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Executive Summary

Seychelles is an island nation located off the eastern coast of Africa in the Indian Ocean with a population of 95,800.  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 hub. Although the World Bank has designated Seychelles as a “high income” country, its wealth is not evenly distributed.  According to the United Nations Development Program’s Human Development Report for 2016, Seychelles has a Gini coefficient of 46.8, indicating a high level of income inequality.

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 debt contributed to persistent foreign exchange shortages and slow growth that plagued Seychelles through the first decade of nthe 21st century.  After defaulting on interest payments due on a USD 230 million bond in 2008, the Government of Seychelles (GOS) turned to the International Monetary Fund (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.  As a result, the country has experienced economic growth, lower inflation, a stabilized exchange rate, declining public debt, and increased international reserves.

According to the Central Bank of Seychelles, real GDP grew by 4.1 percent in 2018, down from 4.3 percent in 2017.  The IMF forecasts slower growth of 3.4 percent in 2019. Drivers of economic growth include fisheries, tourism, and construction.  However, heavy reliance on the tourism industry makes the overall economy vulnerable to external shocks that can affect the European, Middle Eastern, and Asian countries from which most tourists travel.

Despite GOS attempts to diversify the economy, it remains focused on fishing and tourism.  Seychelles’ vast Exclusive Economic Zone (EEZ), which spans 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. companies.  Seychelles also has a small but growing offshore financial sector. There is also potential 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, though the Seychelles Investment Act and related regulations restrict foreign investment in a number of sectors where local businesses are active, including artisanal fishing, small boat charters, taxi driving, and scuba dive instruction.  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. Indeed, Seychelles puts a premium on maintaining its unique ecosystems and screens all potential investment projects to ensure that any economic, social or industrial benefits will not compromise the country’s international reputation for environmental stewardship.

Politically, Seychelles’ first multiparty presidential election was held in 1993, after the adoption of a new constitution.  In September 2016, the opposition coalition Linyon Demokratik Seselwa (made up of the four opposition parties: the Seychelles National Party, the Seychelles Party for Social Justice and Democracy, the Lalyans Seselwa, and the Seychelles United Party) won the legislative elections for the first time.  Before the elections, the ruling Parti Lepep (now also called United Seychelles) held all 25 directly elected seats in the national assembly and an additional seven proportionate seats, leaving just one seat for the opposition. Currently, and for the first time since the return of multi-party democracy in 1993, Parti Lepep (United Seychelles) does not have a parliamentary majority, holding only 14 of 33 seats.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 28 of 180 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2019 96 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2015 65 of 141 https://www.globalinnovationindex.org/analysis-indicator (Ranking not available for 2016-2018)
U.S. FDI in partner country ($M USD, stock positions) 2018 N/A http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2017 $14,170 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Seychelles has a favorable attitude toward most foreign direct investment, though the GOS reserves certain types of business activities for domestic investors only.  The Seychelles Investment (Economic Activities) Regulations provide a detailed list of 65 types of business in which only Seychellois may invest, available here: https://www.investinseychelles.com/component/edocman/si-71-seychelles-investment-economic-activities/download?Itemid=0  .  The Seychelles Investment Board (SIB) is the national single gateway agency for the promotion and facilitation of investment in Seychelles.  The government’s objective is to promote economic and commercial relationships to diversify the economy, as well as to sustain its tourism and fishing industries, which are currently the main drivers of economic growth.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Seychelles Investment Act of 2010 and Seychelles Investment (Economic Activities) Regulations 2014 govern foreign direct investment (FDI) in Seychelles and are available at:  https://www.investinseychelles.com/investors-guide/policies-guidelines-acts  .  Since the financial crisis of 2008 and the implementation of subsequent IMF reforms, Seychelles has successfully attracted FDI.  According to the Central Bank of Seychelles, gross FDI inflows in 2018 amounted to USD 102 million, down from USD 129 million in 2017.  The Seychelles Investment Board (SIB), the investment promotion agency for Seychelles, advises foreign investors on the laws, regulations, and procedures for their activities in Seychelles.

