2023 Investment Climate Statements: Seychelles

Policies Towards Foreign Direct Investment

Seychelles has a favorable attitude toward most foreign direct investment, though the government reserves certain types of business activities for domestic investors only. The Reserved Economic Activity Policy, enacted in April 2020, provides a detailed list of the types of business in which only Seychellois may invest and is available here: https://www.investinseychelles.com/component/edocman/reserved-economic-activities-policy-reap-_april-2020/download?Itemid=0 

https://www.gazette.sc/sites/default/files/2022-07/SI%2076%202022%20-%20Seychelles%20Investment%20%28Economic%20Activities%29%20Regulations%202022.pdf .

Some restrictions apply both to domestic and foreign investors, such as the policy forbidding vertical integration in the tourism industry with the objective of protecting local operators, and the moratorium on the construction of large-sized hotels on La Digue, Mahé and Praslin, in place since 2015, to limit mass tourism. In December 2022, the Cabinet of Ministers announced that the moratorium on the construction of new tourism accommodations and change of use, which is in effect since August 2021 on Seychelles’ third-most populated island – La Digue – has been extended to December 2023 and will be further extended beyond this date.

The Seychelles Investment Board (SIB) is the national 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. The SIB periodically organizes sector-specific meetings with investors and hosts a National Business Forum every two years to engage with the private sector.

Limits on Foreign Control and Right to Private Ownership and Establishment

The 2010 Seychelles Investment Act and 2022 Seychelles Investment (Economic Activities) Regulations govern foreign direct investment (FDI) in Seychelles. These documents are available at: https://investinseychelles.com/investors-guide/investor-resources/policies-guidelines-acts 
a https://www.gazette.sc/sites/default/files/2022-07/SI%2076%202022%20-%20Seychelles%20Investment%20%28Economic%20Activities%29%20Regulations%202022.pdf . Since the implementation of IMF reforms after the 2008 financial crisis, Seychelles has successfully attracted FDI. According to the World Bank, net FDI inflows amounted to 111.5 million dollars in 2021, compared to 80 million dollars in 2020. The SIB advises foreign investors on the laws, regulations, and procedures for their activities in Seychelles.

The 2014 Seychelles Investment (Economic Activities) Regulations and the 2020 Reserved Economic Activity Policy list the economic activities in which only citizens can invest. The 2022 Seychelles Investment (Economic Activities) Regulations was enacted in July 2022 to provide more transparency to limitations and restrictions applicable to foreign investors. It revokes the 2014 Seychelles Investment (Economic Activities) Regulations. The new regulations provide a list of economic activities which may be undertaken by a foreign national, as well as a list of activities in which a foreign national may invest jointly with Seychelles national. It also provides that any activity not listed in the regulations, in the Reserved Economic Activity Policy or any other investment regulation shall be subjected to an economic needs test, by the Seychelles Investment Board, taking into consideration the interest of the domestic economy and consumers, and the development of the economic activity in Seychelles. The regulations also place financial limits on foreign equity in certain types of resident companies.

The SIB, in cooperation with other government agencies, also assists in screening potential investment projects. For a business to operate, investors must apply for a license from the Seychelles Licensing Authority. In 2012, the government also established an Investment Appeal Panel to provide a mechanism for investors to challenge the government’s decisions regarding existing or proposed investments in Seychelles. More information is available in the 2010 Seychelles Investment. Act:  https://www.investinseychelles.com/component/edocman/seychelles-investment-act-2010/download?Itemid=0 .

Other Investment Policy Reviews

Seychelles became the 161st World Trade Organization WTO member in April 2015. The first WTO review of the trade policies and practices of Seychelles took place on 5 and 7 December 2022: https://www.wto.org/english/tratop_e/tpr_e/tp533_e.htm . The investment policy review of Seychelles by UNCTAD was published in September 2020:   https://investmentpolicy.unctad.org/publications/1238/investment-policy-review-of-seychelles  . 

To date, Seychelles has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD)

Business Facilitation

The government is committed to improving the business environment through public-private partnerships (PPP) to upgrade the country’s infrastructure. In March 2021, the cabinet of ministers approved the migration from the 2017 version of the harmonized system of classification to the 2022 version. The government is also currently reviewing the 1972 Companies Act.

On average, it takes eight days to obtain a certificate of incorporation and 14 days to obtain a business license.

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 those that are foreign owned, can register business names online through the following portal:  http://www.sqa.sc/BizRegistration/WebBusinessRegsitration.aspx  . However, parts of the registration process, such as payments of fees, still must be completed in person. A full digitalization of the registration process is currently ongoing and is expected to be completed in June 2022.

