — not harmful
· FATF — good standing
· Oxfam Tax Haven Blacklist — not listed (Source)
Regulators
· Financial Services Authority — Associate Member of IOSCO (full membership status expected in H1 2020)
· Financial Intelligence Unit — member of FATF regional body ESAAMLG
· Central Bank of Seychelles
Political and Diplomatic Ties
Seychelles is an offshore financial services center with strong economic and political ties to the African Union countries as well as key regional countries including the UAE, India and China. 6 of the 10 fastest growing countries in the world in 2018 were in Africa. India was another and China is growing rapidly as well.
With Seychelles territorial waters covering some 1.4 million km2 Seychelles is a regional player and is a relatively large political player on the international scene compared to its size due to the positioning of its territorial waters covering a sizeable swath off the east coast of Africa. China has a relatively larger embassy in Seychelles and is very active with the government. Equally India, UK and the USA have diplomatic missions in Seychelles and stay in close contact. Seychelles is a popular port of call for US and allied militaries patrolling the Indian Ocean and surrounding areas.
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