Seychelles in IMF

Posted in International Organisations at 3:27 pm by Robert Klien

The Seychelles is one of the members of the International Monetary Fund (IMF).

The IMF is an organization that consists of 184 countries and works in order to:

  • foster global monetary cooperation,
  • facilitate international trade,
  • secure financial stability,
  • promote sustainable economic growth,
  • reach high employment
  • and reduce poverty.

On April 22, 2006, Honorable Tae-Shin Kwon, Vice Minister of the Ministry of Finance and Economy of the Republic of Korea made an IMFC Statement on behalf of 14 states among which was the Seychelles as well as Australia, New Zealand, Vanuatu, Solomon Islands, Mongolia, Federated States of Micronesia, Kiribati, Republic of Korea, Republic of the Marshall Islands, Philippines, Republic of Palau, Papua New Guinea and Samoa.

The statement emphasized the role of the IMF in the prosperity, stability and international monetary cooperation of these countries. The statement paid special attention to IMF role in low-income countries and their sectoral vulnerabilities which is very important for the Seychelles.


Seychelles and African Union

Posted in International Organisations at 12:11 pm by Robert Klien

The Seychelles is one of the 53 members of the African Union.

The AU is governed by the AU Assembly of Heads of State and the Pan-African Parliament, both are assisted by the Commission. The AU covers the whole continent except for Morocco that has a special status within the Union and benefits from the services available to all AU states from the institutions of the African Union, such as the African Development Bank.

The African Union originated in the Union of African States in the 1960s in attempts to unite Africa. These included the establishment of the Organisation of African Unity (OAU) in 1963 and the African Economic Community in 1981. The idea to establish the African Union was revived in the middle of the 1990s by the African Unification Front. The Sirte Declaration (1999) calling for the establishment of an African Union. resulted in launching the African Union in Durban in 2002.

The main objectives of this continental organization are as follows:

  • achieving greater unity and solidarity between the African countries and its peoples,
  • defending the sovereignty, territorial integrity and independence of AU Member States,
  • acceleration of the political and socio-economic integration of the continent,
  • promotion and defence of African common positions on issues of interest to the continent and peoples of Africa,
  • promoting peace, security and stability on the continent,
  • promoting democratic principles and institutions, popular participation and good governance,
  • encouraging international cooperation, taking due account of the Charter of the United Nations and the Universal Declaration of Human Rights,
  • promoting sustainable development at the economic, social and cultural levels as well as the integration of African economies;
  • advancing the development of the continent by promoting research in all fields, in particular in science and technology,
  • coordinating and harmonizing the policies between the existing and future Regional Economic Communities for the gradual attainment of the objectives of the Union, etc.

The 6th Session of the Conference of AU heads of state was held in Sudan in January 2006, where 40 African leaders participated.

During his stay in Sudan, Seychelles Vice-President Joseph Belmont said that the country is among 13 other countries having problems with settling their arrears with AU. The Seychelles owed the AU about 1.6 million USD, but, as a result of continuous negotiations, the annual membership fee had been substantially reduced.

During the summit, Belmont met with many heads of state and representatives of such organisations as the Southern African Development Community (SADC) and the Arab Bank for Economic Development in Africa (Badea). Also, education and culture were the issues of discussion during the summit. Here, the Seychelles shared its experience and its achievements with other AU countries.


Financial system and banking in Seychelles

Posted in Seychelles banking, Seychelles offshore jurisdiction at 9:43 pm by Robert Klien

The Ministry of Finance is the institution responsible for economic decisions and budgetary policy in the Seychelles. The banking system is supervised by a separate Monetary Authority that also manages money supply.

The following banks represent the Seychelles banking system:

Besides banks, there are two regulated non bank financial institutions that make a part of Seychelles financial system as well:

  • Seychelles Credit Union,
  • Seymore Bureau de Change.

The Development Bank of Seychelles is the bank that belongs to the government. The rest are commercial banks offering the full range of services.

By the way, Barclays Bank was the first bank in the country to officially launch offshore banking facilities to capitalize on the growing offshore company registration services and the developing network of Double Taxation Treaties which provide international businesspersons with increased tax structuring and planning opportunities. Its Offshore Banking Unit works to provide a personalized service to meet the needs of international clients.


Looking for Online Search of Seychelles Companies?

Posted in Seychelles CSL, Seychelles IBC, Seychelles offshore jurisdiction at 1:41 pm by Robert Klien

This service can be obtained for free at the official website of the Republic of Seychelles. Unfortunately, the architecture of the web page does not provide a direct link to fully functional web page. Nevertheless, link can be quite easily found through the menu: go to http://www.virtualseychelles.sc/pages/vs_ie.htm, choose “business” in the upper menu and then use left menu “Company search”.

If this does not work, the following link can be used: http://www.virtualseychelles.sc/busi/busi_c_list.asp, however, it will not contain a menu, but just a Seychelles company search itself.

There you can either make search or try to find the company alphabetically. Through this company search you can get company director, address, mail, fax and phone number as well as its field and a short description of company’s business activities.