Since December 2021, applications for business licenses can be completed online at  https://eservice.egov.sc/eGateway/homepage.aspx. In an October 2022 Trade Policy Review Report of the Government of Seychelles indicated that the authorities were currently developing an investment portal, which will serve as a virtual platform for investor information and efficient application. Other actions being undertaken to improve the ease of doing business included updating the Companies Act to allow for digital filing of returns and applications, and the development of a provisional license framework for innovative businesses.

SIB also provides post-investment support in the form of consultancy services regarding the laws, regulations, guidelines, minimum operational standards, and land acquisition. This service is provided free of charge and is available to every investor, regardless of the size or nature of the business.

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 Government of Seychelles does not promote or incentivize outward investment. However, it does not restrict local investors from investing abroad.

Transparency of the Regulatory System

The government has made considerable efforts to liberalize the economy, and to improve the transparency and efficiency of its regulatory system. The 2022 Mo Ibrahim report on governance lists Seychelles as the country with the largest improvement over a 10-year period on areas such as rule of law and justice, anti-corruption, and accountability and transparency. However, the country continues to suffer a lack of transparency in the privatization and allocation of government-owned land and businesses. 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. The board publicizes contracts that have been awarded and includes the names of successful bidders and bid amounts. The government has also set up a Procurement Oversight Unit, which serves as a public procurement policy and monitoring body ( http://www.pou.gov.sc/ ).

In 2022, the government announced that a new electronic ID system has become operational, in line with its digital economy development agenda. It further announced that in 2023, the emphasis will be on interfacing government systems and the private sector through a SEY-ID digital platform. As additional steps towards transparency, in 2022, the Ministry of Finance launched a digital platform for the auction sale of government goods. The minister of finance moreover announced in his 2023 budget speech that the plan for 2023 was to launch a register of all individuals and businesses that participate in government tenders.
A new Public Enterprise bill was enacted in November 2022. This legislation establishes new obligations for public enterprises and will help the Public Enterprise Monitoring Commission (PEMC) be more efficient and rigorous in its supervisory function. The PEMC oversees 32 state-owned enterprises, which have either been established using public financial resources, or of which the government is a significant shareholder.

Following the 2016 election victory of the opposition Seychelles Democratic Union (LDS) in winning a majority in the National Assembly for the first time in 40 years, significant procedural changes were implemented. The government also took several measures to combat corruption and nepotism, including establishing the Anti-Corruption Commission; more frequently publishing special audits by the Auditor General’s Office of questionable government transactions; and appointing opposition supporters to various boards of national organizations and important positions. Since 2017, the government has held budget preparation focus group discussions, including key stakeholders such as the business community and civil society organizations. Additionally, there has been considerably more legislative debate on the annual government budget. Increased budget debate and scrutiny has continued following the October 2020 presidential and legislative elections, in which the LDS won the presidency for the first time in the country’s history, and again won a majority in the National Assembly. Every government agency is called to the National Assembly to answer questions on their proposed budgets, as well as general questions related to their organizations.

Proposed laws and regulations, as well as final laws, are published in the official gazette on a monthly basis and are available online at  https://www.gazette.sc/ . Regulatory transparency improved with the balance of power between the opposition-controlled National Assembly and ruling party-controlled presidency following the 2016 elections. This included several new laws, such as the Freedom of Information Act. In 2018, the access to information law came into force. In 2019, the government appointed a chief executive officer for the Seychelles Information Commission, and appointed information officers in all ministries and departments. The law makes provisions for how citizens may access government information that is not classified as sensitive for security and defense reasons. It also makes provisions for how agencies should respond to requests, mandates proactive disclosure and a duty to assist requestors, and defines information that is deemed classified for security and defense. In 2020, the government also published a manual for using the Freedom of Information Act and accessing information. 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/47 . 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, the government also included a fiscal risk statement, which identified substantial fiscal risks emanating from public enterprises in Seychelles. The statement also contains details on explicit and contingent liabilities, and is available at http://www.finance.gov.sc/uploads/national_budget/Fiscal%20Risk%20Statement%202019.pdf Other measures to improve transparency and accountability announced by the government in 2021 include: (a) a framework for better transparency and justice related to taxes paid by charitable organizations on private sector donations; (b) review of the Income and Non-Monetary Benefits Tax Act to bring more transparency to salaries that are not taxed; (c) implementation of a Results Based Management (RBM) framework to inculcate principles of efficiency, transparency and accountability in public service; and (d) creation of a Public Sector Commission to ensure better transparency and to remove any political agenda in the appointment of senior executives in the public sector.

