Seychelles

Bureau of Economic and Business Affairs
Report
July 5, 2016

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Executive SummaryShare    

With a population of just over 91,000, Seychelles is an island nation located off the eastern coast of Africa in the Indian Ocean. Seychelles gained its independence from the United Kingdom in 1976, at which time the population lived at near subsistence level. Today, Seychelles’ main economic activities are tourism and fishing, and the country aspires to be a financial center. Although the World Bank recently designated Seychelles as a “high income” country, its wealth is not evenly distributed. Indeed, the United Nations Development Programme’s Human Development Report for 2015 found that Seychelles has the highest income inequality in the world, with a Gini coefficient of 65.8. http://hdr.undp.org/sites/default/files/2015_human_development_report.pdf.

In 2014 and 2015 Seychelles saw GDP growth of 3.3 and 3.5 percent. The International Monetary Fund (IMF) has predicted GDP annual growth between 3.5 and 3.7 % through 2018. The IMF assesses the principal domestic economic risk in Seychelles as potential losses in state owned enterprises, which could endanger the public debt reduction achieved by the central government. The IMF sees external risks stemming from weakness in the tourism market.

Seychelles experienced a socialist coup in 1977 which resulted in a centrally planned economy and, in the short term, rapid economic development. However, serious imbalances such as large deficits and mounting debts contributed to persistent foreign exchange shortages and slow growth that plagued Seychelles through the first decade of the 21st century. After defaulting on interest payments due on a USD 230 million bond in 2008, the government of Seychelles (GOS) turned to the IMF for support. To meet the IMF’s conditions for a stand-by loan, the GOS implemented a program of reforms, including a liberalization of the exchange rate regime, devaluing and floating the Seychellois Rupee (SCR) and eliminating all foreign exchange controls. Seychelles completed its five-year reform program in late 2013.

Despite GOS attempts to diversify the economy, it remains focused on fishing and tourism. Seychelles’ vast Exclusive Economic Zone (EEZ), which encompasses 1.3 million square kilometers of the western Indian Ocean, is a potential source of untapped oil reserves and represents potential business opportunities for U.S. entities. Seychelles also has a small, but growing, offshore financial sector. There is also scope for U.S. investment in renewable energy as Seychelles seeks to reduce its heavy dependence on imported fossil fuels while preserving its naturally beautiful environment.

Seychelles welcomes foreign investment. The country’s investment policies encourage the development of Seychelles’ natural resources, improvements in infrastructure, and an increase in productivity levels, but stress that this must be done in an environmentally sound and sustainable manner.

Since multi-party elections began in Seychelles in 1993, the ruling Parti Lepep has traditionally won elections by large margins. However, the December 2015 presidential elections led to a run off and a very narrow victory for the incumbent President James Michel. The opposition has filed legal challenges to the election, asserting that it was fraught with corruption. At the time of drafting this document, the legal challenges are ongoing.

Table 1

Measure

Year

Index or Rank

Website Address

TI Corruption Perceptions index

2015

40 of 168

https://www.transparency.org/country/#SYC

World Bank’s Doing Business Report “Ease of Doing Business”

2015

95 of 189

http://www.doingbusiness.org/data/exploreeconomies/seychelles/

Global Innovation Index

2015

65 of 141

https://www.globalinnovationindex.org/

U.S. FDI in partner country ($M USD, stock positions)

   

Not available

World Bank GNI per capita

2014

14,100

data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign InvestmentShare    

Attitude Toward Foreign Direct Investment

Seychelles has a favorable attitude toward foreign direct investment. The government’s objective is to promote economic and commercial relationships to sustain its tourism and fishing industries, which are currently the main drivers of economic growth, as well as to diversify the economy. However, the GOS reserves certain types of business activities for domestic investors only. The Seychelles Investment (Economic Activities) Regulations provide a detailed list of such activities as well as those businesses foreigners can invest in. The list is available at: http://www.sib.gov.sc/downloads/legislations/009a%20Seychelles%20Investment%20Act%20(ECONOMIC%20ACTIVITIES)%20REGULATIONS%202014.pdf.