The Seychelles Investment (Economic Activities) Regulations of 2014 list the economic activities in which only Seychellois are allowed to invest.  Seychelles also places financial limits on foreign equity in certain types of resident companies – these limits are detailed in the Seychelles Investment (Economic Activities) Regulations 2014.  While SIB and the government of Seychelles encourage foreign investors to collaborate with a local partner, there is no formal requirement.

SIB also assists in screening potential investment projects in cooperation with other government agencies.  For a business to operate, investors need to apply for a license from the Seychelles Licensing Authority. 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 in the Seychelles Investment Act 2010.

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 April 2015.

Business Facilitation

The Government has committed to improving the business environment through measures such as using public-private partnerships (PPPs) to upgrade the country’s infrastructure.  The Government announced a draft PPP law in 2018; as of mid-2019, the National Assembly had not yet voted on the measure. In his 2018 budget speech, the Minister of Finance announced that the Customs Department will be restructured to modernize its activities and facilitate trade.  Seychelles has reviewed its Customs Management Tariff Classification of Goods Regulations and adopted the 2017 version of the Harmonized System of classification in 2018.

Seychelles is ranked 96th in the World Bank’s 2019 Ease of Doing Business Report.  On average, it takes eight days to obtain a certificate of incorporation and 14 days to obtain a business license.  Details on starting a business in Seychelles are available on the World Bank website: http://www.doingbusiness.org/data/exploreeconomies/seychelles.

Information on registering a business in Seychelles can be obtained on the SIB website:   https://www.investinseychelles.com/investors-guide/start-your-business.  Companies, including foreign ones, can register online through the business registration portal:  http://www.sqa.sc/BizRegistration/WebBusinessRegsitration.aspx  .

The Enterprise Seychelles Agency (ESA) is responsible for providing business development services to improve the performance of micro, small, and medium enterprises in Seychelles.  Services provided by ESA include business planning, training, marketing expertise, and identification of business opportunities for SMEs.

Outward Investment

The GOS does not promote or incentivize outward investment.  However, it does not restrict local investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Currently, the United States and Seychelles do not have a bilateral investment agreement.  However, the United States 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.  Seychelles has Bilateral Investment Treaties (BITs) with China, Cyprus, Egypt, and France, though only the two with Cyprus and France are currently in force: https://investmentpolicyhub.unctad.org/IIA/CountryBits/188#iiaInnerMenu  .

Seychelles became the 161st World Trade Organization (WTO) member in April 2015.  Seychelles is a member of the following trade blocs: the Common Market for Eastern and Southern Africa (COMESA), the European Union-Eastern and Southern Africa States Interim Economic Partnership Agreement (iEPA), the Indian Ocean Commission (IOC), the Southern African Development Community (SADC), and the African Continental Free Trade Area, the last of which entered into force in May 2019.  In January 2019, Seychelles was one of four Eastern and Southern African (ESA) countries to sign the UK-ESA Economic Partnership Agreement, which will preserve trade preferences currently enjoyed under the iEPA in the event the UK leaves the European Union.

As of mid-2019, there is no bilateral taxation treaty between the United States and Seychelles.

Seychelles has signed Tax Information Exchange Agreements (TIEAs) with the following countries:  Denmark, Faroe Islands, Finland, Greenland, Guernsey, Iceland, India, Netherlands, Norway, Sweden and the Swiss Confederation.

Seychelles has signed a total of 28 Double Taxation Avoidance Agreements (DTAAs) with the following countries:  Bahrain, Barbados, Belgium, Bermuda, Botswana, China, Cyprus, Ethiopia, Guernsey, Indonesia, Isle of Man, Jersey, Kenya, Luxembourg, Malaysia, Mauritius, Monaco, Oman, Qatar, San Marino, Singapore, South Africa, Sri Lanka, Swaziland, Thailand, United Arab Emirates, Vietnam, and Zambia.  Updated information on TIEAs and DTAAs can be accessed here: https://www.src.gov.sc/pages/resources/dtas.aspx  .

