Seychelles has adopted centralized beneficial ownership register

Seychelles has adopted centralized beneficial ownership register

On 5 March 2020 President and National Assembly of Seychelles have officially enacted Beneficial Ownership Act 2020 (the Act) which establishes centralized beneficial ownership registers with confidential regime of data storage for the first time.

Firstly, it is necessary to mention that the requirements under abovementioned Act are applicable both to legal persons incorporated in Seychelles (as resident companies of any legal form, so IBC companies) and to legal arrangements, such as partnerships, trusts and other similar structures.

Public companies whose securities are listed on securities exchanges licensed under Seychelles Securities Act or licensed in an International Organization of Securities Commissions’ member state are exempt from obligations under the Act.

The Act provides a legal definition of “beneficial owner”, who is deemed to be:

  • natural person (persons) who ultimately own or control a customer of financial institution;
  • natural person (persons) on whose behalf a transaction is being conducted;
  • natural person (persons) who exercise ultimate effective control over a legal person or legal arrangement. As observed, the definition of ownership with respect to share in the capital will be established later by regulations, and currently there is no information whether the share threshold will differ from traditionally applied 25%.

Duties of beneficial owners

Any natural person who is beneficial owner of the company must provide it with the declaration of beneficial ownership (a form which contains registerable information) in 14 calendar days from the date when such person became beneficial owner. In case of changes in registerable information the beneficial owner himself must notify the company in 14 calendar days after the date when such changes take place.

If beneficial owner does not perform his duty to notify legal person or legal arrangement about changes of information from the registers, legal person or legal arrangement is entitled to apply to beneficial owners such measures as restriction of the following rights:

  1. rights to transfer shares or other interest;
  2. voting rights;
  3. rights to acquire additionally issued shares;
  4. rights to payment of the interest in respect of capital of legal person or legal arrangement;
  5. rights to take part in the management of the limited partnership;
  6. benefit to which the owner of the foundation is entitled;
  7. cancellation of the interest in the legal person or the legal arrangement;
  8. other measures.

In addition to this, the intentional provision of false information by beneficial owners will make them liable to a fine in the amount not less than 50 000 Seychelles rupees (approximately 4 000 US dollars) and/or imprisonment for a term not exceeding 1 year.

Duties of companies in relation to registers of beneficial owners

Companies and legal arrangements registered in Seychelles are obliged to identify and verify their beneficial owners, and provide their registered agents with the copy of form with registerable information in 14 calendar days after receipt of information for purposes of including information into the registers.

Seychelles companies and legal arrangements are also obliged to keep the registers in electronic or paper form in the principal place of business of their registered agents. These registers must include the following information:

  1. the name, residential address, service address, date of birth and nationality of each beneficial owner;
  2. details of beneficial interest;
  3. the date on which a person became a beneficial owner;
  4. the date on which a person ceased to be a beneficial owner;
  5. the name, residential address, service address, date of birth and nationality of each nominee member (shareholder).

In case of liquidation of company or legal arrangement the information from registers must be provided to Seychelles competent authorities through registered agents. The information about previous beneficial owners must be kept at least 7 years after the date when such persons ceased to be beneficial owners, and on the expiration of this term it may be deleted from the registers.

If Seychelles companies or legal arrangements fail to maintain the abovementioned information in registers accurate and up to date, they may be liable to a fine up to 50 000 rupees. In some situations directors, councilors or partners of companies or legal arrangements may also be liable to a fine in the same amount in addition to a fine imposed on the company/legal arrangement itself.

Detailed instructions on the submission of registers of beneficial owners to centralized database for companies, legal arrangements and their registered agents will be given by competent authority named Financial Intelligence Unit (FIU) additionally. This competent authority is responsible for development and maintaining of centralized database of beneficial owners.

Centralized beneficial ownership database

Information from beneficial ownership registers, both kept by registered agents of companies and legal arrangements and in centralized database, is confidential and is not subject to public disclosure. The access to centralized database will be granted to the following public authorities of Seychelles:

  1. Anti Corruption Commission of Seychelles;
  2. Central Bank of Seychelles;
  3. Financial Crime Investigation Unit or any other Unit as may be designated by the Commissioner of Police within the Seychelles Police Force;
  4. FIU;
  5. Office of the Attorney General;
  6. Registrar of Associations;
  7. Registrar of Companies;
  8. Seychelles Revenue Commission.

The procedure of granting the access to centralized beneficial ownership database to public authorities mentioned above will be specified additionally by the FIU. At the same time, some of those public authorities are currently entitled to demand the information about beneficial owners of companies and legal arrangements from their registered agents by sending an individual written request (even before establishment of centralized database):

  • FIU or Financial Services Authority;
  • any law enforcement agency;
  • Registrar of Associations;
  • Registrar of Companies;
  • Seychelles Licensing Authority;
  • Central Bank of Seychelles;
  • Courts.  

Apart from these public authorities and beneficial owners themselves, the right to request registered agents to provide the information from beneficial ownership registers is also given to directors and members (shareholders) of companies, councilors, supervisory bodies and founders of foundations, settlors and trustees of trusts, general and limited partners in partnerships.

In line with this, 2 new duties of registered agents arise:

  1. Submission of information from registers of beneficial owners to centralized database, the procedure and terms of which will be communicated additionally. The registered agent which intentionally provides false information to centralized database is liable to a fine in the amount not exceeding 100 000 rupees imposed on registered agent itself, and/or to imprisonment for a term not exceeding 2 years. It is implied that officers of registered agent (e.g. directors) may be subject to such criminal liability, however the current version of the Act does not make any clarifications of this aspect;
  2. Provision of information from registers of beneficial owners demanded by public authorities’ individual request in term specified by such request. Fine for failure to perform this duty in the amount not exceeding 50 000 rupees is to be imposed on the registered agent itself, and if this offence is committed intentionally, the imprisonment for a term not exceeding 2 years can be applied to the officers of registered agent in addition to a fine.

Entering into force

The Act enters into force for Seychelles companies, legal arrangements and registered agents from 31 January 2021. It is expected that some aspects which are not currently regulated by this Act (such as procedure and terms of submission registers of beneficial owners to centralized database by registered agents) will be specified by regulations later, but before the Act enters into force.

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