Other Investment Policy Reviews

To date, Seychelles has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD), or the United Nations Conference on Trade and Development (UNCTAD). Seychelles became the 161st World Trade Organization (WTO) member in March 2015 when the National Assembly ratified accession.

Laws/Regulation of Foreign Direct Investment

The Seychelles Investment Act of 2010 governs foreign direct investment (FDI) in Seychelles (http://www.sib.gov.sc/downloads/legislations/009%20Seychelles%20Investment%20Act,%202010.pdf). Since the financial crisis of 2008 and the implementation of IMF reforms, Seychelles has successfully attracted FDI. In 2014, Seychelles saw USD 229 million in FDI inflows. Although the Seychelles Investment Board (SIB) serves as the investment promotion agency for Seychelles, it also advises foreign investors on the laws, regulations, and procedures for their activities in Seychelles. SIB’s website is found at www.sib.gov.sc.

Business Registration

According to the World Bank, it takes 14 days on average to obtain a business license in Seychelles. Details on starting a business in Seychelles are available at http://www.doingbusiness.org/data/exploreeconomies/seychelles#starting-a-business. Details on registering a business are at the Department of Legal Affairs’ Registrar Division’s web site: http://www.registrar.ezratec.com/companybusiness. Companies, including foreign ones, can register online at http://www.sib.gov.sc/index.php/info-centre/others/online-business-registration. Seychelles law does not require companies to notarize the Memorandum or Articles of Association, but many companies do so in practice before submitting their documents to the Registrar of Companies as part of the application for incorporation.

The Small Enterprise Promotion Agency (SEnPA) is responsible for promoting small enterprises in Seychelles. Services provided by SEnPA include business planning, training, mentoring, marketing expertise and identification of business opportunities for SMEs. The Embassy is not aware of any standard definition of micro, small and medium-sized enterprises in Seychelles.

Industrial Strategy

The SIB is the main government agency responsible for promoting investment in the Seychellois economy. In an effort to diversify its economic base away from fisheries and traditional tourism, the SIB promotes investment in the following areas:

1.  Agribusiness

2.  Food processing and packaging

3.  Eco-tourism and health/medical tourism

4.  Renewable energy

5.  Marine technology, including oil exploration

6.  Ocean industry support services

7.  Environmental technologies, including solid waste management and recycling

 

Limits on Foreign Control and Right to Private Ownership and Establishment

Seychelles does not place limits on foreign ownership or control of resident companies. While SIB and the government of Seychelles encourage foreign investors to collaborate with a local partner, there is no formal requirement. There are some restrictions on the types of activities foreign entities can engage in, mainly in the tourism sector.

The Embassy is not aware of any sector-specific restrictions that U.S. investors claim create challenges for market access for foreign investors.

Privatization Program

The GOS remains a major participant in the local economy although the private sector is expanding, especially into the tourism and services sectors. A key aspect of the government’s reform program relates to increasing the economy’s market orientation and supporting private sector development. In this context, the government worked closely with the IMF and the World Bank to accelerate its privatization program and improve the business climate through a comprehensive review of the legal and regulatory framework. At present, the Embassy is not aware of any plans for privatization of major government enterprises. The Embassy is also not aware of any formal legal barriers to foreign investors participating in privatization. In the past the GOS carried out privatization programs through the partial sale of shares in state owned enterprises to the public.

