The Seychelles
- Overview
- The World of Business
- Legal System
- Offshore Legal and Tax Regime
- Forms of Offshore Operation
- Taxation of Foreign Employees of Offshore Operations
- Exchange Control
- Offshore Activities
- Taxation of Offshore Operations
- Privacy
Overview
The Basics
The Seychelles are a group of 115 islands located about 2,000 kilometers east of Africa and north of Madagascar in the Indian Ocean.
As the Seychelles are located outside the cyclone belt, the weather there is stable throughout the year and the average maximum daily temperature is 29 degrees. December and January are characterized by heavy rainfall.
The Seychelles can be broken down into two island groups – the Granitic islands, 32 tightly grouped islands, including the principle island of Mahe, and the Coraline islands, which are widely scattered in between the Granitic group and Madagascar.
The Seychelles is well known for its rich, unspoiled environment that is home to a number of unique species of birds, fish, and flora.
The capital of the Seychelles is Victoria, which is located on the island of Mahe. The deepest port in the Indian Ocean is located in Victoria. Mahe is also home to the international airport. The airport connects the Seychelles with numerous cities in Europe, the Middle East, Africa, Australia, and the Far East.
Of the nearly 82,000 people living in the Seychelles as of 2007, approximately 70,000 live on Mahe. The indigenous population has its roots in Africa, Madagascar, and France. Although a French-based Creole is the language most commonly used in the islands, English, French, and French-based Creole are all official languages. English and French are the languages of business in the country.
The Arabs first became familiar with the islands during the 800s; the Portuguese, French, and English all visited them at later dates. The French had control of the islands until 1814, and at that point the British gained official ownership of the islands. In 1903, the Seychelles became a British colony.
Slavery on the islands was abolished in 1835 with disaster economic consequences. However, things gradually improved over the following 100-year. The islands did not gain their independence until 1976, but they have flourished since then, thanks in large part to their stable government. The population of Seychelles values their environment and nearly half of the islands’ total landmass is set-aside as either national parks or nature reserves.
Government and Economy
The Seychelles is a member of the Commonwealth of Nations and an independent republic. The structure of its government was outline in its constitution of 1979. There is a unicameral People’s Assembly, which is comprised of 34 seats, 25 of whom are elected by popular vote and nine of which are allocated on a proportional basis to political parties that win at least 10% of the vote. Assembly members serve 5-year terms. In 1993 the constitution was amended in order to facilitate a multiparty system following a long period of one-party rule.
A President who is elected for a five-year term heads the Executive branch. The President may serve up to three terms. Until 1996, there was no Vice-President position. The President is responsible for appointing a Cabinet consisting of 13 Ministers.
Historically the legal system is based upon French civil law; however, the majority of modern business and criminal legislation is similar to Anglo-Saxon common law. The Seychelles has magistrates’ courts, a Supreme Court, and a court of appeals.
Seychelles’ economy was originally based on cotton growing but switched over to coconut plantations following the abolition of slavery. Today, Seychelles’ economy is largely based on fishing and tourism. The economy leans heavily towards to the provision of services, with services accounting for 72% of the economy. Meanwhile, tourism is responsible for more than 70% of foreign exchange earnings.
Seychelles’ islands lie on a myriad of international shipping routes so in addition to the 250,000 tourists that arrive by plane annually, many other tourist visit the islands as part of cruises.
The islands’ economy suffered during the first Gulf War but has since rebounded. In recent years economic growth has averaged between 4 and 5 percent. The economic upswing was damaged recently, though, by artificially high exchange rates. Nevertheless, the economy is expected to turn around again and the Central Bank of the Seychelles is predicting economic growth at over 5% from 2007 to 2008. Fortunately, inflation is moderate but the unemployment rate is relatively high at 10%.
After a reverse during the Gulf War, the economy rebounded, with growth averaging 4-5%. However, the artificially high exchange rate has held back tourism, and growth in 2002-2004 averaged only 1.5%. Growth turned negative again in 2005-06, but according to the Seychelles Central Bank, growth in excess of 5% is predicted for 2007 to 2008. Inflation is moderate, at 0.7% in 2006. The public finances are not strong, and a budget surplus of 7% in 2003/2004. Predictions for the long-term health of the Seychelles’ economy are mixed as the damage to the tourism industry from the Asian tsunamis, the 9/11 terrorist attacks on the US, and the war on terrorism is not yet entirely understood.
The Government has made a long-term effort to attract offshore financial services to the islands over the past 20 years. The Government has paid special attention to the banking and insurance industries.
Foreign Affairs
Seychelles is a member of the Southern African Development Community (SADC), the African Union (AU), a member state and observer of La Francophonie, and a member of the Common Wealth of Nations.
Despite the fact that evidence of financial support might be required, short-stay visas are issued freely to tourists upon arrival. It is important to not the Seychelles do not encourage low-budget tourism.
If you wish to stay in the Seychelles for a longer period of time, you will have to either demonstrate adequate financial resources or obtain a Gainful Occupation Permit.