3. Legal Regime

Transparency of the Regulatory System

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.  However, following the last election in 2016, the new government, pressed by the opposition majority in Parliament, has taken a number of measures to combat corruption and nepotism.  For example, an Anti-Corruption Commission has been set up, the Auditor General’s Office has begun more frequently publishing special audits of questionable government transactions, and the President has appointed opposition supporters to positions such as Ombudsperson.

In an attempt to promote transparency in the public procurement system, Seychelles’ National Tender Board publishes all tenders both on its website (http://www.ntb.sc  ) and in local newspapers.  It publicizes contracts that have been awarded and includes the name of successful bidders and bid amounts.  The government has also set up a Procurement Oversight Unit (POU), which serves as a public procurement policy and monitoring body (http://www.pou.gov.sc/  ).

During the September 2016 parliamentary elections, the opposition alliance won a majority in the National Assembly for the first time in 40 years, resulting in significant procedural changes.  In 2017 there was considerably more legislative debate about the 2017 budget than in prior years. Similarly, in preparation for the 2017, 2018, and 2019 budgets, a series of focus group discussions were held with stakeholders such as the business community and NGOs.

Proposed laws and regulations, as well as final laws, are published in the Official Gazette on a monthly basis.  Regulatory transparency has improved with the new administration which has proposed a number of new laws, including a Freedom of Information Act.  Additionally, Ministries are now required to submit white papers and consult with stakeholders before legislation is adopted.

Seychelles’ budget is easily accessible to the general public: http://www.finance.gov.sc/national-budget/25/  .  Budget documents, including the executive budget proposal and the enacted budget, provide a substantially full picture of Seychelles’ planned expenditures and revenue streams.  Publicly available budgets included expenditures broken down by ministry and revenues broken down by source and type. Information on debt obligations is also readily available. In 2019, for the first time, the government included a fiscal risk statement, which identified substantial fiscal risks emanating from public enterprises in Seychelles.  Details on explicit and contingent liabilities are available in the fiscal risk statement, which is available on the following link: http://www.finance.gov.sc/uploads/national_budget/Fiscal%20Risk%20Statement%202019.pdf .

International Regulatory Considerations

Seychelles has signed trade agreements with regional blocs such as the Common Market for Southern and Eastern Africa (COMESA), Southern African Development Community (SADC) and the Interim Economic Partnership Agreement with the European Union (iEPA).  Seychelles has also signed the Tripartite Free Trade Agreement (TFTA) and the Continental Free Trade Agreement (CFTA), which will enter into force once the required number of ratifications are deposited. In January 2019, four Eastern and Southern African (ESA) countries including Seychelles signed the UK-ESA Economic Partnership Agreement, which would safeguard trade preferences currently enjoyed under iEPA in the event the UK leaves the European Union.

Seychelles joined the WTO in 2015, becoming the 161st member.  Seychelles does notify draft technical regulations to the WTO Committee on Technical Barriers to Trade.  In 2016, Seychelles ratified the Trade Facilitation Agreement (TFA) and has notified regarding their Category A, B, and C commitments.

Legal System and Judicial Independence

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 and criminal laws are based on British law. In both civil and criminal matters, the procedural rules derive from British law.  Under the current government, the perception among Seychellois is that the judiciary is no longer influenced by the executive. 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 129th out of 190 countries in enforcing contracts in its 2019 Ease of Doing Business Report.

Laws and Regulations on Foreign Direct Investment

The Government of Seychelles (GOS) established the Seychelles Investment Board (SIB) (https://www.investinseychelles.com/  ) 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 facilitate the investment process within the country’s 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 (http://www.sla.gov.sc/  ).  The Embassy has received no negative 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.

Competition and Anti-Trust Laws

The SIB only reviews competition cases initiated by other government authorities, private sector entities, or investors.  Current legislation does not empower SIB to sua sponte review all transactions for competition related concerns.

Expropriation and Compensation

The Lands Acquisition Act 1978, last amended in 1990, states that when the government takes possession of property, it must 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 1993, the GOS compensated some of those who had lost land to expropriation/redistribution in the late 1970s. The Embassy does not anticipate major expropriations in the near future, nor is it aware of any pattern of discrimination against U.S. persons.

