The Seychelles operates a mixed legal system, having been a French and a British colony. As a result, its substantive civil law is governed by a Civil Code based on the French Napoleonic Code, which forms the basis of its contract law, law of property and law of succession. Court processes are based on English procedures. More modern laws are derived from British or western models, such as company and insolvency laws. The court system sees the Court of Appeal as the apex and final court. Despite its nomenclature, the Supreme Court of Seychelles falls under the Court of Appeal, dealing with large and complex civil claims in addition to serious criminal cases. It also hears appeals from lower courts and tribunals. Adjacent to the Supreme Court of Seychelles is the Constitutional Court, which deals with constitutional petitions. Below these are the Magistrates Courts, which hear smaller civil claims and less serious criminal cases. Beneath these in the hierarchy are various lower tribunals and boards. The legal profession is fused, and lawyers in the country are admitted as attorneys at law with full rights of audience before all of the local courts, engaged to conduct all legal work. There are also notaries, who primarily draft and authenticate documents. Most attorneys at law are also notaries. The law has also created a number of legal practitioners with limited rights of practice.

Approval of Foreign Investments

The Seychelles Investment (Economic Activities) Regulations 2022 provide for a wide range of economic activities in which those who are not native to the Seychelles may invest. However, there are certain economic activities that are reserved for those of Seychellois nationality only, and such activities are set out in the Reserved Economic Activity Policy. Additionally, there are categories of economic activities in which a non-native can only invest jointly with a Seychellois, and these are set out in the Second Schedule of the Seychelles Investment (Economic Activities) Regulations 2022. Apart from these restrictions, a non-native may, subject to the economic needs test, invest in any other economic activities.

A non-native cannot acquire or lease immovable property in the Seychelles without having first obtained the permission of the government. If an investment results in them acquiring rights in immovable property, they must therefore obtain the approval of the government before executing any transfer instrument or lease.

Procedure and Sanctions in the Event of Non-Compliance

Investment process

In practice, a non-native investor must submit a business plan together with the relevant documents to the Seychelles Investment Board (SIB). If the application is in order, the business plan/project will be registered with the SIB within 48 hours. The SIB will liaise with the relevant government departments or authorities for their comments and recommendations on the business project. The SIB usually provides feedback to the investor within 14-30 days, depending on the type of investment.

If the investment is for an economic activity that is not covered in the Seychelles Investment (Economic Activities) Regulations 2022, an economic needs test must first be performed. The business plan/project will be submitted to the Economic Needs Test Committee for its evaluation and consideration.

The government departments and/or authorities must have no objections to the business plan/project for the investor to be able to implement the business/project. It is very unlikely that a non-Seychellois investor will be able to invest without their approval. 

Obtaining Approval

In practice, a non-native investor must submit a business plan together with the relevant documents to the Seychelles Investment Board (SIB). If the application is in order, the business plan/project will be registered with the SIB within 48 hours. The SIB will liaise with the relevant government departments or authorities for their comments and recommendations on the business project. The SIB usually provides feedback to the investor within 14-30 days, depending on the type of investment.

If the investment is for an economic activity that is not covered in the Seychelles Investment (Economic Activities) Regulations 2022, an economic needs test must first be performed. The business plan/project will be submitted to the Economic Needs Test Committee for its evaluation and consideration.

The government departments and/or authorities must have no objections to the business plan/project for the investor to be able to implement the business/project. It is very unlikely that a non-Seychellois investor will be able to invest without their approval. 

Rights in Immovable Property

A non-native must submit an application for approval and pay the application fee to the Ministry of Lands and Housing. The application will be considered by the Ministry and a decision is usually communicated within a month.

Any sale or lease of an immovable property to a non-Seychellois without the prior approval of the Minister is unlawful and void. The applicant could be liable to a fine or imprisonment. 