Screening of FDI

The GOS established the SIB as a one-stop shop for all matters relating to business and investment in Seychelles. The SIB’s main functions are to promote investment and to facilitate the investment process within the administrative and legal framework. The SIB also assists in screening potential investment projects in cooperation with other government agencies. The GOS is keen to ensure that business activities are not conducted at the expense of Seychelles’ natural environment. For a business to operate, investors need to apply for a license from the Seychelles Licensing Authority. The Embassy has received no formal comments from U.S. businesses in Seychelles with regard to the foreign direct investment screening mechanism. The GOS established an Investment Appeal Panel in 2012 to provide an appeal mechanism for investors to challenge GOS decisions regarding investments or proposed investments in Seychelles. More information is available at http://www.sib.gov.sc/index.php/investment-guide/investment-appeals.

Competition Law

The SIB reviews all transactions for competition-related concerns (whether domestic or international in nature).

2. Conversion and Transfer PoliciesShare    

Foreign Exchange

Since the IMF reform package of 2008-2013, the GOS places no restrictions or limitations on foreign investors converting, transferring, or repatriating funds associated with investment. Funds are freely converted. Seychelles maintains a floating exchange rate for the Seychelles Rupee, which has mostly fluctuated between SCR 12 and SCR 15 to USD 1 over the past five years.

Remittance Policies

Foreign exchange controls were removed in 2008 and foreign investors are free to repatriate their profits and other incomes. The Embassy is unaware of any planned changes to remittance policies, time limits on remittances, or use of any legal parallel market. According to the Department of State’s Bureau for International Narcotics and Law Enforcement Affairs International Narcotics Control Strategy Report for 2016, Seychelles is currently listed as a country/jurisdiction “of concern.”

http://www.state.gov/documents/organization/253983.pdf

3. Expropriation and CompensationShare    

The Lands Acquisition Act 1978, last amended in 1990, states that in the event of compulsory acquisition or taking of possession of any property by the government, the latter should pay prompt and full compensation for the property. The GOS may expropriate property in cases of public interest or for public safety. Following the 1977 coup, the new GOS engaged in expropriation of land for redistribution or for use by the state. With the return of a multi-party political system in 1992, the GOS compensated some of those who had lost land to expropriation/redistribution in the late 1970s. There have been no expropriations since the 1990s aside from public works and infrastructure projects, and in these cases there is a process for obtaining compensation. We see no indications of possible major expropriation in the future and no pattern of discrimination against U.S. persons.

4. Dispute SettlementShare    

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

Seychelles’ legal system is a blend of English common law, the Napoleonic Code, and customary law. Civil matters, such as contracts and torts, are governed by the Civil Code of Seychelles, which is derived from the French Napoleonic Code. However, the Company Law, as well as the country’s criminal law, are based on British law. In both civil and criminal matters, the procedural rules derive from British law. Although the judicial branch is independent of the executive branch, many Seychellois believe that well-connected individuals receive special treatment in the courts. Seychelles does not maintain a specialized commercial court. Judgments of foreign courts are governed by the Foreign Judgments (Reciprocal Enforcement) Act of 1961, Section 3. The World Bank ranked Seychelles 138 out of 189 in enforcing contracts in its 2016 Ease of Doing Business Report.

Bankruptcy

Bankruptcy in Seychelles is governed under the Insolvency Act of 2013. According to the Act, an individual may be discharged from bankruptcy 3 years from the date of its declaration. Bankruptcy is not criminalized in Seychelles. According to the 2016 World Bank’s Doing Business Report, Seychelles ranks 63d out of 189 countries on the Resolving Insolvency index and it takes on average two years to complete a bankruptcy.

Investment Disputes

Parties involved in investment disputes are encouraged to resolve their disputes through arbitration and negotiation. The Seychelles Investment Act of 2010 created an Investment Appeal Panel to which aggrieved investors may appeal for a review of a decision made by a public sector agency with regard to their investments or proposed investments in Seychelles. In addition, investors may appeal to the Supreme Court (Court of Appeal) in the event they are not satisfied with the decision of the Investment Appeal Panel. In the World Bank’s 2016 Ease of Doing Business Report, Seychelles ranked 105 out of 189 for protecting minority investors.

