On 1 November 2016 the International Business Companies Act came into force in the Seychelles replacing the earlier 1994 ICB Act, as amended, which has been repealed. Seychelles companies incorporated under the 1994 Act are deemed to be automatically registered under the new 2016 legislation.
The 2016 Act introduces a number of significant changes to comply with new international standards, including OECD Transparency and Exchange of Information for tax purposes and FATF, as well as to improve the attraction of Seychelles as a jurisdiction.
We consider below some of the principal changes introduced by the new Act to Seychelles International Business Companies (IBC):
1. Record Keeping and Filing.
Together with the existing obligations to keep and maintain resisters of directors and shareholders, an IBC is now obliged to prepare and keep a registrar of beneficial owners at its registered office in the Seychelles, in compliance with OECD international standards. The register of beneficial owners is not open to public inspection and remains confidential. Listed companies and their subsidiaries are exempted from this requirement.
From now on, the register of directors must be kept at the registered office and a copy filed with the Seychelles Registrar of Companies. This register of directors will be open for public inspection with effect from November 2018. There is a transition period of 12 months to allow existing IBC’s until October 2017 to file the directors’ register with the Registrar.
The Seychelles Revenue Service and Financial Intelligence Unit will have access to the register of directors’ held by the Registrar of Companies.
IBC’s are required to keep the register of charges at the registered office, with the option to file the charges register with the Companies Registrar. We expect creditors will usually require the filing of the charges register, as this will determine the priority of charges recorded against company assets.
An IBC will no longer be required to provide to the Registered Agent an annual declaration of compliance. It is replaced by an annual return which will record the address where the accounting records, board minutes and resolutions are held. The annual return will be held by the registered agent but will be provided to the Registrar of Companies upon request.
2. Other Filing Requirements for Seychelles entities.
The Annual Return of an IBC are required only to cover those accounting records, board minutes and resolutions that are kept outside of the Seychelles. The return must provide details of the location where those records are kept. Penalties will be imposed on IBC’s that fail to provide an annual return or provides false or misleading information in the return.
The general obligation to ensure that all records of IBC’s are accurate has been enhanced to require that all registers, that is, the registers of members, directors and now beneficial owners must be true, accurate and up to date.
IBC’s have the option to file the registers of members, charges and beneficial owners with the Seychelles Companies Registrar. In addition, a company has the option to file the annual statement with the Registrar, otherwise, the decision to file or not, rests with the IBC.
3. Other Provisions.
To bring the Seychelles in line with international standards, companies in default with their obligations will be struck from the register in 90 days, a significant reduction to the previous 120 days period.
The object clause is no longer required to be stated in the memorandum, as the IBC will be deemed to have the ability to conduct any activity that is not prohibited. Companies with an objects clause will only be able to pursue those activities permitted in the object.
The rules applicable to the dissolution and winding up of companies and the voluntary liquidation of insolvent companies has been strengthened and clarified.
The provisions regarding fraudulent or insolvent trading have also been tightened and the court now has the power to disqualify individuals from holding a directorship or being appointed a secretary for fraud, dishonesty or other wrongdoing with the IBC.
The suffixes to company names indicating limited liability has been reduced to ‘Limited’, ‘Incorporated’ and ‘Corporation’ and their abbreviations.
In addition the law prohibiting the issue of bearer shares has been clarified.
Penalties have been introduced in line with FATF recommendations and range from $50,000 for false and misleading statements, failure to keep an accurate register of member £500 a day and £10,000 to £50,000 for a failure to identity and disclose beneficial owners.