Depending on the type of investment, the government departments and/or authorities may approve the business plan/project subject to certain conditions – eg, that planning permission is obtained for the construction of buildings or structures; that health and safety requirements are met; that an environmental permit is sought; that the applicant is granted permission for the purchase or lease of the immovable property; and that a licence is obtained for the business in question.

If a non-native investor is not satisfied with the decision of a government department or authority with regards to its investment, they may apply to the Investment Appeal Panel for a review of the decision taken. Their application must be made in writing, specifying the reasons for the review, and an application fee must be paid.

The Investment Appeal Panel must make a decision within 30 days of the date of submission of the application. The panel may dismiss the application altogether, recommend the annulment in whole or in part of any unauthorised act or decision, or the remedying of any omission of the government department and/or authority or the re-evaluation of an application, specifying the grounds for its recommendation.

A non-native investor who is not satisfied with the decision of the Investment Appeal Panel has a further right of appeal to the Supreme Court.

The most commonly used corporate vehicles for business activities in the Seychelles are entities incorporated under the Companies Act 1972, and the law makes it a requirement that certain types of activities (such as banking or insurance operations) conducted locally can only be carried out through “1972 companies”. These are similar in structure to British companies, with shareholder liability limited and governance placed under the control of directors. An interesting but somewhat antiquated feature of these companies is that they must have at least two shareholders and two directors. In contrast, the most popular entity for activities conducted outside of the Seychelles is the International Business Company (IBC), incorporated under the International Business Companies Act 2016, often referred to as an “offshore companies” in the media. Information on the shareholders and directors of these companies is not readily available to the public, and they are often used in holding structures.

The process of incorporating a 1972 company or IBC are distinct, and takes place through separate registries. A 1972 company may be incorporated by anyone, although, in practice, it is more expedient to use an attorney at law. Information on the company’s purpose and rules, shareholders and directors must be submitted to the Registrar of Companies. Incorporation typically takes a few weeks. For an IBC, information on the company’s purpose, rules, and shareholders and directors must be submitted to a Corporate Service Provider, which may incorporate the entity within a day or two.

All companies are required to submit information on their directors and shareholders. This information is submitted to a publicly accessible registry for 1972 companies, but the details submitted to the Corporate Service Provider on an IBC might not be disclosed to the public. Additionally, both types of companies must submit beneficial ownership information to the Financial Intelligence Unit, but the beneficial ownership register is not available for public access. In addition, 1972 companies are required to file annual returns at the Registrar of Companies.

Both types of company are governed by directors (one-tier).

In both types of entity, directors have a fiduciary duty to act in the best interests of the company. The concept of piercing the corporate veil exists, with UK legal precedent on the matter considered a persuasive authority.

The employment relationship is governed by the Employment Act 1995 and Employment (Conditions of Employment) Regulations 1991. Case law developments have affected practice, but are not considered a source of law. Government employees are required to adhere to certain codes and practices as prescribed in Public Service Orders.

Legally, employment contracts must be prepared in writing, be signed by the employer, and must specify the following: .

• the names of the employer and worker;
• the nature of the employment;
• in the case of a fixed-term contract, either the term or the specific scheme or project or specific work on which the worker is to be engaged;
• in the case of a contract of continuous employment, the probation period, if any;
• the place where the work is to be performed;
• the remuneration or wages to be paid, and the periods of payment and any other benefits the worker is to receive;
• the number of working hours per week;
• the requirements for overtime work, where applicable; and
• such other particulars as may be prescribed.

There is a minimum working time of eight hours per day, or 40 hours per week. There is a maximum working time of 12 hours per day, or 60 hours per week, and, exceptionally, 15 hours per day.

Overtime is regulated and a maximum number of hours is set (15 hours exceptionally) and the rate at which it is paid.

Termination of Employment Contracts by the Employee

Fixed-term contracts can be terminated in accordance with the termination clause of the contract. This typically allows the employee to terminate by giving three months’ notice or accepting payment in lieu thereof. In such a case, the employee is paid any annual leave accumulated and any benefits as agreed under the contract; in most cases, this benefit would have been forfeited for early termination of the contract.