Dispute Settlement

ICSID Convention and New York Convention

In 1978, Seychelles joined 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).

Investor-State Dispute Settlement

The Embassy is aware of at least one investor-government dispute in the reporting period.  Parties involved in investment disputes are encouraged to resolve their disputes through arbitration and negotiation.  The Seychelles Investment Act 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 2019 Ease of Doing Business Report, Seychelles ranked 110th out of 190 countries for protecting minority investors.

International Commercial Arbitration and Foreign Courts

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.

Bankruptcy Regulations

Bankruptcy in Seychelles is governed under the Insolvency Act of 2013 (https://www.seylii.org/sc/legislation/act/2013/4  ).  According to the Act, an individual may be discharged from bankruptcy three years from the date of its declaration.  Bankruptcy is not criminalized in Seychelles. According to the 2019 World Bank Doing Business Report, Seychelles ranks 73rd out of 190 countries on the resolving insolvency index.  It takes on average two years to complete a bankruptcy.

4. Industrial Policies

Investment Incentives

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

The Seychelles Investment Board (SIB) has the mandate to promote investment in Seychelles and assists in screening potential investments.  In 2018, the GOS announced an investment policy guided by the following principles: (i) creation of a conducive and transparent environment to attract investment and operate business; (ii) modernization of the legal framework for investment; (iii) application of international best practices and standards for investment; and (iv) respect for the environment and sociocultural fabric of the country.  The investment policy statement is available on the following link: https://www.investinseychelles.com/downloads/investment-policy/seychelles-investment-policy/download  .

According to the SIB, the government does not issue investment guarantees, but Seychelles’ Public Private Partnership framework allows public and private sector entities to jointly finance foreign direct investment projects.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Seychelles International Trade Zone (SITZ) Act of 1995  provides for the establishment of free trade zones, which aim to combine the benefits of a freeport and an export processing zone.  A number of locations have been declared International Trade Zones under this regime. Updated in 2018, the list of concessions available to SITZ license holders includes the following:

  • Exemption from customs duties on certain capital equipment to be used in the SITZ;
  • Exemption from certain taxes;
  • Exemption from fees with respect to work permits;
  • Entitlement to full foreign ownership;
  • Entitlement to employ 100 percent foreign labor

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. In order to meet the requirements of the Base Erosion and Profit Shifting (BEPS) standard of the Organization for Economic Cooperation and Development (OECD), licensable export services activities under the International Trade Zone Act have been amended.  Under the revised regime, the holder of an export services license will not be allowed to provide services other than repair and reconditioning of goods, warehousing and rental of storage space, or logistical services, provided that these activities relate to goods physically handled in the zone in Seychelles.

Export services operators licensed on or before October 16, 2017 will still enjoy all concessions and exemptions accorded under the International Trade Zone Act until June 30, 2021, provided that the benefits do not extend to assets or activities introduced on or after October 17, 2017.

Performance and Data Localization 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 approvals granted.  This includes the responsibility of the investor for accuracy and truthfulness in materials submitted in investment proposals and registration;
  • 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; and
  • To carry out the provisions of the employment laws and regulations.

Seychelles does not have a single comprehensive law that addresses the collection and use of personal data.  The Data Protection Act (DPA) was enacted in 2003 to provide individuals with privacy rights regarding processing of their personal data, but as of mid-2019 it has not entered into force.  Other sectoral laws that include data protection provisions are: Civil Code of Seychelles (1976), Computer Misuse Act (1998), Electronic Transactions Act (2001), Financial Institutions Act (2004), Central Bank of Seychelles Act (2004), Anti-Money Laundering Act (2006), Financial Services Authority Act (2013), Anti-Corruption Act (2016), and International Business Companies Act (2016).

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.

The Embassy is not aware of any investment performance requirements.