International Arbitration

Due to Seychelles’ small size and relatively short recent history with foreign direct investment, there is no precedent for international arbitration in Seychelles, although the legal framework exists through the Seychelles Investment Act of 2010.

ICSID Convention and New York Convention

In 1978 Seychelles became a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). Seychelles has not signed the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).

Duration of Dispute Resolution

The court system in Seychelles in general is slow. Business disputes litigated in court can last three to five years before finally reaching a judgment. Insufficient resources, as well as the possibility of multiple appeals, all contribute to a significant backlog of cases. If and when resolved, however, court decisions are generally enforced. The government of Seychelles and the Seychelles Investment Board encourage arbitration through the Investment Appeal Panel as detailed in the Seychelles Investment Act of 2010.

5. Performance Requirements and Investment IncentivesShare    

WTO/TRIMS

The Seychelles National Assembly ratified WTO accession in March 2015, making Seychelles the 161st member. The Embassy is not aware of the GOS notifying the WTO of any measures inconsistent with its Trade Related Investment Measures (TRIMs) requirements.

Investment Incentives

The GOS has enacted legislation providing for incentives for investment in several sectors: the Fisheries Incentives Act; the Tourism Incentives Act; the Seychelles International Trade Zone Act; as well as fiscal incentives under the Investment Code. Incentives under these Acts most often take the form of tax credits, tax holidays, duty-free access for the import of materials required for the initial investment, and expedited work permits for foreign employees that move to Seychelles.

Research and Development

We do not know of any barriers to U.S. or other foreign firm participation in government/authority-financed research and development programs. Seychelles welcomes collaboration from foreign partners in research, technology transfer, and development of new sectors.

Performance Requirements

The government of Seychelles does not mandate local employment, nor are there local employment mandates for senior management or directors. Visa, residence, and work permit requirements are not excessively onerous. However, investors operating in Seychelles are expected to abide by the following obligations:

  • To comply with the provisions of the governing laws on investment procedures and to carry out investment activities correctly in accordance with the relevant approvals granted. This includes the responsibility of the investor for the accuracy and truthfulness of the contents of investment proposals and registration; and of the lawfulness of document on certification;
  • To discharge fully their financial obligations, including taxation, in accordance with the law
  • To carry out the provisions of the laws on accounting and auditing;
  • To carry out the provisions of the laws on registration of companies and other legal entity;
  • To carry out the provisions of the employment laws and regulations.

Data Storage

The Embassy has no information regarding the requirements, if any, for foreign IT providers to turn over source code or to provide access to surveillance. Similarly, the Embassy has no information on the mechanisms which are used to enforce any rules on maintaining a certain amount of data storage in Seychelles.

6. Protection of Property RightsShare    

Real Property

The courts enforce interests in real property. Mortgages and liens are enforced and the land registrar is relied upon to resolve land disputes. All lands in Seychelles are either publicly or privately held. According to the World Bank’s 2016 Doing Business Report, Seychelles ranked 67th out of 189 countries in the Registering Property index. In 2014 the GOS discontinued selling state land to non-Seychellois.

Intellectual Property Rights

The Republic of Seychelles respects intellectual property rights, and regards laws and other measures to protect them as crucial for long-term economic development. The GOS considers efficient and effective protection of Intellectual Property Rights to be vital for promoting foreign investment, the transfer and dissemination of technology, and protecting local business and artists as well as facilitating the integration of Seychelles' into the regional and global economies. Seychelles joined the World Intellectual Property Organization (WIPO) in March 2000. In addition, the country became a contracting party to the Paris Convention for the Protection of Industrial Property and the Patent Cooperation Treaty (PCT) in November 2002. Seychelles is also a member of the African Regional Intellectual Property Organization (ARIPO). In 2013, the GOS established an Intellectual Property Office to enable the registration of patents, trademarks and copyrights.

