To print this article, all you need is to be registered or login on Mondaq.com.
The Republic of Seychelles is an archipelago in the Indian Ocean
made up of 115 islands. With its main industries resting on the
tourism and fishing, Seychelles’ offshore services sector is
slowly but surely emerging as the strongest pillar of its economy
and the Government of Seychelles has recently introduced a number
of legislative and regulatory changes to support its offshore
Seychelles was rated as the second best country in information
and communication technology (ICT) development in the African
region as per the International Telecommunication Union’s ICT
Development Index, with a mobile penetration of almost 100%. Due to
its relative geographical isolation, continued connectivity is a
key issue and therefore, the Government of Seychelles along with
private partners has started the project to bring a second fibre
optic cable to Seychelles in order to strengthen its current
infrastructure. As part of the efforts to develop the ICT sector,
the government of Seychelles has published a National ICT Policy
that seeks to promote the use of ICT in all sectors of the economy
of the country. The Central Bank of Seychelles has launched its
electronic fund transfer system to be in line with its objective to
modernise Seychelles’ payment systems.
The Government of Seychelles is also seeking to amend its anti
money laundering as well the beneficial ownership laws in order to
assist to promote transparency and better align the country’s
legal framework with international standards by introducing new
measures to combat money laundering and terrorist financing.
Additionally, the laws will also help address threats to the
integrity of the financial system as well as reputational risks. In
order to encourage innovative financial products, Seychelles has
introduced the option of a regulatory sandbox which provides a
regulated environment within which Seychelles-registered companies
carrying out FinTech-related financial services within the
securities industry can operate.
Seychelles, with its modern and competitive financial services
industry, a forward thinking financial services regulator,
attractive business conditions and fibre optic connectivity is an
the ideal location for virtual asset companies as well as companies
operating in the Fintech sector.
Technology and Innovation
1. Are there any “sandbox” or other regulatory neutral
Yes, the Financial Services Authority (Regulatory Sandbox
Exemption) Regulations, 2019 (“the
Regulations“) were introduced in June 2019.
The regulatory sandbox (“sandbox”) allows companies to
test innovative eligible financial services or products within a
defined duration and controlled environment and under the
Seychelles Financial Services Authority’s supervision. It also
includes adequate safeguards measures to ensure consumer protection
in cases of failure and to ensure the overall safety and soundness
of the financial system. The sandbox allows for testing through
exemptions from licensing, disclosure and reporting requirements
under the Securities Act, 2007.
2. Is there a Digital “incubator” or hub?
Apart from the above sandbox, there is no specific digital
“incubator or hub.
3. Are there any barriers to entry for foreign technology
There are no special limitations or barriers to entry for
foreign technology companies. However, a foreign company looking to
conduct business in Seychelles would be required to set up a
domestic company in Seychelles. It would also be required to obtain
the approval from the Seychelles Investment Board
(SIB) for licensing purposes. The licence would
depend on the business that the foreign company seeks to do in
Seychelles. Further, it shall also require government sanction in
order to rent or lease any immovable property in Seychelles for the
purpose of conducting business in Seychelles. To note, the above
application would not be required when applying under the sandbox
A foreign company looking to conduct business outside
Seychelles has the option to incorporate an international business
company and subject to a few restrictions, it would not be required
to obtain licences in Seychelles.
4. Have traditional institutions embraced new technologies?
The market ecosystem is still dominated by
traditional technologies in Seychelles but there is a lot of
interest in the block chain technology as well as Virtual Assets
Interestingly, MERJ Exchange, the only securities
exchange in Seychelles has allowed for listing of tokenised
securities and has listed its own ordinary shares in the form of a
security tokens on its Main Board. The exchange seeks to build a
global securities and digital asset exchange ecosystem with direct
market access for global traders and market intermediaries.
5. What forms of legal entity are available for technology
The main types of entities available for technology
companies under the laws of Seychelles are:
- A domestic company, which is
incorporated under the Companies Act 1972 (Companies
Act) and is required to have a minimum of two shareholders
and directors, with 100% foreign ownership allowed, subject to the
government sanction where business premises in Seychelles are
required by the company. A tax rate of 25% is applicable on the
first SCR 1 million of profits and 33% above SCR1 million.
Financial institutions are incorporated under the Companies Act and
licensed by the Central Bank pursuant to the Financial Institutions
- An international business company,
which is incorporated under the International Business Companies
Act 2016. A minimum of one shareholder and director is required. It
is tax exempt in Seychelles when its business is conducted outside
Seychelles. It would be required to pay tax as per the rates
specified above in case it carries on business in Seychelles.