5. Protection of Property Rights

Real Property

The courts enforce interests in real property.  Mortgages and liens are enforced and the land registrar resolves land disputes.  All lands in Seychelles are either publicly or privately held. According to the World Bank’s 2019 Doing Business Report, Seychelles ranked 62nd out of 190 countries in the Registering Property index.  In 2014, the GOS discontinued selling state land to non-Seychellois.

Beginning April 2019, a tax of 0.25 percent will be charged on the capital improved value of residential property owned by all foreigners.

Intellectual Property Rights

The GOS has measures in place to enforce intellectual property (IP) rights.  Seychelles joined the World Intellectual Property Organization (WIPO) in March 2000.  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 2017, the Cabinet established a National Intellectual Property Committee to serve as a coordinating body for consultations with stakeholders on IP matters.  The Committee, which falls under the purview of the Trade division of the Ministry of Finance, Trade and Economic Planning, comprises representatives from government, non-governmental organizations, and the private sector. In the 2018 budget speech, the Minister of Finance announced that that Government will develop a modernized Intellectual Property Office that will serve as a “one stop shop” for IP issues.  The IP office is expected to be fully operational by late 2019. The Cabinet of Ministers has also approved plans for Seychelles to accede to the Madrid Convention.

The Copyright Act 2014 and the Industrial Property Act 2014 contain provisions that set forth the laws relating to infringement of IP rights.  As required of WTO members, the Seychelles is party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and its IP law treats foreign nationals and Seychellois citizens equally.  Enforcement of IP 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 available, the Seychelles Revenue Commission’s customs officials monitor incoming shipments for counterfeit goods.  However, their focus is on counterfeit products that pose a public health risk, such as medications and electrical appliances. Counterfeit apparel, CDs, and DVDs are widely available in Seychelles markets.

Seychelles is not included on the U.S. Trade Representative’s 2019 Special 301 Report or in the Notorious Markets List.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Embassy Contact for IPR:

Smita Bheenick
Economic/Commercial Specialist
U.S. Embassy Port Louis, Mauritius
+230 202 4430
bheenicks@state.gov

Some Law Firms in Seychelles also handling IPR:*

KAREN DOMINGUE
Room 8, Trinity House
Huteau Lane 41
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Seychelles
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icsey@sechelles.net

A.G. AMESBURY
Room 104, Premier Building
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ANTONY G. DERJACQUES
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FRANK ALLY LAW CHAMBERS
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*List for convenience only, not intended to imply endorsement by the U.S. Government.

6. Financial Sector

Capital Markets and Portfolio Investment

Seychelles welcomes foreign portfolio investment.  The Seychelles Securities Act (https://www.fsaseychelles.sc/images/files/Securities%20Act%202007.pdf) provides the legal framework for the Seychelles stock market.  The Seychelles Securities Exchange, owned by South Africa’s Quote Africa Group, has operated since 2012.  The exchange is also known as Trop-X or MERJ. Listing and trading are available in U.S. Dollars, Euros, Pounds Sterling, Seychelles Rupees, and South African Rand.  Leadership at the exchange are reportedly considering whether to support crypto-assets and instruments issued on blockchain platforms. Portfolio investment in Seychelles is limited by the small size of the economy and banking sector.  The buying and selling of sizeable positions may have an outsized impact on the Seychelles Rupee and the economy in general. There are no restrictions on trading by foreigners. By the end of 2018, the shares of 27 companies were listed on the three equities boards of Trop-X and total market capitalization amounted to USD 282 million.  Trop-X is also a partner exchange of the Sustainable Stock Exchanges Initiative.

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 transactions.  Foreign investors are able to obtain credit on the local market and through the Seychelles banking system, and a variety of credit instruments are available to both local and foreign investors.

Money and Banking System

Seychelles has a two-tier banking system that separates the central and commercial bank functions and roles.  Commercial banks, both domestic and foreign, are regulated and supervised by the Central Bank of Seychelles (CBS).  According to the Central Bank of Seychelles Act 2004, the CBS is responsible for the formulation and implementation of 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.