The Copyright Act, the Trade Marks Decree and the Patents Act contain provisions that lay down the procedures and measures dealing with infringement of intellectual property rights. Foreign nationals and Seychellois citizens are treated equally in regard to IP laws. Seychelles legislation does not discriminate between nationals and foreigners, following WTO principles. Enforcement of IPR protection laws is limited due to the fact that very few international brands and trademarks have local or even regional representatives.

While no statistics are publicly available, the Seychelles Revenue Commission’s customs officials monitor incoming shipments for counterfeit goods. However, its focus is on counterfeit products that pose a public health risk, such as medications and electrical appliances. Counterfeit (or unlicensed sale of) apparel, CDs, and DVDs are generally available.

Seychelles is not listed on USTR’s 2015 Special 301 report or the Review of Notorious Markets Report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

Resources for IP Rights Holders

The Embassy’s Economic Officer is the POC for IP issues. Contact information is provided below:

Paul GormleyEconomic Officer
U.S. Embassy to Mauritius and Seychelles
Port Louis, Mauritius
+230 202 4465
GormleyPJ@state.gov

A list of available attorneys practicing in Seychelles can be found at http://seychelles.usvpp.gov/list_of_attorneys2.html.

7. Transparency of the Regulatory SystemShare    

Although the government has made considerable efforts to liberalize the economy, Seychelles continues to suffer from overregulation. Concerns over government corruption have focused on the lack of transparency in the privatization and allocation of government-owned land and businesses. While the legal and regulatory framework is in place for transparent governance, many Seychellois believe that those well-connected to the government of Seychelles, whether foreign or local, receive preferential treatment.

In an attempt to promote greater transparency in the public procurement system, Seychelles’ National Tender Board publishes all its tenders on its web site and local newspapers. It also publicizes the contracts that have been awarded, including the name of the successful bidder as well as the bid amount in all local newspapers. The government has also set up a Procurement Oversight Unit, which serves as a public procurement policy and monitoring body.

Proposed laws and regulations, as well as final laws, are published in the Official Gazette on a monthly basis. Often, however, the legislation is voted into law by the National Assembly before the Official Gazette has been made publicly available.

8. Efficient Capital Markets and Portfolio InvestmentShare    

Seychelles has a number of laws that govern the financial services sector: Financial Institutions Act 2004, Anti-Money Laundering Act 2006, Data Protection Act, Mutual and Hedge Fund Act 2007 and Central Bank Act 2004. In addition to the Central Bank of Seychelles, there are nine commercial banks: Bank of Baroda, Barclays Bank, Habib Bank, Mauritius Commercial Bank, Nouvobanq, Seychelles Commercial Bank, BMI Offshore Bank, Bank of Ceylon, and Bank Al Habib Ltd. On March 1, 2016, Barclays announced plans to reduce its investment in Africa, but stated that operations in Seychelles would not be affected. Seychelles also has two non-banking financial institutions, the Seychelles Credit Union and the Development Bank of Seychelles, which provide flexible financing for businesses and projects to promote economic growth and employment.

A wide range of financial services such as checking (current) accounts, savings accounts, loans, transactions in foreign currencies, and foreign currency accounts are available in the banking system. The government established a securities exchange in November 2012 as part of its efforts to diversify the financial services sector.

Seychelles welcomes foreign portfolio investment. However, portfolio investment in Seychelles is limited by the small size of the economy and banking sector; the entry and exit of sizeable positions may have an outsized impact on the Seychelles Rupee and the economy in general. Existing policies do facilitate the free flow of financial resources in and out of the economy. The government of Seychelles respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transaction. Foreign investors are able to obtain credit on the local market and through the Seychelles banking system; a variety of credit instruments are available to both local and foreign investors.