The Result-Based Management (RBM) framework was officially launched in March 2022. The objective of the new RBM is to increase public sector efficiency in order to create the fiscal space required to deliver national priorities, to enhance transparency in order to strengthen open and accessible government, to maximize public sector effectiveness in order to provide accessible high quality services and improve government performance and to develop a performance driven planning culture system instruments and tools so as to ensure that government delivers its mandate by achieving planned goal objectives and outcomes.
In November 2021, the government also announced the establishment of a high-level domestic regulations (HLDRC) committee to represent the public sector and members of the National Assembly. This committee will discuss ways of improving the transparency and efficiency of licensing administrative procedures, especially with regards to business with foreign investors.

Government also announced in 2023 that the Central Bank is working on the implementation of a new Credit Information System and its accompanying legal framework, with the aim of helping businesses to get information about their clients’ credit worthiness. It also announced reforms to develop capital markets in accordance with international norms.

International Regulatory Considerations

Seychelles has signed trade agreements with regional blocs such as COMESA, SADC, and the EU. Seychelles has also signed the COMESA- East African Community (EAC)-SADC Tripartite Free Trade Agreement (TFTA) and AfCFTA. Seychelles ratified the AfCFTA in June 2021 and announced its withdrawal from the TFTA in September 2021 to focus its resources on the AfCFTA. The AfCFTA started during the TFTA negotiations but moved at a faster pace and covers a larger number of African countries (54), including the 28 countries negotiating the TFTA. In January 2019, four eastern and southern African (ESA) countries, including Seychelles, signed the UK-ESA Economic Partnership Agreement, which safeguards trade preferences currently enjoyed under iEPA post Brexit.

Seychelles joined the WTO in 2015, becoming the 161st member, and underwent its first WTO Trade Policy Review in 2022. Seychelles does notify draft technical regulations to the WTO Committee on Technical Barriers to Trade. In 2016, Seychelles ratified the Trade Facilitation Agreement (TFA). Further details on Seychelles’ TFA notifications to the WTO can be found at  https://tfadatabase.org/members/seychelles . On tariff policy, Seychelles ratified the International Convention on the Harmonized Commodity Description and Coding System in August 2020 making it the 160th Contracting Party to the Harmonized System Convention.  The Customs Management (Tariff and Classification of Goods) Regulations, 2022, was published in October 2022 to enforce the changes introduced under this convention.

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. Seychelles does not maintain a specialized commercial court. Judgments of foreign courts are governed by Section 3 of the Foreign Judgments (Reciprocal Enforcement) Act of 1961. Under the current government, the perception among citizens is that the judiciary is no longer influenced by the executive. In its 2022 budget, the government announced that it will start working with the judiciary to introduce a separate court that will deal specifically with commercial cases.

Laws and Regulations on Foreign Direct Investment

The Government of Seychelles established the SIB (Seychelles Investment Bureau, https://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 investment processes within the country’s administrative and legal framework. The SIB, in cooperation with other government agencies, also assists in screening potential investment projects. It has also implemented a digital customer relations management system to follow up on applications submitted by investors. In 2021, the government announced that it is working on a digital system to integrate functions of all government agencies involved in the administration of online business applications to further improve ease of doing business. In 2022, services which were accessible online included the registration of businesses and associations. The government also announced in 2022 that a new data protection bill will be proposed to the National Assembly in 2023 to make investors more confident about the protection of their personal data.

The government is keen to ensure that business activities are not conducted at the expense of Seychelles’ natural environment. For a business to operate, investors must apply for a license from the Seychelles Licensing Authority http://www.sla.gov.sc/ .

The government established an Investment Appeal Panel in 2012 to provide an appeal mechanism for investors to challenge the government’s decisions regarding investments or proposed investments in Seychelles.

Competition and Antitrust Laws

The SIB only reviews competition cases initiated by other government authorities, private sector entities, or investors. Current legislation does not empower SIB to review on its own accord all transactions for competition-related concerns. The Fair-Trading Commission ( http://ftc.sc/ ) is responsible for investigating competition-related concerns. Such investigations may be initiated by the Commission or may be carried out following a complaint.

A new Communications Bill was published in the Official Gazette in July 2022 to regulate and manage competition in the Information and Communication Technology industry and establish legal provisions to enable consumers to switch operators. Government also announced in 2022 the setting up of a new Communications Regulations Authority to promote fair competition in the telecommunications sector.