As of mid-2019, there were seven commercial banks in operation:  Bank of Baroda, Barclays Bank, Mauritius Commercial Bank (Seychelles), Nouvobanq, Seychelles Commercial Bank, Al Salam Bank Seychelles Ltd, and Bank of Ceylon.  SBM Bank (Seychelles) received its banking license in December 2016 but has not yet commenced operations. According to a 2016 report by the Central Bank of Seychelles, 94 percent of Seychellois use banks.  Seychelles also has three non-banking financial institutions: the Seychelles Credit Union, a savings and credit cooperative society; the Development Bank of Seychelles, which provides flexible financing for businesses and projects to promote economic growth and employment; and the Housing Finance Corporation, a government-owned company that provides financing to Seychellois for the purchase of land, the construction of homes, and financing home improvements.

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.  The Seychelles banking sector is generally healthy, though it is limited by small size and reliance on correspondent bank relationships. Due to concerns about money-laundering and illicit finance in the Seychellois financial sector, some local banks have lost their correspondent bank relationship with foreign banks, a phenomenon known as de-risking, making it difficult for local banks to perform international transactions.  In 2017, the Central Bank and the Financial Services Authority visited foreign financial centers to address de-risking. The government is actively working with international experts, including the World Bank and International Monetary Fund, to ensure Seychelles is not perceived as high risk jurisdiction. According to the Central Bank of Seychelles’ Annual Report 2018, a policy paper for amendments to the Anti-Money Laundering Act was presented and approved by Cabinet in the last quarter of 2018.  The new Act, which would address deficiencies identified in the most recent Mutual Evaluation Report of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), is expected to be debated by the legislature in 2019. The Board of the Central Bank has also granted approval for the setting up of a dedicated AML/CFT Supervision Unit.

According to the Central Bank, in January 2019 non-performing loans to total gross loans in the Seychelles banking sector stood at 3.5 percent, and foreign currency deposits totaled 7,126 million Seychelles Rupees (USD 508 million).

A wide range of financial services such as checking accounts, savings accounts, loans, transactions in foreign currencies, and foreign currency accounts are available in the banking system.  Foreigners and foreign/offshore firms must establish residency or proof of business registration to obtain a bank account.

Foreign Exchange and Remittances

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 (SCR), which has mostly fluctuated between SCR 12 and SCR 15 to USD 1 over the past five years.  In 2018, the SCR remained fairly stable against the USD with an average exchange rate of SCR 13.9 to USD 1.

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.

Sovereign Wealth Funds

Seychelles does not maintain any sovereign wealth funds.  However, in his State of the Nation address in March 2018, the President said that a law would be presented to the National Assembly later during the year to establish a sovereign wealth fund.  As at March 2019, this had not materialized.

7. State-Owned Enterprises

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 and southern African countries in their efforts to improve the performance of SOEs.

In Seychelles, there are currently 21 state-owned commercial public enterprises,   which have been established using public financial resources.  These government-owned organizations are responsible for the delivery of both commercial and social objectives.  They offer a range of essential services, including electricity, water, roads, seaports, fuel supply, import/export, retail, transport, civil aviation, housing, and tourism.  The government also has shares in a number of enterprises, including Air Seychelles, the Indian Ocean Tuna Company, Seychelles Commercial Bank, and Seychelles Trading Company.  In his 2019 State of the Nation Address, the President announced that the government would inject USD 6 million into Air Seychelles each year for the next five years.

SOEs are generally free to purchase and/or supply goods and services from private sector and foreign firms.  However, there is a growing concern in the business community that SOEs such as the Seychelles Trading Company (STC) have been allowed to exceed their explicit mandate and compete unfairly.  For example, STC has expanded its operations in the retail business with the opening of a hypermarket, a hardware store, and a luxury goods department selling perfumes and designer bags. Most SOEs and parastatal bodies maintain a board of directors and make regular reports to the corresponding Ministry.  The Public Enterprise Monitoring Commission (PEMC), set up in 2013 through the PEMC Act, is an independent institution responsible for monitoring financial, governance, and transparency issues related to public enterprises. Governance and operational assessments of six major SOEs were conducted in 2016 with World Bank assistance.  On this basis, an implementation plan for governance and operational review of public enterprises for the period 2017-2019 was prepared and approved by the Cabinet of Ministers.

