The World of Business

The government of the Seychelles has a consistent track record of being business-friendly and interested in supporting the development of the offshore sector. Moreover, the Seychelles are politically stable and have adequate telecommunication and transportation infrastructures to support the establishment of new businesses. Although the country only has a limited number of professional services in comparison with other jurisdictions, the banking and legal facilities they do provide are sufficient.

Generally speaking, the government does not discriminate against foreigners who arrive to the country with serious business purposes. The only special requirement for foreign entrepreneurs is that they need official approval to purchase land. Also, there are certain licensing requirements for trust managers and financial institutions. The legislature provides a decent level of secrecy regarding professional transactions but the Judicial branch can order insist that certain information be disclosed under several international agreements. Also, the Anti-Money Laundering Act of 1996 gives the Central Bank the right to overturn suspect transactions.

In effort to reduce the problem of the growing black market economy, the government amended exchange control and money and trade taxation in 2001. The amendments eliminated legislative loopholes several laws including the Exchange Control Act. Under the new legislation, anyone who possesses any foreign currency must show evidence that it was obtained from a registered dealer. Moreover, buying and selling foreign currency by authorized dealers at rates above the maximum rate or below the minimum rate determined by the Central Bank is prohibited as is the export and import of Seychelles currency notes and coins in excess of R2,000.

The Central Bank of Seychelles announced in 2006 that it expected most of the existing controls on foreign exchange to be removed by the end the year in order to help staunch the flood black market activity and pull money into legal channels.

More recently, President Michel said that that liberalization of foreign exchange remains "a fundamental element" of the government\'s economic reform agenda. "This reform will facilitate economic growth as businesses get more access to financial resources," he said. "Our economy has benefited considerably in the last two years with the implementation of these liberalization policies. There is a rise of local investments and FDI and there has been increasing growth in tourism and fishing."

The Seychelles government is eager to develop a suitable environment for foreign investment. The Investment Promotion Act 1994 legislates incentives for inward investments to approved projects in the domestic and export sectors, including tourism, agriculture, manufacturing and the service industries. The Act also streamlined approval procedures and incentives.

It is possible for further incentives to be obtained from the government in the case of significant investments. These incentives must be negotiated for with the government on a case-by-case basis.

The International Corporate Service Providers Act, 2003, seriously improved and simplified the regime for incoming investment. In the past, the Seychelles International Business Authority (SIBA) had the power to issue a license to offshore businesses, but entitlement to fiscal concessions depended on obtaining a certificate from the Ministry of Finance under the Investment Promotion Act. Under the new Act the procedure for establishing an offshore business was streamlined, thus offshore company owners are no longer required to turn-in a separate IPA application to the Finance Ministry.

The Seychelles Investment Bureau (SIB), a semi-autonomous executive arm of the President\'s Office, was created in 2004 and brings the country’s promotion and facilitation of investments under one umbrella, offering a central point contact for all matters relating to investment in Seychelles. The SIB has been charged with coordinating the development of the Investment Code, an instrument that will allow a more transparent and stable investment environment.

Legal System

The legal system of Seychelles is based on English Common Law, French Civil Law and Local Statute and custom

Generally speaking common law, as opposed to civil or socialist law, is a type of legal system where legislation is continually evolving. Courts refine and create laws on a case-by-case basis. When resolving a legal dispute, in the ideal world, a common law court looks to precedents set by other courts. What this means is that when a court is resolving a dispute, it must look to see if a similar dispute was resolved in the past. If one has, then the present day court is obligated to following the same reasoning used in the prior case; this principle is called stare decisis. On the other hand, if the dispute is totally unique, the court may resolve the matter itself using general guidelines. This new decision then becomes the precedent to which all future cases are bound. Over the years, the precedents created by past decisions coalesce into a complicated set of rules that apply to a wide array of case; this collection of rules is known as “common law”. Of course, common law systems are much more complex in practice, nevertheless the principle of stare decisis as described above, is the foundation of all common law systems.

Civil law, also called Continental law or Romano-Germanic law, is the most prevalent legal system in the world. The main difference between civil and common law is that that common law draws abstract rules from specific cases, whereas civil law starts with abstract rules, which judges must then apply to the various cases before them. In other words, historically speaking, common law is based upon traditions and laws are codified following court rulings. On the other hand, in the case of civil law, laws are first codified and then applied. There are a number of civil codes besides the Napoleonic code.