Money and Banking System, Hostile Takeovers

The Seychelles banking sector is generally healthy, although it is limited by its small size and is reliant on correspondent bank relationships. According to the Central Bank of Seychelles in January 2016 nonperforming loans to total gross loans in the Seychelles banking sector stood at 7.6 percent, and foreign currency deposits at SCR 4,974 million (USD 382 million).

Seychelles has a two-tier banking system that separates the central and commercial bank functions and roles. The commercial banks, both domestic and foreign, are regulated and supervised by the Central Bank of Seychelles. According to the Central Bank of Seychelles Act 2004, the CBS is responsible for the formulation and implementation of the Seychelles' Monetary and Exchange Rate policies. The Central Bank of Seychelles is the only administrative body responsible for receiving applications for banking licenses, whether domestic or offshore, and issuing the corresponding licenses.

Foreigners and foreign/offshore firms must establish residency or proof of business registration in order to obtain a bank account.

9. Competition from State-Owned EnterprisesShare    

Seychelles is one of 14 countries participating in the State Owned Enterprises (SOE) Network for Southern Africa, which was launched in 2007 to support, in collaboration with the OECD, the southern African countries in their efforts to improve the performance of SOEs. The government has shares in a number of enterprises, including Air Seychelles, the Indian Ocean Tuna Company, Seychelles Commercial Bank, and Seychelles Broadcasting Corporation. Seychelles’ SOEs are active in housing, civil aviation, tourism, banking, import/export, retail, and public utilities. Seychelles SOEs and parastatal entities are audited on a rotating basis by the Office of the Auditor General. SOE structure varies by sector and mandate. The Seychelles economy is so small and focused on fishing, tourism, and offshore finance that there is often little space for more than one major operator, whether private or public. SOEs are free to purchase and/or supply goods and services from private sector and foreign firms, depending on the sector and situation.

There is a growing concern in the business community that SOEs such as Seychelles Trading Company have been allowed to exceed their explicit mandate and compete unfairly.

Seychelles is not a party to the Government Procurement Agreement (GPA) within the framework of the WTO.

OECD Guidelines on Corporate Governance of SOEs

The governance of SOEs varies depending on their purpose and structure but Seychellois SOEs do not adhere to the OECD Guidelines on Corporate Governance. Most SOEs and parastatal bodies both maintain a board of directors and make regular reports to the corresponding Minister/Ministry. Seats on the boards of many Seychelles’ SOEs are appointed by the President.

Sovereign Wealth Funds

Seychelles does not maintain any sovereign wealth funds.

10. Responsible Business ConductShare    

Seychelles has a great awareness of corporate social responsibility, especially in environmental protection and social programs, but Corporate Social Responsibility (CSR) is generally regarded as a function of government. Since 2013, the Seychelles Revenue Commission collects a CSR tax of 0.5 percent on monthly turnover for businesses with an annual turnover of SCR 1 million or more. Officially, there are no waivers available for foreign investors with regard to labor, employment rights, consumer protection, or environmental protections. The Citizens Engagement Platform Seychelles, an umbrella organization for Seychelles’ NGOs, provides a summary list of NGOs active in the country on an annual basis to the Ministry of Finance, who then decides which organizations would benefit most from the CSR tax revenues. The areas recently targeted under CSR include: the environment; waste and coastal management projects; health and wellness, including sports and leisure; training and capacity building; small enterprise development; community development; child and youth development; and arts and crafts.

Seychelles currently has no production in the extractive sector, but international companies have undertaken petroleum exploration activities off-shore. The Extractive Industries Transparency Initiative (EITI) accepted Seychelles as a candidate country in August 2014.

11. Political ViolenceShare    

The constitution provides citizens the right to change their government peacefully, and citizens exercise this right in practice through periodic elections based on universal suffrage. Seychelles has not experienced large-scale political violence since the late 1970s. The People’s Party, commonly known as Parti Lepep, has governed Seychelles since the 1977 coup and has won every election since introducing multi-party democracy in 1992. However, as noted above, the recent election results of December 2015 are subject to an ongoing legal challenge.