Audited financial statements of SOEs are published annually on the PEMC website (https://www.pemc.sc/reports  ).  The GOS has published a Code of Governance for Public Entities to provide guidelines to improve the governance, monitoring and control of public entities in Seychelles.  The Code, which was developed by the PEMC along with other stakeholders, can be accessed on its website: (https://docs.wixstatic.com/ugd/e104cb_683ea8919b7b4f62a7714c8baedaf3a8.pdfhttp://www.pemc.sc/images/downloads/guidelines/Guidelines%20on%20the%20Good%20Governance.pdf).

Privatization Program

In his 2018 budget speech, the Minister of Finance announced that his Ministry will call on private sector investors to enter into public-private partnership initiatives or partial privatization of the following SOEs:  (i) L’Union Estate Company, (ii) Indian Ocean Tuna, (iii) Land Marine Ltd., (iv) European Investment Bank’s shares in Development Bank of Seychelles, and (v) Agence Francaise de Developpement’s shares in Development Bank of Seychelles.  In his March 2018 State of the Nation address, the President announced that 20 percent of the Seychelles Petroleum Corporation would be privatized beginning November 2018, but this decision was later withdrawn. Similar privatization plans were announced in previous years but progress has been slow.  The Embassy is not aware of any other formal legal barriers to foreign investors participating in privatization.

8. Responsible Business Conduct

Seychelles society has a high level of awareness of Corporate Social Responsibility (CSR), especially in environmental protection and social programs, but CSR is generally regarded as a function of government.  Since 2013, the Seychelles Revenue Commission has been collecting a CSR tax of 0.5 percent on monthly turnover for businesses with an annual turnover of SCR 1 million or more. More information on the CSR tax is available via the following link:  https://www.src.gov.sc/pages/csr/csr.aspx  .  Officially, there are no waivers available for foreign investors with regard to labor law, employment rights, consumer protection, or environmental standards.

The Citizens Engagement Platform Seychelles (CEPS), an umbrella organization for Seychelles’ NGOs, provides a list of NGOs active in the country to the Ministry of Finance, which then decides which organizations would benefit most from the CSR tax revenues.  The GOS revised the CSR guidelines in January 2017, with focus on programs linked to social needs. In particular, the following sectors benefit from the CSR fund: environment; health and society; community, youth, sports and arts; and drug rehabilitation and substance abuse.  According to the 2019 budget, all CSR contributions from public enterprises will be used to build an elder care facility.

Seychelles currently has no production in the extractive sector, but international companies have undertaken petroleum exploration activities offshore.  The Extractive Industries Transparency Initiative (EITI) accepted Seychelles as a candidate country in August 2014 and Seychelles’ validation against the standard began in January 2018.  The 2016 EITI annual progress report published in July 2017 can be accessed at: https://eiti.org/document/seychelles-eiti-annual-progress-report-2016  .

9. Corruption

Ruling with transparency and accountability are stated priorities of the current government.  In 2016, the government established the Anti-Corruption Commission of Seychelles (ACCS) under the Anti-Corruption Act, which gives it authority to investigate, detect, and prevent corrupt practices.  The ACCS is now functional and, though small, has carried out a number of investigations. A local chapter of Transparency International, Seychelles Transparency Initiative (TI), was set up in 2017. TI currently has five employees and plans to expand.  Their focus is currently on increasing transparency in three sectors: tourism, finance, and fisheries.

In his March 2018 State of the Nation address, the President stated that the government will review anti-corruption laws and provide more resources to the ACCS so it can fulfill its mandate.  The Anti-Corruption (Amendment) Bill was introduced in Parliament in February 2019 and could be voted on within the year (http://nationalassembly.sc/index.php/2019/02/28/anti-corruption-amendment-bill-2018/  ).

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

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.  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 including members of the National Assembly.  The government does not require private companies to establish internal codes of conduct.