For instance, let us click “K”, then choose “KPMG Pool & Patel” and find the information on this audit firm. Or let us click “F”, choose “Fidelity Corporate Services (Seychelles) Ltd” and find the information on this SIBA licensed offshore service provider.

So, this is a very useful source, the only drawback is that the information does not provide the web sites of these companies. However, this problem is easily solved. For example, Fidelity’s e-mail indicated in company search is fidelity@seychellesoffshore … , so let us substitute the left part before “@” by “www.” , and what we get is the precise web address of this offshore company formation services provider (www.seychellesoffshore.com).


Seychelles quitting and rejoining SADC

Posted in International Organisations at 1:59 pm by Robert Klien

It goes without saying that the Seychelles is different from most member states of this organization in many ways – not only geographically, but also economically. For example, Seychelles Gross Domestic Product (GDP) is only 0.7 million USD while total GDP of the region is almost USD 300 million. In 2004 (the year it quit SADC), GDP per Capita in the Seychelles was the highest among the member states – USD 8,348 (the average was just USD 1,985).

Also, a small amount of Protocols in SADC signed by the Seychelles reflects its little activity in the organization.

However in 2006, in his Budget Address the President James A. Michel emphasized that the Seychelles is increasingly active in international relations and “the Ministry of Foreign Affairs has a key role to play in defending and promoting Seychelles’ interests in an increasingly globalised world.” This is why the Seychelles is going to rejoin SADC in 2006.

It seems likely that the Indian Ocean island will solve its problem with SADC, including membership payments, and will be able to actively promote its financial interests in the region through the Southern African Development Community. Previously, there was little justification for spending 550 000 USD, while the state was undergoing difficulties with the shortage of foreign exchange. Now, the Seychelles economy has improved and its new foreign policy contains plans to rejoin SADC as South Africa has a significant market for Seychelles products.

Country’s Ministry of Foreign Affairs has already allocated a budget of 1.9 million USD for the preparations for Seychelles re-entry into SADC.


Seychelles joining and quitting SADC

Posted in International Organisations at 2:40 pm by Robert Klien

The Southern African Development Community (SADC) was established as the Southern African Development Coordination Conference (SADCC) in 1980, when an alliance of 9 majority-ruled States in Southern Africa was formed to coordinate development projects and to decrease economic dependence on apartheid South Africa. The founding Member States of the SADCC were Angola, Botswana, Mozambique, Lesotho, Swaziland, United Republic of Tanzania, Malawi, Zambia and Zimbabwe. In 1992, the Declaration and Treaty establishing the Southern African Development Community (SADC) was signed. In the following years, South Africa, Mauritius and the Democratic Republic of Congo joined the Community. The Seychelles joined SADC in 1997.

In 2004, the Seychelles pulled out of the Southern African Development Community and had to pay outstanding arrears before leaving. So, its SADC membership lasted for just 7 years. The Seychelles is a small African island country that faced paying big money for membership in SADC which amounted to 500 000 – 550 000 USD per year.

The Seychelles announced pulling out because SADC was not serving any purpose. The officials said that a cost analysis had been carried out to find out what the Seychelles and its people got from country’s membership in SADC and they saw no benefits. No return on Seychelles investment of money, effort and time was seen by the country authorities.

When leaving SADC, Seychelles officials noticed that this organization as such is very good for the African continent, but it does not serve the interests of Seychelles as a tiny island country.


Talks on double taxation avoidance, Seychelles-Belgium – example of negotiation phase

Posted in Double Taxation Agreements at 4:51 pm by Robert Klien

In order to encourage and promote investment, the Seychelles held the first round of negotiations with a delegation from Belgium in November 2005. The talks were aimed at concluding an agreement for the double-taxation avoidance agreement (DTA).

Belgium was the first EU member to take part in negotiations of a Double Taxation Agreement with the Seychelles. The agreement will apply to taxes on income imposed on behalf of both countries. It will provide an opportunity to facilitate trade and investment between the Seychelles and the EU.

This is an example of negotiation phase.

The example of withdrawal phase could be a situation with Seychelles – Indonesia tax treaty described on 07.04.06 in blog “Seychelles Double Taxation Agreement with Indonesia”.


Double-taxation avoidance agreement, Netherlands-Seychelles – example of consideration phase

Posted in Double Taxation Agreements at 9:06 pm by Robert Klien

In May 2006, the ambassador of the Netherlands to the Seychelles, H.E. Tanya Van Gool said that the Netherlands is considering the possibility of drawing up a double-taxation avoidance agreement (DTA) with the Seychelles.

Mrs Van Gool talked about this agreement with the press after having completed her 3-year mandate. Meeting with the press was after ambassador’s farewell call on President James Michel at State House.

Mrs Van Gool obviously had mandate to provide this information representing her state. As we know, the Seychelles very actively supports concluding double taxation treaties and is very successful at this, we could expect to hear some news on this subject soon.

If completed, this would help to increase commercial investment from the Netherlands private sector into the Seychelles and probably would make the Seychelles an attractive potential investment destination for investors.