12. CorruptionShare    

While Seychelles’ Penal Code provides a legal framework for combatting corruption, the GOS has taken little action in response to alleged corruption.

In 2003, the government of Seychelles published the Public Service Code of Ethics and Conduct, the stated purpose of which is to provide guidance to public sector employees on the standards of behavior required of them and “to provide a basis for more detailed codes that are required to meet the particular circumstances of individual public sector organizations.” The Public Officer’s Ethics Act of 2008 prohibits personal enrichment through public office, defines and outlaws bribery, provides guidelines for avoiding conflict of interest, and mandates declaration of financial assets for public officials.

The government does not require private companies to establish internal codes of conduct. There is no dedicated anti-corruption unit in Seychelles. The constitution provides for an Ombudsman, but in practice the Office of the Ombudsman has not been proactive in rooting out corruption and investigating allegations in collaboration with the police. We do not know of any NGOs investigating corruption in Seychelles.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Seychelles signed the UN Convention against Corruption in February 2004 and ratified in March 2006. Seychelles is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Dora Zatte
The Ombudsman
Office of the Ombudsman
Room 306, Aarti Chambers, Mont Fleuri, Mahe
+248 225147
ombuds@seychelles.net

13. Bilateral Investment AgreementsShare    

Currently the U.S. and Seychelles do not have a bilateral investment agreement. However, the U.S. signed a Trade and Investment Framework Agreement (TIFA) with the Common Market for Eastern and Southern Africa (COMESA) in 2001, and Seychelles is a COMESA member.

Bilateral Taxation Treaties

There is no bilateral taxation treaty between the U.S. and Seychelles. Seychelles has signed Double Taxation Avoidance Agreements with China, South Africa, Oman, Botswana, Mauritius, Thailand, Malaysia, Vietnam, Cyprus, Belgium, Indonesia, the United Arab Emirates, Barbados, Kuwait, Qatar, and Zimbabwe, Bahrain, Kenya, Sri Lanka, Guernsey, and Singapore. Seychelles has signed Bilateral Investment Treaties with Cyprus, Egypt, China, France, and India.

14. OPIC and Other Investment Insurance ProgramsShare    

Seychelles and the United States signed an OPIC investment agreement in 2012: https://www.opic.gov/sites/default/files/docs/africa/Seychelles-signed-02-03-2012-entered-into-force-10-05-2012.pdf. Due to the small size of the economy, there is little potential for OPIC programs in Seychelles, although Seychellois firms and investors may seek OPIC financing or insurance for joint ventures elsewhere in Africa and Asia.

15. LaborShare    

The GOS estimates its labor force at approximately 48,000, out of which about 70 percent are employed by the private sector. Foreign migrant workers, who comprise about 24 percent of the labor force, are mainly employed in the construction and commercial fishing sectors. According to the latest figures from Central Bank of Seychelles, the unemployment rate was 4.7 percent in 2014, compared to 1 percent in 2013.

Seychelles has been a member of the International Labor Organization (ILO) since 1977, and has ratified all of the International Labor Organization (ILO) fundamental conventions. Under Seychellois law, all workers, with the exception of police, military, prison, and firefighting personnel, have the right to form and organize unions of their own choosing, to participate in collective bargaining, and to conduct legal strikes. However, such right is limited or restricted by other provisions of law. Although collective bargaining is legal it rarely happens because the law gives the right to the government to review and approve all collective bargaining agreements in both the private and public sector. Strikes are illegal in Seychelles unless all other arbitration procedures have been exhausted. Furthermore, the Public Order Act of 2014 restricted gatherings of more than one person without permission from the Seychelles Police. That law was ruled unconstitutional by the Seychelles Constitutional Court, and the GOS subsequently repealed it. In October 2015 the GOS passed the Public Assembly Bill which requires public assemblies of ten or more people to provide advance notice to the Seychelles Police, but police permission for the assembly is no longer required.

