The Republic of Seychelles plans to bring into force the new International Business Companies Act which was approved by the National Assembly on the 26 of July 2016.
International business companies (IBC) are non-resident (“offshore”) companies that may not run business in Seychelles. Since the enactment of the existing Act of 1994 over 175,000 companies have been registered in Seychelles, 70,000 of which remain active.
According to the Seychelles Financial Services Authority (FSA), the new Act provides the strong (compliant with the OECD and FATF standards) yet still attractive conditions that will allow Seychelles to maintain competitiveness and sustained growth as an International Financial Services Center.
Below you will find the main innovations of the new IBC Act 2016.
1. The list of activities prohibited for IBCs has been extended by adding securities business, mutual funds and gambling. The only exception will be given if such activities are duly licensed under the laws of the country in which an IBC operates.
2. Every IBC will be required to maintain a register of its beneficial owners and to keep it in its registered office in Seychelles (the exemption will be made only for listed IBCs and their subsidiaries).
3. All IBCs will be required to file with the Registrar a copy of their register of directors. A 12-months period from the new Act commencement date will be given for initial filing of a copy of register of directors with the Registrar. The filed registers will be made accessible to public after two years following the Act commencement date.
4. The new Act introduces an unequivocal ban on issuing bearer shares.
5. The first director(s) must be appointed within 9 months of the date of the company’s registration. This requirement is aimed to reduce the number of aged shelf companies.
6. The striking-off process has been reduced from 180 to 90 days.
7. The Act introduces a number of new provisions related to
– Protected Cell Companies,
– reserve directors,
– optional registration of the company’s register of members and beneficial owners,
– optional filing of annual financial statements with the Registrar,
– disqualification of a director by the Court.
8. The fine under the general offence provision and the fine for making false statements to the Registrar have been increased to US$ 50,000. The penalty fee for failure to keep accurate register of members has been increased to US$ 500 plus US$ 50 per day thereafter. Before imposing any penalty fees under the Act the Register will be obliged to give the person concerned an opportunity of being heard.
9. IBCs no longer will be able to
– hold bonds and treasury bills issued by the Government or the Central bank of Seychelles,
– hold a lease of property for use as an office for communication with the members or preparation and maintenance of books and records of the company.
However, a company may own and manage a vessel registered in Seychelles under the Merchant Shipping Act and the vessel may visit or be situated in Seychelles waters provided that the company owning it does not carry on any business in Seychelles (including, without limitation, fishing, charter or tourism business involving the vessel).
10. The IBC search fee has been reduced from US$ 100 to US$ 10.
11. A person aggrieved by a decision of the Registrar may, within 90 days of service of notice of such decision, appeal against the decision to the Appeals Board of the FSA.
The new Act will enter into force from the date defined by the Minister after consultations with the industry in order to give time required to implement the new provisions.