- A company with special license, which
is incorporated under the Companies Act and licenced under the
Companies with Special Licence Act, 2003. It is tax resident in
Seychelles and has certain benefits such as exemption from stamp
duty and also lets investors take advantage of the more than 35
double-taxation agreements that Seychelles has with different
6. What AML requirements apply to businesses in Seychelles?
International standards of anti-money laundering and
counter-terrorist financing are set by the Financial Action Task
Force (FATF). The Anti Money Laundering and Countering the
Financing of Terrorism Act, 2020 (AML Act) and the
Anti Money Laundering Regulations would be applicable to businesses
in Seychelles. These include but are limited to identification of
risks, compliance with customer due diligence measures, monitoring
of customer transactions and reporting of suspicious transactions
to the Seychelles Financial Intelligence Unit.
7. Are electronic signatures valid?
Yes, the Electronic Transactions Act, 2001 puts
electronic signatures on an equal footing with “wet ink”
signatures under the laws of Seychelles.
8. How is personal data protected?
At present there is no specific legislation for
protection of personal data. The Computer Misuse Act, 1998 makes it
a criminal offence for any person to secure unauthorised access or
make unauthorised modification to a computer or a computer
programme. The Electronic Transactions Act, 2001 provides penalties
for offences under the act namely the offence of tampering with a
computer source document, of failing to furnish information, of
acting in breach of confidentiality and privacy, and, among others,
of fraudulently dealing with the digital signature certificate.
1. How are virtual assets regulated?
There is no separate legislative or regulatory frame work with
respect to virtual assets in Seychelles.
The primary legislation which governs securities and investment
products in Seychelles is the Securities Act, 2007
(Securities Act). The Securities Act provides for
licensing and regulation of securities dealers, investment advisers
and securities exchange and the responsible body for the same is
the Financial Services Authority (FSA). The
Securities Act specifically lists the financial products that are
considered securities under the Act and does not include virtual
assets/ cryptocurrencies under the list. However, whether an
asset/product would be considered as a security under the
Securities Act would be determined by the features of the
2. Are virtual assets subject to the local AML regime?
Yes. The Anti Money Laundering and Countering the Financing of
Terrorism Act, 2020 (AML Act) provides for the AML
regime in Seychelles and its main principle is that reporting
entities should follow and apply the provisions of the law which
reflect the Financial Action Task Force’s (FATF) international
standards to prevent detect and combat money laundering and
terrorist financing. The AML Act defines a “reporting
entity” as those persons that carry out certain businesses and
activities and include banks (including offshore banks), bureau de
change, insurance companies, money transfer companies, securities
companies, corporate service providers, etc.
As per the definition of a reporting entity under the AML Act, a
Seychelles international business company carrying out the business
of dealing in virtual assets would not be considered as a reporting
entity. However, we recommend a cautious approach as far as
anti money laundering legislation is concerned and in our view
companies incorporated in Seychelles must take appropriate measures
to maintain the customer identification and record-keeping
procedures and follow the anti-money laundering and
counterterrorist financing obligations under the AML Act.
The Anti Money Laundering and Countering the Financing of
Terrorism Act, 2020 defines virtual assets as ” a digital
representation of value that can be digitally traded or transferred
and can be used for payment or investment purposes and does not
include digital representation of fiat currencies, securities and
other financial assets.”
3. Is a physical presence required in the Seychelles to
conduct a virtual asset sale?
An international business company carrying out its business
outside Seychelles may conduct a virtual asset sale without a
physical presence in Seychelles.
4. Are gambling platforms permitted?
Yes, online gambling platforms are permitted, and regulated
under the Seychelles Gambling Act, 2014.
5. Can decentralised-finance (DeFi) products be launched from
Yes. Decentralised Finance refers to a technology set that aims
to replicate and innovate on current financial services
models/products using blockchain technology. These financial
services range from virtual assets that may or may not represent
assets in the real world to financial smart contracts that can
replicate derivative products found in traditional finance
There are no restrictions under Seychelles laws that would
prevent replication of current financial services models using
blockchain technology. There is no specific legal or regulatory
framework for decentralised finance products in Seychelles, however
such products shall be subject to the Securities Act, where
Virtual Asset Service Providers (VASPs)
1. Can a crypto-to-crypto exchange be established?
Currently, there are no restrictions with respect these under
Seychelles law. Companies seeking to operate a crypto to crypto
exchange may set up an international business company for the
2. Can a crypto-to-fiat exchange be established?
There are no guidelines or regulations with respect to the
above. However, a crypto to fiat exchange may fall under the
definition of “banking business” under the Financial
Institutions Act, 2004 and it would be advisable to obtain the
opinion of the Central Bank of Seychelles with respect to such an
exchange. An international business company is not permitted to
carry out banking business in or outside Seychelles.
3. Is a money services licence required for crypto-to-fiat
conversion through an OTC desk?
There are no guidelines or regulations with respect to the
above. However, crypto to fiat conversion through an OTC Desk may
fall under the definition of “bureaux de change business”
under the Financial Institutions Act, 2004 and it would be
advisable to obtain the opinion of the Central Bank of Seychelles
with respect to such an OTC Desk.