Continuous employment can be terminated by the employee by giving the statutory one-month notice or notice of seven days if the employee is still on probation, or the agreed notice as per the employment contract, or payment in lieu of notice. In this case, compensation for length of service and any accumulated annual leave is due.

Termination of Employment Contracts by the Employer

For both fixed-term and continuous employment, the employer may terminate in cases of serious disciplinary offences. In this case, the employee will only be entitled to payment of any accumulated annual leave, and not to compensation for length of service.

Redundancies

Employers may opt for this where the business has ceased to operate, in whole or part; where there is a temporary suspension of business, in whole or part; or where there is an introduction of new technology, rendering some employees redundant. To terminate the contract of an employee due to redundancy, the employer needs to initiate a negotiation procedure through the Ministry of Employment which will determine whether this is a suitable case for termination due to redundancy. If it is found that it is a suitable case, employees are entitled to compensation and payment for accumulated annual leave. It is not uncommon for employers to voluntarily pay the employee(s) between one and six months’ of salary in these cases.

Employee representation and consultation within the workplace is not mandatory. However, if the terms of an employee’s contract are to be varied, this needs to be mutually agreed by and between the employee and employer.

On a national level, it is mandatory for trade unions/workers’ unions to be consulted by the Ministry of Employment before laws are made/changes are made to existing laws regarding conditions of employment (such as minimum wages, working hours, and leave entitlement). These unions may also assist employees before the Employment Tribunal and in negotiations with employers in cases of termination, changes to contracts or redundancies.

In the Seychelles, profits earned by companies through permanent establishments located abroad are not taxed. However, profits from foreign activities not connected to a permanent overseas establishment are taxable.

If a Seychelles company has sufficient economic sway in the country, it can be exempt from tax on passive income from foreign sources. However, excluding income from patents (or similar rights) connected to R&D conducted within the Seychelles, income from foreign intellectual property rights is taxable. 

Corporate Income Tax

A company that is tax resident in the Seychelles must pay corporate income tax (or business tax). Corporate income tax is progressive, and is levied on companies as follows:

• taxable income of up to SCR1 million – 15%
• taxable income above SCR1 million – 25%

VAT

The standard VAT rate is 15%.

Withholding Tax on Dividends/Interest

The withholding tax rate depends on the category of income, and whether it is being paid to a Seychelles resident or non-resident:

• Dividends, interest, royalties, natural resource amounts, or technical ‎services fee paid to a non-resident are taxed at 15%.
• Dividends paid under Section 62, whether by a resident incorporated entity to a resident incorporated entity‎ or by a resident incorporated entity to a resident unincorporated entity, do not have withholding tax applied.
• Remuneration paid by a promoter, agent, or similar person to a non-resident entertainer or sportsperson in ‎respect of a performance or sporting event in Seychelles is taxed at ‎5%.
• Managerial fees paid to a non-resident by a financial institution ‎operating in Seychelles are taxed at 33%‎.
• Insurance premium paid to a non-resident are taxed at 5%.‎
• Interest on current accounts, fixed deposits and call deposits of residents ‎and non-residents (in Seychelles rupees or foreign currency) are taxed at 5%.
• Interest on savings account, bank to bank transfers and non-residents ‎bank interest do not have withholding tax applied.
• Managerial fees paid to a non-resident by a financial institution ‎operating in Seychelles are taxed at 33%‎.
• Interest on bearer bonds is taxed at 15%.
• Interest paid by a person, being a non-financial institution, to a person ‎that is also not a financial institution is taxed at 15%.
• Treasury bills (where the recipient is not a resident or a non-resident ‎financial institution as defined in the Financial Institutions Act 2004 or ‎carrying on the business of an insurer as regulated under Insurances ‎Act, 2008)is taxed at 15%.
• The rate of withholding from the gross payment made to a specified ‎business listed in the Fourth Schedule of the Business Tax Act is 15%.