Seychelles has a government-mandated minimum wage of SCR 5,050 (USD 380) per month based on a 35-hour work week. In the event of layoffs where there is no employee misconduct, the employer must provide the worker with one month’s notice or the equivalent of one month’s salary. Additionally, for workers that have been employed for five years or more, the employer is obligated to pay a day’s pay for each month that the employee has worked for the employer. There is no distinction between layoffs and firing with severance.

The government of Seychelles introduced the Occupational Safety and Health Decree in 2012 and the Prohibition of Trafficking in Persons Act in 2014. Seychelles Police and customs personnel have traveled to USG-led training at the International Law Enforcement Academy in Gaborone, Botswana. However, there are very few health or labor inspectors in Seychelles and they are limited by meager public resources and the vast ocean distances they are expected to cover.

In November 2011, Seychelles and the ILO signed the 2011-2015 Decent Work Country Program, which seeks to address such issues as employment creation, consolidation and protection of workers’ rights, enhancing social protection, and strengthening social dialogue. In May 2014, the Ministry of Labor and Human Resource Development issued new guidelines for the recruitment of foreign nationals. The guidelines, which provide for a quota system for various sectors of the economy, are available at http://www.employment.gov.sc/phocadownload/guideline.pdf. The Embassy is not aware of any gaps in compliance with international labor standards that may pose a reputational risk to investors.

16. Foreign Trade Zones/Free Ports/Trade FacilitationShare    

The Seychelles International Trade Zone (SITZ) Act of 1995 provides for the establishment of international trade zones, which aim to combine the benefits of a free port and an export processing zone. So far a number of locations have been declared International Trade Zones. A wide range of business activities is permissible provided they are export-oriented.

The concessions available to license holders in SITZ include the following:

  • Exemption from customs duties on capital equipment to be used in SITZ;
  • Exemption from Business Tax, Trades Tax and Withholding Tax;
  • Exemption from social security contributions;
  • Exemption from fees with respect to work permits;
  • Entitlement to full foreign ownership.

The activities of the SITZ are regulated by the Seychelles Financial Services Authority, formerly known as the Seychelles International Business Authority. Foreign-owned firms benefit from the same incentives as local firms operating in the SITZ.

17. Foreign Direct Investment and Foreign Portfolio Investment StatisticsShare    

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

 

Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data

Year

Amount

Year

Amount

 

Host Country Gross Domestic Product (GDP) ($M USD)

2014

$1,030

2015

$1,375

http://www.imf.org/external/ns/cs.aspx?id=28

Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)

2014

N/A

2014

N/A

No data available

Host country’s FDI in the United States ($M USD, stock positions)

2014

N/A

2014

N/A

No data available

Total inbound stock of FDI as % host GDP

2014

N/A

2014

180.8%

http://unctad.org/sections/dite_dir/
docs/wir2015/wir15_fs_sc_en.pdf

*Seychelles National Bureau of Statistics

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data 2014

From Top Five Sources/To Top Five Destinations (US Dollars, Millions)

Inward Direct Investment

Outward Direct Investment

Total Inward

934

100%

Total Outward

N/A

100%

Mauritius

339

36

Country #1

N/A

X%

Cyprus

199

21

Country #2

N/A

X%

Russian Federation

120

13

Country #3

N/A

X%

U.K.

47

5

Country #4

N/A

X%

British Virgin Isles

41

4

Country #5

N/A

X%

"0" reflects amounts rounded to +/- USD 500,000.

Outward Direct Investment data for Seychelles are not available

Table 4: Sources of Portfolio Investment

Portfolio investment data for Seychelles are not available

18. Contact for More InformationShare    

Paul Gormley
Economic/Commercial Officer
4th Floor, Rogers House, John Kennedy Ave, Port Louis, Mauritius
+230 202 4465
GormleyPJ@state.gov