Resources to Report Corruption

Anti-Corruption Commission
May De Silva
Chief Executive Officer
Victoria House, State House Avenue

Victoria, Mahe
Office of the Ombudsperson Nicole Tirant-Gherardi
Room 306, Aarti Chambers, Mont Fleuri, Mahe
+248 225147
ombuds@seychelles.net

10. Political and Security Environment

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 United Seychelles party, formerly known as Parti Lepep, governed Seychelles following the 1977 coup and won every election from the introduction of multi-party democracy in 1993 until 2016, when a coalition of opposition parties won the majority of the National Assembly seats.  Shortly afterward President James Michel resigned in favor of his Vice President, Danny Faure. The current era of divided government, with one party in the Presidency and another in control of the legislature, has so far resulted in political stability.

11. Labor Policies and Practices

The national unemployment rate at the end of the third quarter of 2018 was 3.5 percent, 0.6 percentage points lower than the same period in 2017.  About 59 percent of the unemployed population were male. At 15 percent, the highest unemployment rate was among youth below 25 years of age.

The private sector accounted for 65 percent of formal employment in 2018.  Within the private sector, the largest categories of employment were accommodation and food services activities (19 percent) and construction (12 percent).  Major challenges that persist in the labor market include difficultly recruiting locals for certain jobs and low productivity level.

Seychelles has long been an importer of foreign labor due to its small population and low human resource base.  The Central Bank of Seychelles estimates that the share of foreign labor to total employment in the private sector is 40 percent, with the majority working in the fishing and construction sectors.  Since 2014, a quota system has applied to industries for which demand for foreign labor is high.

Seychelles has been a member of the International Labor Organization (ILO) since 1977 and has ratified all fundamental International Labor Organization (ILO) 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, these rights are 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. About 15 percent of the workforce is unionized.

In January 2019, the President raised the minimum wage to SCR 5,250 (USD 385) per month.  In 2017, the government re-introduced the Unemployment Relief Scheme (URS) for Seychellois aged above 18 and who are dependent on welfare.  As of the second quarter of 2018, there were 428 welfare recipients registered on the URS program, out of which 126 were placed in employment.

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 must 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 Employment Tribunal handles employment disputes for private-sector employees.  The Public Service Appeals Board handles employment disputes for public-sector employees, and the Financial Services Authority deals with employment disputes of workers in the Seychelles International Trade Zone.  The law authorizes the Ministry of Employment, Immigration and Civil Status to establish and enforce employment terms, conditions, and benefits, and workers frequently obtain recourse against their employers through the Ministry or Employment Tribunal.

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 U.S. Government-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.  Compliance with international labor standards has in recent years been sufficient such that business in the country should not pose a reputational risk to investors.  Concerns about trafficking in persons, however, do exist.

12. OPIC and Other Investment Insurance Programs

Seychelles and the United States signed an OPIC investment agreement in 2012, the text of which is available on OPIC’s website (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 limited potential for OPIC programs in Seychelles.  Nevertheless, Seychellois firms and U.S. investors may seek OPIC financing or insurance for joint ventures elsewhere in Africa and Asia.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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) 2017 $1,459 2017 $1,498 www.worldbank.org/en/country   
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A NA  BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Host country’s FDI in the United States ($M USD, stock positions) N/A 2017 0 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Total inbound stock of FDI as % host GDP N/A 2017 196.5% UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

* Source for Host Country Data: Seychelles in Figures, Edition 2018, National Bureau of Statistics, Republic of Seychelles, https://www.nbs.gov.sc/downloads/seychelles-in-figures-2018-edition/download  


Table 3: Sources and Destination of FDI

Direct Investment From/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $838 100% Total Outward Amount 100%
Mauritius $326 39% Data Not Available
Cyprus $161 19%
Russian Federation $115 14%
United Kingdom $44 5%
British Virgin Islands $35 4%
“0” reflects amounts rounded to +/- USD 500,000.


Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Smita Bheenick
Economic and Commercial Specialist
Mauritius
+230 202 4430
BheenickS@state.gov

2019 Investment Climate Statements: Seychelles
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