New Legislation in Seychelles

Seychelles has long been a popular jurisdiction for international business, known for its relatively straightforward company formation and attractive tax regime. However, recent changes in legislation are impacting companies operating in or considering Seychelles. This article breaks down the key aspects of New Legislation in Seychelles and what it means for companies, beneficial owners, and officers.

Key Changes and Requirements:

The New Legislation in Seychelles primarily focuses on enhancing transparency and aligning with international standards for combating money laundering and tax evasion. This translates into stricter requirements in several key areas:

• Enhanced Due Diligence: Companies can expect more rigorous due diligence procedures during incorporation and ongoing operations. This includes providing comprehensive information about the company’s activities, source of funds, and intended purpose.

• Beneficial Ownership Disclosure: The New Legislation in Seychelles places a strong emphasis on identifying and verifying beneficial owners. Companies are now required to maintain accurate and up-to-date registers of beneficial owners and make this information accessible to relevant authorities. The definition of “beneficial owner” has also been clarified and broadened, encompassing individuals who ultimately own or control the company, even through complex ownership structures.

• Officer Responsibilities: Directors and officers of Seychelles companies face increased responsibilities under the New Legislation in Seychelles. They are now held accountable for ensuring compliance with all applicable laws and regulations, including those related to anti-money laundering and counter-terrorism financing. Failure to comply can result in significant penalties.

• Economic Substance Requirements: While Seychelles has had economic substance requirements in place, the New Legislation in Seychelles may further refine or strengthen these requirements. Companies need to demonstrate that they have adequate substance in Seychelles, including physical presence, qualified personnel, and genuine business activities.

Impact on Tax Optimization:

The New Legislation in Seychelles undoubtedly impacts the landscape of tax optimization. While Seychelles may still offer certain tax advantages, the increased transparency and compliance requirements mean that companies can no longer rely on purely nominal structures.

• Reduced Anonymity: The enhanced disclosure requirements significantly reduce the anonymity previously associated with Seychelles companies. This makes it more difficult to use Seychelles for aggressive tax avoidance strategies.

• Focus on Genuine Business Activities: The emphasis on economic substance means that companies must demonstrate genuine business activities in Seychelles to benefit from any tax advantages. Shell companies with no real operations are unlikely to be viable under the new regime.

• Increased Compliance Costs: The stricter compliance requirements will likely lead to increased costs for companies operating in Seychelles. This includes the cost of maintaining accurate records, conducting due diligence, and seeking professional advice.

Is Seychelles Still a Good Option?

Despite the changes, Seychelles can still be a viable jurisdiction for international business, particularly for companies seeking a stable and reputable environment. However, it’s crucial to understand the New Legislation in Seychelles and ensure full compliance.

Key Considerations:

• Transparency is Key: Embrace transparency and ensure that all information provided to authorities is accurate and up-to-date.
• Substance Matters: Focus on establishing genuine business activities in Seychelles to meet economic substance requirements.
• Seek Professional Advice: Consult with legal and tax professionals to navigate the complexities of the new legislation and ensure compliance.

The New Legislation in Seychelles represents a significant shift towards greater transparency and compliance. While it may impact tax optimization strategies, Seychelles can still be a valuable jurisdiction for businesses that prioritize transparency, substance, and compliance with international standards. Companies considering Seychelles should carefully assess the new requirements and seek professional guidance to ensure they are fully compliant.