4. Can a virtual asset project establish a local bank
Potentially, but local banks remain very cautious about
accepting business where funds are derived from the sale of virtual
5. Can you register as a virtual asset custodian in
There is currently no registration regime under Seychelles
6. Are VASPs subject to the local AML regime?
1. Are tokenised funds regulated in Seychelles?
There is no separate framework for the regulation of tokenised
funds in Seychelles.
2. What service providers are required for a tokenised fund?
3. What AML/KYC is required for token holders?
4. Is there a minimum investment amount?
5. Can token holders redeem their tokens or transfer the tokens
1. Does Seychelles impose economic substance requirements?
There are no regulations with respect to economic substance
requirements in Seychelles.
2. Are there any reporting requirements in connection with
3. What penalty provisions apply in the case of
The Seychelles Copyright Act, 2014 expressly includes computer
programs within the definition of “literary and artistic
works” and therefore protects them during the life of the
author and for 50 years after his or her death.
The Copyright Act provides for only two instances where
reproduction and adaptation of computer programs are permitted for
use of the computer program with a computer for the purpose and
extent for which the computer program has been obtained or (ii) for
archival purposes and the replacement of the lawfully owned copy of
the computer program in the event that the said copy of the
computer program is lost, destroyed or rendered unusable.
Financial technology is potentially copyrightable. As mentioned
above, under the new copyright laws in Seychelles, copyright will
automatically subsist in works such as computer programs.
Computer source code is regulated under the Electronic
Transactions Act. As such, it is an offence for anyone who
knowingly or intentionally conceals, destroys or alters or
intentionally or knowingly causes another to conceal, destroy or
alter any computer source code used for a computer, computer
program, computer system or computer network, when the computer
source code is required to be kept or maintained by law for the
time being in force. Computer source code means the listing of
programs, computer commands, design and layout and program analysis
of computer resource in any form.
Open source code is otherwise not separately regulated or
protected in Seychelles.
2. Trade Marks
The main IP rights available to protect branding are registered
trademarks. Fintech companies will generally own a combination of
an established brand or trade name (which can include logos or
icons) protected as registered trademarks.
Trade mark rights under the new Industrial Property Act, 2014
(designed to comply with the Trade-Related Aspects of Intellectual
Property Rights (TRIPS) compliance for World Trade Organisation
Accession) give registered owners the right to prevent others using
identical or confusingly similar marks to their registered
Patents in Seychelles are awarded under the Seychelles
Industrial Property Act, 2014. For Fintech companies, software is
not, of itself patentable, although processes or methods performed
by running this software may potentially be patentable. Such
processes or methods would need to be new, involve an inventive
step and be industrially applicable to be patentable.
4. Trade Secrets
The Industrial Property Act 2014 prohibits any unfair
competition concerning undisclosed information and provides that
any act or practice that, in course of industrial or commercial
activities, in relation to industrial property rights results in
the disclosure, acquisition or use by others of undisclosed
information without the consent of the person lawfully in control
of that information (rightful holder) and in a manner contrary to
honest business practices shall constitute an act of unfair
The disclosure, acquisition or use of confidential information
by others without the consent of the rightful holder may, in
particular, result from:
- industrial or commercial
- breach of contract;
- breach of confidence;
- inducement to commit industrial or
commercial espionage, by breach of confidence or contract; or
- the acquisition of confidential
information by a third party who knew or was grossly negligent in
failing to know that this acquisition entailed one of the foregoing
There are civil as well a criminal remedies provided in case of
infringements of rights under the Industrial Property Act 2014.
Doing Business in Seychelles
1. Trade Licences
Companies under the Fintech sector may require a licence from
the Central Bank of Seychelles in order to operate in Seychelles.
Exchanges for cryptocurrencies may be under the purview of the
Financial Services Authority and may require a licence under the
2. Visas and Work Permits
Seychelles has Visa on Arrival for visitors which is extendable
to up to three months. If it is intended that any management staff
(including owner/directors) shall be non-Seychellois, as a
requirement under the Seychelles Immigration Decree, they must
obtain a gainful occupation permit (GOP) in order to work in
Seychelles. There are certain guidelines for the recruitment of
non-Seychelles workers and a quota for entitlement and procedures
to go through for certain sections of the industry issued by the
Ministry of Labour and Human Resource Development (MLHR).
3. Transportation Links
Seychelles is easily accessible via flights with a number of
airlines operating daily flights to and from Seychelles and has
excellent air connectivity to major hubs in the Middle East,
Europe, Africa and Asia.
4. Tax Matters
An IBC incorporated under the International Business Companies
Act 2016 is exempt from income tax in Seychelles if its carries on
its business outside Seychelles. Beneficial owners are advised to
seek independent tax advice in relation to any tax implications in
their jurisdiction. The usual business tax rate for a domestic
company is 25% on the first SR1,000,000 of taxable income and 33%
on the remainder. Usual business tax rates shall also apply to
international business companies if they derive assessable income
in Seychelles. There are currently no specific tax conditions or
attributes designed for Fintech entities in Seychelles.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Credit: Source link