Unregulated Offshore Funds

Booming Seychelles seeks double-tax treaties. At a conference held in the Seychelles last month under the banner “The Future of Offshore Centres in the Cyber Age”, the government promised its support in developing the islands into a world-class financial centre. In alliance with the Seychelles International Business Authority, the government has pledged to encourage the growth of the business and finance sectors by implementing the relevant legislation and strengthening the country’s infrastructure.

Acting President, Vice President James Michel said that the Seychelles was committed to developing telecommunications and IT infrastructure, adding: “We want continually to improve the environment in which business over computer networks is conducted.”

Unregulated Offshore Funds - The Government

One of the first pieces of legislation the government intends to enact involves a number of double-taxation treaties in an effort to encourage investment flows through the islands. So far, the Seychelles has negotiated a double-tax treaty with South Africa - though it is not yet in force. It sees such treaties as being an important part of its scheme to develop as a key financial hub in the Indian Ocean, and is actively negotiating more treaties with a number of its trading partners.

James Michel also commented on the Organisation for Economic Cooperation and Development and FATF reports that have “named and shamed” a number of offshore tax havens for their “harmful” tax practices and inadequate anti-money-laundering controls. He said that this questioning of tax havens’ integrity had tainted other offshore tax centres which are now suspected of illegitimate practices.

He explained: “My government has been vocal in its support of legitimacy of offshore financial services. We have argued the case for the Seychelles and made the commitments necessary to remove these damaging preconceptions.”

Unregulated Offshore Funds & The Seychelles

Currently, the Seychelles has no international treaties relating to the exchange of information, but the double-tax treaties it is negotiating will include such clauses based on the OECD model. However, there are a number of pieces of domestic legislation in force, including the Mutual Assistance in Criminal Matters Act 1995, the Anti-Money-Laundering Act 1996, and most of the sectoral ‘offshore’ acts that accept the need to provide information internationally when criminal behaviour is suspected.

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