Previously, in November 2021, the government announced new measures to promote competition in the financial services sector: (a) modernization of the National Payments System; (b) a new fintech strategy; and (c) the introduction of financial consumer protection legislation, which will give the central bank and financial services authority more power to protect the interests of financial consumers. This new law will likely be complemented by other actions to enhance competition, such as reducing or eliminating costs for switching providers, eliminating abusive practices aimed at keeping customers tied to one particular service provider, and educating the public on its rights.

The Financial Consumer Protection Act 2022 was enacted in April 2022. Moreover, in February 2023, the Central Bank of Seychelles gave its approval for a new payment service provider to operate in the country for provision of e-money services. The Central Bank also announced upcoming new projects as part of its national payment system modernization plan and FinTech strategy, including implementation of a new payment infrastructure to improve the environment for enhanced participation/entrance into the market for digital financial solutions.

Expropriation and Compensation

The 1978 Lands Acquisition Act, last amended in 1990, states that when the government takes possession of property, it must pay prompt and full compensation for the property. The government may expropriate property in cases of public interest or for public safety. Following the 1977 socialist takeover, the government 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 government compensated some of those who had lost land to expropriation/redistribution in the late 1970s. In 2017, Seychelles established the Land Compensation Tribunal to investigate cases where compulsory land acquisition was made by the government without adequate compensation. Citizens whose land was taken by the government from 1977 to 1993 had until December 2020 to make their claims. The Land Compensation Tribunal completed judgments in all its cases in 2021.

The Land Compensation Tribunal also works in close collaboration with the Truth Reconciliation and National Unity Commission (TRNUC), which is investigating cases of human rights abuses prior to and after the 1977 takeover. Illegal land acquisition by the government also formed part of the TRNUC’s mandate. The TRNUC officially completed its mandate in March 2023 when it submitted its final report to the President Wavel Ramkalawan.  The report contains seven volumes, which includes evidence and historical context, legal framework and approach to case determinations, amnesty, reparations, and recommendations. Discussions on compensation are ongoing within the country’s legislative and executive branches.

In October 2021, the Government of Seychelles also introduced a program to return land that was forcibly acquired between 1977 and 1993. This program applies to land acquired through the 1977 Lands Acquisition Act or purchased under a private agreement. The measure is based on the principle that land acquired by the government either compulsorily or through private agreement for a public purpose or in the national interest and which is still undeveloped and not earmarked by the government to be utilized in the public interest or for a public purpose will be considered for return to the original owner or his executor or heir. More information on this is available  here:    https://bit.ly/3IOIGY3 .

U.S. Embassy Port Louis 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 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). In February 2020, Seychelles deposited its instrument of accession to the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which entered into force in May 2020.

Investor-State Dispute Settlement

Seychelles has been a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States since April 1978. Seychelles has signed five bilateral investment treaties (BITs), of which two are currently in force: the 2007 France-Seychelles BIT and the 1998 Cyprus-Seychelles BIT.

U.S. Embassy Port Louis is aware of at least one unresolved investment dispute involving the operation of a large hotel resort by a company with U.S. shareholders.

Parties involved in investment disputes are encouraged to resolve their disputes through arbitration and negotiation. The Seychelles Investment Act created the Investment Appeal Panel to which aggrieved investors may appeal a decision made by a public sector agency regarding their investments or proposed investments in Seychelles. In the event investors are not satisfied with the decision of the Investment Appeal Panel, they may appeal to the Court of Appeal. Seychelles has acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force in May 2020.

International Commercial Arbitration and Foreign Courts

The legal framework for international arbitration exists through the Commercial Code of Seychelles, the Seychelles Code of Civil Procedure, and Seychelles Investment Act. Seychelles has acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force in May 2020. Arbitration legislation in Seychelles is not based on the UNCITRAL Model Law; however, several provisions are compatible with the Model Law. In general, international arbitration is not yet a regular feature of dispute resolution in Seychelles, even though arbitration clauses are used in contracts.
BAnkruptcy regulations

Bankruptcy in Seychelles is governed under the Insolvency Act of 2013 https://seylii.org/akn/sc/act/2013/4/eng@2020-06-01  According to his act, an individual may be discharged from bankruptcy three years from the date of its declaration. Bankruptcy is not criminalized in Seychelles.

Investment Incentives

The Government of Seychelles has enacted legislation which provides incentives for investment in several sectors. Examples include the 2005 Agriculture and 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 who move to Seychelles.

