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2017.01.10 - Seychelles – International Business Companies Act 2016 introduced

 

On December 1, 2016 the new corporate law - Seychelles International Business Companies Act 2016 was adopted in the Seychelles. This new law regulates the matters of registration and the operations of International Business Companies (IBC) in the Seychelles, and is being developed in accordance with current global legislative requirements; it replaces the previous law which existed for over 20 years - Seychelles International Business Companies Act 1994.

Outlined below are some details of the new law which are important for businessmen who either operate companies in the Seychelles or intend to register a new company in this jurisdiction.

  1. IBC Act 2016 clearly prohibits Seychelles companies from the issuing of bearer shares. Before, the prohibition of bearer shares was established by amending legislation - Seychelles IBC (Amendment) Act 2013 – but now, the prohibition clause is included directly into the country’s basic law.
  2. The list of permitted abbreviations that can be used after a company name is now shorter. Pursuant to IBC Act 2016, the non-standard abbreviations like, for example, SarL, SRL, GmbH are no longer approved in the Seychelles. A company must be registered with one of the standard abbreviations - Ltd., Corp., Inc. (or, accordingly, with the words Limited, Corporation, Incorporated at the end of its’ name). The companies registered under the previous law with non-standard abbreviations are not required to change them; however, if the company changes its name, then the new name shall contain an abbreviation in accordance with the requirements of IBC Act 2016.
  3. The previous legislation required the registration agent to keep records on directors of Seychelles companies and, on a voluntary basis, as an option this information could be provided to the companies register. However currently, pursuant to IBC Act 2016, any IBC registered in the Seychelles is now obliged to provide the information on its directors to the companies register. For existing companies, the maximum period for the fulfillment of the above requirement is 12 months from the effective date of the new law, i.e. - by December 1, 2017.
  4. Pursuant to IBC Act 2016, registered agents in the Seychelles must keep records on beneficial owners of companies served by them. The previous law did not strictly state this requirement, allowing the agent to keep the records on beneficial owners with third parties – e.g. intermediaries/advisers, who worked directly with their clients. Technically, the criteria for judging the fulfillment of this new requirement will be the beneficial ownership register, kept with the Seychelles registration agent. There is no requirement to provide this information to the companies register or to other state institutions.
  5. Penalties for the breach of the requirements related to the keeping of records on directors, shareholders, beneficial owners as well as accounting records, are considerably increased by the new law – specifically they now total some 500 USD, and are increased by a further 50 USD on a daily basis until the specific omission is rectified.

Comments by INTERNATIONAL OVERSEAS SERVICES:

During a 20-year period while the previous law (Seychelles International Business Companies Act 1994) was in force, more than 180.000 companies were registered in this country and the Seychelles gained a respected reputation as a favourable jurisdiction for the establishment of corporate structures for international business.

By adopting the new law, the Seychelles has confirmed its status as a state meeting current international requirements, including the recommendations of FATF and OECD Global Forum. Furthermore through the adoption of this new corporate law the position of the Seychelles as one of the most popular classical tax-free jurisdictions will continue to strengthen.

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