Economic Overview
Despite the robust pace of growth, the economy does not appear to be overheating. Inflation picked up, to 3.2% year-on-year in July 2017, but this reflects supply-side pressures from increases in administered tobacco prices and tariffs. Food prices have remained moderate (with inflation at about 2%). Private sector credit growth stood at 8.0% year-on-year at the end of Q1 2017.
Over the years, Seychelles has introduced several financing mechanisms to encourage and support the Small and Medium Enterprises (SMEs) with specific schemes for Farmers and Fishermen. This is in a continuous efforts towards improving Access to Finance for businesses with the purpose of encouraging and promoting entrepreneurship.
The Small Business Financing Agency (SBFA) was set to assist the micro and small businesses with interesting rates.
The Government has taken regulatory measures to create a suitable environment for foreign investment, such as a reduction in the corporate tax rate. In addition, a skilled workforce, an efficient legal system based on the Napoleonic Civil Code and a transparent access to different legal sources concerning investment represent great advantages for investors. Seychelles is ranked 93rd (out of 190 economies) on the Doing Business 2017 list issued by the World Bank, same spot as last year. In fact, the country even lost 8 spots in the sub-ranking of starting business (from 129th to 137th).
Key Sectors
The fishing sector (smoked tuna, frozen fish) attracts much of the FDI. Increased opening to foreign investors, notably Chinese, is expected to continue. Lastly, the discovery of significant oil deposits on the coastlines of the Seychelles is sparking new interest among investors. Licenses for exploration and exploitation have already been granted in 2013.
Agriculture – products: coconuts, cinnamon, vanilla, sweet potatoes, cassava (tapioca), bananas; broiler chickens; tuna fish
Industries: fishing; tourism; processing of coconuts and vanilla, coir (coconut fiber) rope, boat building, printing, furniture; beverages
TOURISM
The country is served by a host of respected international airlines, making it a non stop flight from Europe, the Gulf and Singapore and a one-stop flight from almost any of the world’s major cities. This enables the country to tap into the Gulf and international business community focused in the region, as well as offering a two-stop sun and shopping holiday package.
OFFSHORE INDUSTRIES
Seychelles first recognised the potential revenue generating capabilities of off-shore financial services in the early 1990’s but the industry only began to take off in the early years of the following decade. The industry is rapidly becoming a third pillar (alongside tourism and fisheries) to the country’s economy.
Part of the reason for its success has been the stringency of the industry regulating International Corporate Services Act, which ensures that all service providers in Seychelles adhere to strict professional standards and are subject to a high level of due diligence prior to the issuance and renewal of a licence.
Taxes in Seychelles
Personal tax
In Seychelles, the Personal Income Tax Rate is a tax collected from individuals and is imposed on different sources of income like labor, pensions, interest and dividends. Flat rate of 15%.
Company Tax From 25% to 33%
A company is considered to be tax resident in Seychelles if it is incorporated in Seychelles or has its central management and control in Seychelles or if its voting power is controlled by shareholders who are resident in Seychelles.
Taxable Basis
Both Seychelles tax resident companies and foreign companies are taxed only on income generated in Seychelles.
Corporation tax (business tax) is levied on taxable profits at 25% on the first SCR 1,000,000 and 30% on the remainder except for some financial institutions, telecom companies, alcohol producers, etc. at 33%.
International Business Companies (IBCs) are exempt from corporation tax in Seychelles. Special License Companies (CSLs) are taxed at a flat rate of 1.5% on their worldwide income.
Concessions on Business Tax
There may be concessions on business tax depending on the industry you are in. Concessions may apply if you hold:
• a Tourism Incentive Act (TIA) Certificate
• an Investment Promotion Act (IPA) Certificate or
• an Agricultural and Fisheries Act Certificate
• a license as an importer/retailer operating an Exclusive Shop Outlet as authorized by the Government • a license as an importer/retailer operating as a Duty Free Shop as authorized by the Government
• a registration under the International Corporate Service Providers Act 2003
• a Company’s Special License under the Companies Special Licenses Act 2003
Keen to establish itself as one of the world’s leading off-shore registries, Seychelles offers wide ranging benefits to investors choosing to register as International Business Companies (IBC’s) in the jurisdiction as following:
• Speed of registrary
• Competitive license fees fixed for life
• No requirement to disclose the beneficial owners of an IBC
• Directors may be elected at the first company board meeting
• No minimum capital stipulation
• Confidentiality guaranteed by law
• Bearer shares allowed
• Only one director or shareholder is required
• No requirement to file accounts with the Registrar
• All civil proceedings in respect of IBC’s may be heard by a judge in chambers • An IBC may own/manage a vessel/aircraft registered in Seychelles
• Register of directors need not be filed with the Registrar
Fiscal laws in place provides fair government of Seychelles has introduced a range of legislative measures offering concessions to businesses operating in various sectors of the economy.
Concessions are granted on Business tax, Withholding tax on royalties, GST, Trades tax and tax relating to the employment of foreign labour.
The government has also been actively cutting away at the country’s trades tax rates, with the result that, on all but a handful of revenue sensitive items, it now stands at 0%.
Seychelles’ Double Taxation Avoidance Agreements:
- China
- South Africa
- Oman
- Botswana
- Mauritius
- Thailand
- Malaysia
- Vietnam
- Cyprus
- Belgium
Traditional
participation of the Commonwealth and Francophonie associations.
The nation’s system of abroad consulates, from where exchange and business can be specifically advanced, has as of late been extended to envelop the developing financial powerhouses of China and India.