The SIB has the mandate to promote investment in Seychelles and assist in screening potential investments. In 2018, the government announced an investment policy guided by the following principles: creation of a conducive and transparent environment to attract investment and operate business; modernization of the legal framework for investment; application of international best practices and standards for investment; and respect for the environment and sociocultural fabric of the country. The investment policy statement is available at 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.

The government offers tax incentives in the form of value-added tax exemptions on imported goods that (a) conserve, generate or produce renewable or environment friendly energy sources; (b) conserve fresh or potable water resources or re-use or recycle wastewater; and (c) recycle, reduce or re-use solid waste.  The government also provides rebates to businesses that use rooftop photovoltaic equipment for power generation.

In May 2023, the government announced the launching of a Seychelles Investment Map, developed by the Ministry of Investment, Entrepreneurship and Industry and the United Nations Development Programme (UNDP). The map identifies various existing Investment Opportunity Areas (IOAs) and Emerging Investment Opportunity Areas (EIOAs). As of May 2023, the map had identified green power production, eco-tourism development, and agricultural export, along with four other venture possibilities, as investment priorities open to local and foreign investors.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Seychelles International Trade Zone (SITZ) Act of 1995 ( https://fsaseychelles.sc/component/edocman/sitz/legislations?start=0 ) provides for the establishment of free trade zones, which aim to combine the benefits of a freeport and an export processing zone. Multiple locations have been declared international trade zones under this regime. 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.
• Exemption from national labor laws.

Activities of the SITZ are regulated by the Seychelles Financial Services Authority. Foreign-owned firms benefit from the same incentives as local firms operating in the SITZ. 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 export services licensee will not be allowed to provide services other than repair and reconditioning of goods, warehouse, and rent storage space, or to offer logistical services, provided that these activities relate to goods physically handled in the SITZ.

In the 2023 budget announcements, the government announced that permit procedures for imports and exports will become fully digital in 2023. It also announced that the Industry Property Act, and the Trade Remedies Act will be finalized before end of 2023. Seychelles’ first Trade Remedies law once in force will allow Seychelles to take remedial action against injurious imports to its domestic industries through the use of trade policy tools.

Performance And Data Localization Requirements

Investors operating in Seychelles are expected to abide by the following obligations:

• Comply with the provisions of the governing laws on investment procedures and carry out investment activities in accordance with the approvals granted. This includes the responsibility for accuracy and truthfulness in materials submitted in investment proposals and registration.
• Fully discharge their financial obligations, including taxation, in accordance with the law.
• Carry out the provisions of the laws on accounting and auditing.
• Carry out the provisions of the laws on registration of companies and other legal entities.
• 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 March 2021 it has not entered into force. Other sectoral laws that include data protection provisions are: the 1976 Civil Code of Seychelles; the 2001 Electronic Transactions Act; the 2004 Central Bank of Seychelles Act; the 2004 Financial Institutions Act; the 2012 Central Bank of Seychelles (Credit Information System) Regulations; the 2013 Financial Services Authority Act; the 2016 Anti-Corruption Act; the 2016 International Business Companies Act; the 2018 Access to Information Act; the 2020 Anti-Money Laundering and Combating the Financing of Terrorism Act, and the 2021 Cybercrimes and Other Related Crimes Act. The drafting of a new data protection bill was approved by the cabinet of ministers in December 2021 and is currently ongoing.

There is currently no legal requirement obliging foreign IT providers to hand over their source code or provide access to the encryption utilized. Seychelles does not have any legal instrument that prevents or restricts companies from transmitting customer or business-related data outside the country. Consequently, there are currently no government agencies involved in enforcing any rules or regulations with regards to local data storage in Seychelles.

U.S. Embassy Port Louis is not aware of any investment performance requirements.

Real Property

Courts in Seychelles enforce property rights. Mortgages and liens are enforced, and the land registrar resolves land disputes. All lands in Seychelles are either publicly or privately held. In 2014, the government discontinued selling state land to foreign nationals. However, it also announced in the same year a more flexible policy on ownership of land, whereby foreign nationals would be able to buy privately owned land only, provided they meet a number of set criteria and are granted sanction by the Seychelles government. The new policy also stated that foreign nationals purchasing land rights would not be able to purchase state-owned land in Seychelles and are furthermore banned from buying land from the government’s Land Bank Scheme, which is aimed at enabling citizens to obtain a piece of land at a reduced cost.

The policy also makes provision for foreign nationals to obtain a long-term lease for a particular development on state owned land, which applies to all outlying islands of the Indian Ocean archipelago.

