Date added: : 02.12.2016

Dear partners,

On July 26, 2016, the International Business Companies Act 2016 (hereinafter referred to as the "new act") came into effect in connection with the International Forum of the FATF and the ОECD on the Financial Transparency and Information Interaction for Tax Purposes held in the Seychelles. The new act offers a strong and at the same time promising legal and regulatory framework that promotes the development of continuous competitiveness and the stable growth of Seychelles as an international financial services center. Strengthening the legal and regulatory aspects of legislation in order to comply with international standards reflects Seychelles’ commitment to international best practices, especially with regard to international programmes to optimize financial transparency, which positively affects Seychelles' reputation in the eyes of the world community. Since the approval of the International Business Companies Act of 1994, the Seychelles Offshore Companies have a stable success in the non-banking financial services industry.

Despite the success of the 1994 Act, the Seychelles recognized the need to improve the characteristics that favour the attractiveness of offshore companies by providing a solid legislative framework that meets international standards.

Among others, one can observe the following major regulatory changes in the "new act":

  1. The list of prohibited activities for an offshore company has been increased and currently includes: securities transactions, mutual funds, gambling, according to the current Seychelles law, unless the previously mentioned activity is licensed or lawful in accordance with the legislation of that or another country in which an offshore company conducts business
  2. Each offshore company will have to keep a register of beneficial owners in the office of the registration agent in the Seychelles (with the exception of offshore companies and their subsidiaries indicated on the list). Each offshore company (including companies registered before December 1, 2016) will receive a period of 12 months from the date of entry into force of the "new act" (December 1, 2016) in order to comply with the requirements specified earlier. The new procedure will be implemented and presented in the near future.
  3. All offshore companies will be required to file a copy of the register of directors of the company in the Register. All offshore companies registered after the entry into force of the "new act" must submit to the Register a copy of the register of directors within 30 days from the date of appointment of the first director. Each offshore company registered in accordance with the previous act (all companies incorporated before December 1, 2016) will be given a period of 12 months from the date of entry into force of the "new act" (December 1, 2016) in order to file a copy of the register of directors in Register. Only after 2 years from the date of the adoption of the "new act", the filed registers will be publicly available. Subsequently, in case of any changes in the composition of the directors, the company is obliged to submit to the Register a copy of the updated register of directors within 30 days from the day when the changes were accepted. If the company or its director knowingly violates the above provisions, a fine of $ 500 is imposed on both, plus an additional fine of $ 50 for each day during which the violation occurred. In this regard, Law&Trust International introduces a fee of $ 25 for filing a copy of the register of directors in the Register.
  4. In accordance with the "new act", each company must keep the minutes of meetings and resolutions either in its registration office or in the territory of the Seychelles or in any other state, in accordance with the decision of the directors. In the event that a company holds minutes of meetings and resolutions not in its registration office in the Seychelles, it must notify the registration agent in writing of the actual address for the storage of the above documents. A sample of the declaration will be provided shortly.
  5. According to the "new act", the procedure for filing the annual report was changed. In accordance with the "new act", the company should not later than December 31 of each year, after the year in which the company was registered, redomiciled to the Seychelles or transferred to the status of an IBC company, submit to the registration agent an annual report in the form of a declaration. The new order will be implemented in the near future.
  6. Clear regulations have been introduced regarding the prohibition for an offshore company to issue bearer shares.
  7. New regulations also have influence on shelf/ready-made companies. The "new act" prescribes that the first director(s) should be appointed within 9 months from the date of registration of the company.
  8. The "new act" takes measures against companies with segregated portfolios, reserve directors, selective registration of shareholders' register and beneficial owners of the company, selective filing of the annual financial statements in the Register, deprivation of powers of the director through the court.
  9. The fine within the general provision on violations and the fine for filing false information with the Register has been increased to 50,000 US dollars. In accordance with paragraph 3, the fine for failure to maintain a correct register of shareholders was increased to $ 500 and $ 50 for each subsequent day of the violation. A new provision was also introduced to allow each person concerned to be heard before the Registrar imposes a fine on the basis of a provision of the "new act".
  10. Each offshore company is now prohibited from holding bonds, tax bills and securities issued by the government organization of Seychelles or the Central Bank of Seychelles, and will no longer be permitted to rent real estate for an office through which communications with shareholders are made and in which the company's accounting documents are compiled or kept.
  11. According to the "new act", an offshore company has the right to own or manage a vessel registered in the Seychelles under the law on merchant shipping. This vessel may enter the port of Seychelles and remain in Seychelles waters provided that the offshore company for which the vessel is registered does not operate in the Seychelles, in particular fishing, charter or tourist business in which the above vessel is involved.
  12. A person unsatisfied with the Registrar's decision may, within 90 days from the receipt of the notice of the Registry's decision, file an appeal with the Appeals Commission established on the basis of the regulatory act of 2014 of the Office for Regulation of Non-Bank Financial Services.

Law Firm Law&Trust International strives to maintain the maximum quality of customer service, while adhering to international standards of compliance with current legislation and legal norms.

In view of the foregoing, we look forward to your timely support, which will allow us to properly meet the new requirements.

We look forward to receiving your message in case of any questions.