The Immovable Property Tax Act, which was enacted in December 2019, introduced an annual tax of 0.25 percent on the assessed market value of immovable property owned by all foreigners. In the 2023 budget speech, the government announced that this tax rate will increase to 0.5 percent as from January 2024.

Intellectual Property Rights

Seychelles is not in the 2022 United States Trade Representative (USTR) Special 301 Report. However, it is cited in the 2022 Notorious Markets List as the country of incorporation for a company listed as a notorious online market.

The Government of Seychelles has measures in place to enforce intellectual property rights (IPR), but awareness of IPR is limited and enforcement is weak. 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. The cabinet of ministers approved plans for Seychelles to accede to the Madrid Protocol. Seychelles also signed the Beijing Treaty on Audiovisual Performances in June 2012 and ratified the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS) to the Convention on Biological Diversity (CBD) in October 2014. Additionally, the cabinet of ministers approved Seychelles’ membership in the African Regional Intellectual Property Organization (ARIPO) by way of acceding to the Harare Protocol on Patents and Industrial Designs.

The 2014 Copyright Act and the 2014 Industrial Property Act, which are the two major laws regarding intellectual property rights, are currently being reviewed, along with their related regulations, with a view to updating them in line with international standards. In the 2023 budget announcements, the government stated that it is working towards finalizing the Copyright Act before end of 2023. The 2014 Customs Management (Border Measures) Regulations provide enforcement measures at the border with respect to counterfeit goods. There is currently no legislation for plant variety protection. As required by WTO principles, Seychelles IP law treats foreign nationals and citizens equally.

Enforcement of IPR protection laws is limited, as very few international brands and trademarks have local or even regional representatives.

In 2017, the cabinet of ministers established the 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, National Planning, and Trade, which comprises representatives from government, non-governmental organizations, and the private sector, meets on a monthly basis. The Registrar General’s Office serves as the one-stop-shop for both copyright and intellectual property.

Chapter 13 of the 2014 Customs Management (Border Measures) Regulations provides for enforcement measures at the border with respect to counterfeit and/or pirated goods. 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’s markets. During 2021, the Customs Division intercepted and seized one consignment of counterfeit goods, mainly counterfeit handbags, shoes, and articles of clothing.

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/  .

Some Law Firms in Seychelles also handling IPR:*

KAREN DOMINGUE
Room 8, Trinity House
Huteau Lane 41
Victoria, Mahe
Seychelles
+248 422 624
3icsey@sechelles.net

A.G. AMESBURY
Room 104, Premier Building
Victoria, Mahe
Seychelles
+248 423 28 41
a.g.amesburyattorney@gmail.com

*List for convenience only, not intended to imply endorsement by the U.S. Government.

Capital Markets and Portfolio Investment

Seychelles welcomes foreign portfolio investment. The Seychelles Securities Act ( https://fsaseychelles.sc/component/edocman/securities-act-2007/download?Itemid=0 ) provides the legal framework for Seychelles’ stock market. The Seychelles securities exchange, now known as MERJ Exchange, has operated since 2012. Listing and trading are available in United States Dollars, Euros, Pounds Sterling, Seychelles Rupees, South African Rand, and Australian Dollars. MERJ is an affiliate of the World Federation of Exchanges, a full member of ANNA and a partner exchange of the Sustainable Stock Exchange Initiative. In 2022, 10 new companies were listed on MERJ Exchange Ltd. By the end of 2022, MERJ reported a total of 52 listings (47 equity and 5 debt listings) with a total market capitalization of $1.28 billion.

SECDEX Exchange Limited is the second exchange licensed by the Seychelles Financial Services Authority in 2020 to operate as a multi-asset securities and derivatives exchange. 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.

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 2004 Central Bank of Seychelles Act, the CBS is responsible for the formulation and implementation of Seychelles’ monetary and exchange rate policies. The CBS is the only administrative body responsible for receiving applications for banking licenses, whether domestic or offshore, and issuing the corresponding licenses.

As of December 2022, there were seven commercial banks in operation: Absa Bank, Bank of Baroda, Mauritius Commercial Bank (Seychelles), Nouvobanq, Seychelles Commercial Bank, Al Salam Bank Seychelles Ltd, and Bank of Ceylon. The Pakistani Bank AL Habib Limited closed its branch in Seychelles in September 2021. Although a new bank was licensed in March 2021, it had not commenced operations in 2022. According to a 2016 report by the CBS, 94 percent of citizens 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 citizens for the purchase of land, the construction of homes, and financing home improvements.

Seychelles has multiple laws that govern the financial services sector, including: the 2004 Financial Institutions Act; the 2004 Prevention of Terrorism Act; the 2004 Central Bank Act; the 2007 Data Protection Act; the 2007 Mutual and Hedge Fund Act; the 2016 International Business Companies Act; the 2020 Anti-Money Laundering and Combating the Financing of Terrorism Act (AML/CFT Act), and the 2020 Beneficial Ownership Act. In the past years, the CBS’s regulatory powers have been expanded with the adoption of the AML/CFT Act.

In 2022, the authorities progressed on updating the legal framework related to financial stability and crisis management. The Financial Consumer Protection Act, aimed at protecting the interests of consumers of financial services and handling related disputes, was approved by the National Assembly in April 2022. Moreover, Cabinet approved a draft policy paper on the Financial Stability Bill in March 2022, while the central bank submitted for Cabinet approval a draft policy paper on the Bank Resolution Bill in October 2022, aimed at improving co-operation mechanisms as well as instruments to deal with evolving types of crises. The U.S. Treasury has been assisting the central bank with this bill. Furthermore, in December 2022, the National Payment System (Electronic Money) Regulations were enacted to provide guidelines to potential investors in the e-money ecosystem, in line with CBS’s payment system modernization plan, its fintech strategy, and the government’s digital economy agency. A project is underway to implement a new credit information system and a credit reporting legislation to provide for broader coverage of credit information and better credit worthiness assessment. The legal framework is expected to be enacted in 2023.

The banking sector is generally healthy, though it is limited by its small size and reliance on correspondent bank relationships. Per the International Monetary Fund, the Seychelles banking system remained adequately capitalized in 2022. Per the CBS, all banks remained well above the prudential capital requirement of 12 percent as at end-July 2022. The central bank adopted a forward-looking monetary policy approach to anchor inflation expectations. However, it remains vigilant to domestic and external developments underlying the inflation outlook, including the impact of foreign inflation. Private credit has been weak due to uneven growth in the economy and the impact of COVID-19, although credit growth to the private sector is expected to pick up in 2023, if stimulated by an effective monetary policy transmission. The central bank has committed to the IMF’s recommendations to strengthen its monetary policy transmission mechanism through a combination of instruments and through developing its money and FX markets.

Due to concerns about money-laundering and illicit finance in the financial sector, some local banks have lost their correspondent banking relationship with foreign banks, a phenomenon known as de-risking, thus making it difficult for local banks to perform international transactions. In 2017, the CBS 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.

In February 2020, the EU added Seychelles to the list of non-cooperative jurisdictions for tax purposes, as Seychelles had not implemented the tax reforms by the mutually agreed deadline of December 2019. In December 2019, France added Seychelles to its blacklist of tax havens for not providing adequate information on French offshore entities operating in the island nation’s jurisdiction. In 2020, the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Act and the Beneficial Ownership (BO) Act. These two pieces of legislation address the deficiencies identified in the 2018 Mutual Evaluation Report of the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG).

The Beneficial Ownership Act (Compliance of Legal Persons and Legal Arrangements) Notice was enacted in September 2021 and the Beneficial Ownership Data Base digital platform, managed by the Financial Intelligence Unit, became operational in November 2021. All domestic registered companies, partnerships and associations are required to comply with the provisions of the 2020 Beneficial Ownership Act by January 31, 2022, to populate the information about their beneficial owners on the Beneficial Ownership Data Base, and to keep an up-to-date register of all their beneficial owners or shareholders.

In December 2021, the National Assembly approved five bills to make the jurisdiction compliant with FATF recommendations: the Anti-Corruption (Amendment No.3) Bill, the Licenses (Amendment) Bill, the Custody, Management and Disposal of Seized, Forfeited or Confiscated Properties Bill, the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill, and the Prevention of Terrorism (Second Amendment) Bill.

The Financial Services Authority (FSA) conducted in 2022 a National Risk Assessment of virtual assets and virtual assets service providers (VA/VASP), in line with FATF’s Recommendation 15. The NRA was published in August 2022 after endorsement by the Cabinet. The NRA concluded that exposure to money laundering/terrorist financing risks in relation to VA/VASP is very high, owing to a lack of regulatory framework. In response, the national committee which worked on the NRA has launched preparation of a policy framework to address the high ML/FT risks from the VA/VASP sector.

Other laws enacted previously during 2021 to upgrade the country’s financial services legal framework include: the Trusts Act, the Foundations (Amendment) Act, the International Service Providers (Amendment) Act, the International Business Companies (Amendment) Act, and the Limited Partnership (Amendment) Act.
In September 2021, the Business Tax (Amendment)(Commencement) Notice and the Business Tax (Amendment of Eleventh Schedule) were also enacted to bring into effect certain changes in Seychelles’ territorial tax system.

As a result of these new laws and amendments, the EU removed Seychelles from Annex I of its list of non-cooperative jurisdictions for tax purposes in October 2021, and moved to Annex II of the list of non-cooperative jurisdictions (the “EU grey list”) for criterion 1.2 (tax transparency). Its removal from Annex II is subject to the positive outcome of a Global Forum supplementary review, which started in October 2022. The draft report of this review will be submitted to the Peer Review Group for consideration and discussion at a meeting scheduled for June 2023. Once this process is completed, the EU Economic and Financial Affairs Council will consider that report to remove Seychelles from the EU grey list for criterion 1.2.

According to the CBS in February 2023, non-performing loans to total gross loans in the banking sector stood at 7.1 percent, and foreign currency deposits totaled 13 billion Seychelles Rupees (approx. $990 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 2008 IMF reform package, the government 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 fluctuated between SCR 12 and SCR 14.5 to $1 from 2015 to 2019. In 2020, the SCR depreciated by 53 percent with the average rate in January 2020 being SCR 14 to $1 compared to SCR 21.5 in December 2020, due to the unprecedented impact of the COVID-19 pandemic on the tourism sector. The average exchange rate gradually appreciated through 2021 and was back to SCR14 to $1 in February 2022 as tourism and other economic activities rebounded in the country.

Remittance Policies

Foreign exchange controls were removed in 2008 and foreign investors are free to repatriate their profits and other incomes. U.S. Embassy Port Louis 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 the 2022 state of the nation address, the president announced that a sovereign wealth fund will be established. This fund had not yet materialized at the time of this report.

Privatization Program

Previous governments had announced privatization plans several times, but these plans did not materialize. U.S. Embassy Port Louis is not aware of any other formal legal barriers to foreign investors participating in privatization.

Climate Issues

According to a UN International Strategy for Disaster Reduction (UNISDR) report, Seychelles is vulnerable to storms, floods, and landslides. The Seychellois Ministry of Agriculture, Climate Change and Environment (MACE) manages key climate policies.  Seychelles’ 2020 National Climate Change Policy created the National Climate Change Council chaired by the vice president to coordinate all climate change actions.  The council must report on the implementation status of all national and international climate change obligations to the cabinet of ministers and the National Assembly.

In November 2021, at the Conference of Parties 26 (COP 26), the Government of Seychelles pledged to reduce its greenhouse gas emissions to 26.4 percent of the business-as-usual scenario 2030 value.  To achieve this target, the government plans to reform in its energy, refrigeration and air conditioning, transport, and waste sectors.  Details of the reforms for each sector will be included in the country’s updated National Climate Change Strategy and the Nationally Determined Contribution (NDC) implementation plan.  Seychelles has a long-term strategy to make its energy supply solely based on renewables as outlined in its 2010-2030 energy policy by focusing on the development of offshore wind and photovoltaic technologies.

The government expects private sector contributions to reform the energy and transport sectors and to develop the aquaculture sector.  While the contributions for the energy and transport sectors will be detailed in upcoming sectoral blueprints, the Ministry of Fisheries and Blue Economy has created an aquaculture department.

The government offers tax incentives in the form of value-added tax exemptions on imported goods that (a) conserve, generate or produce renewable or environment friendly energy sources; (b conserve of fresh or potable water resources or re-use or recycle wastewater; and (c) recycle, reduce or re-use solid waste.  There is a purchase rebate plan to incentivize businesses to resort to rooftop photovoltaic equipment for power generation.

Policies to preserve biodiversity include: (a) regulating coastal planning and infrastructure at the national and local level to prioritize the consideration of “blue” nature-based solutions for climate resilience; (b) protecting at least 50 percent of its seagrass and mangrove ecosystems by 2025, and 100 percent of seagrass and mangrove ecosystems by 2030; (c) establishing a long-term monitoring program for seagrass and mangrove ecosystems by 2025 and including the greenhouse gas sink of Seychelles’ blue carbon ecosystems within the national greenhouse gas inventory by 2025; and (d) committing to the implementation of its adopted marine spatial plan and the effective management of the 30-percent marine-protected areas within the country’s Exclusive Economic Zone.

Public procurement policies in Seychelles do not currently include environmental and green growth considerations such as resource efficiency, pollution abatement, and climate resilience.