Financial Planning in the Seychelles

The Seychelles archipelago — 115 islands in the Indian Ocean, approximately 1,500 kilometres east of mainland Africa — is best known for its extraordinary natural beauty: turquoise lagoons, granite boulder beaches, and some of the world's most pristine coral reefs. Less well known, but increasingly relevant for internationally mobile investors, is the Seychelles' position as a significant offshore financial centre with a genuinely territorial tax system and a growing residency programme. This guide addresses the Seychelles as a planning destination for HNW individuals, with an honest assessment of both the opportunities and the limitations.

The Tax Environment

The Seychelles operates a territorial tax system for individuals. This means:

• Income tax: Only Seychelles-source income is subject to Seychelles income tax. Income derived from overseas — investment returns on a foreign portfolio, rental income from overseas property, dividends from foreign companies, offshore employment income — is not taxed in the Seychelles.
• Capital gains tax: None. There is no CGT in the Seychelles.
• Inheritance tax: None. The Seychelles does not levy succession or estate duty.
• Wealth tax: None.

For an international investor whose income and gains are primarily derived from non-Seychelles sources — as is typically the case for an internationally mobile HNW individual — the Seychelles tax position is effectively zero on investment returns. The local income tax (Business Tax) applies to Seychellois-source business income at a rate of 15% but is unlikely to be relevant to the passive investor.

The Seychelles currency is the Seychellois Rupee (SCR), which is pegged to a basket of currencies (primarily the US dollar, euro, and British pound). There are no currency controls for foreign investors.

Residency by Investment

The Seychelles Residency Programme offers permanent residency to individuals making a qualifying investment in Seychelles real estate of at least USD$1 million. This is one of the more accessible residency-by-investment thresholds in the world, and it comes with permanent residency status rather than a temporary permit.

The programme is administered by the Seychelles Investment Board (SIB) and requires:

• Investment in qualifying real estate (freehold or long leasehold).
• A clean criminal record.
• Evidence of financial means independent of Seychelles employment.

Once permanent residency is established, the individual can live and work in the Seychelles. Naturalisation as a Seychellois citizen is possible after a period of continuous lawful residence (the Citizenship Act sets a general requirement of five years' residence, with a longer aggregate period applying to the investor route), subject to a language test and an integration assessment, and ordinarily requires renunciation of prior citizenship. The exact residence period applicable to your route should be confirmed with Seychelles counsel.

The Gainful Occupation Permit (GOP) provides an employment-focused residency route for those taking up employment with a Seychelles company or establishing a local business.

The Offshore Financial Sector

The Seychelles has developed one of the world's most widely used offshore financial sectors, centred primarily on company registration. The International Business Company (IBC) is the principal offshore vehicle, governed by the International Business Companies Act 2016 (a modernised replacement of the original 1994 Act). Seychelles IBCs are used globally for:

• Holding company structures
• Trading company vehicles
• Investment holding
• Intellectual property holding

The Seychelles IBC is characterised by low formation and annual renewal costs, rapid registration (often within 24–48 hours for straightforward structures), minimal ongoing reporting requirements, and broad flexibility in corporate governance.

The Seychelles Financial Services Authority (FSA) regulates offshore financial services, including IBCs, offshore banks, securities dealers, and foundations. The FSA has worked to bring the Seychelles into line with international standards, though the jurisdiction has at various times appeared on FATF grey lists — a material concern for those planning offshore structures.

FATF Compliance Status — Important Caveat

The Seychelles has been placed on the FATF grey list (enhanced monitoring) at various points, reflecting concerns about anti-money laundering and counter-terrorism financing (AML/CFT) compliance. Grey-list status affects correspondent banking relationships, the acceptability of Seychelles structures to counterparties and banks in other jurisdictions, and the overall credibility of Seychelles-based entities.

Before establishing a Seychelles-based structure, verify the current FATF compliance status of the Seychelles. If the jurisdiction is under enhanced monitoring, this will affect:

• The ability of Seychelles IBCs to open bank accounts in other jurisdictions.
• The willingness of EU, UK, and US financial institutions to transact with Seychelles-domiciled entities.
• The perception of the structure by home-country tax authorities.

Seychelles IBCs used in isolation — without access to banking in reputable jurisdictions — have limited utility. When the Seychelles is in FATF-compliant standing, these concerns are reduced; when it is under monitoring, they are acute.

The Company Special Licence (CSL)

The Company Special Licence (CSL) is a more regulated form of Seychelles company, available to companies that can demonstrate genuine economic substance and business purpose. CSL companies benefit from a reduced 1.5% corporate tax rate and access to certain DTAs that the Seychelles has concluded. The CSL requires ongoing substance, higher regulatory fees, and proper corporate governance — it is positioned for companies with real operations rather than pure holding structures.

Banking and Financial Services

The Seychelles banking sector is small. The main onshore banks include:

• Seychelles Commercial Bank (SCB) — government-owned; retail and commercial banking.
• Barclays Bank Seychelles (now operating as Absa Bank Seychelles) — retail banking.
• Habib Bank Seychelles — private banking and trade finance.
• MCB Seychelles — a subsidiary of MCB Group (Mauritius-based).

The offshore banking sector has faced challenges related to de-risking — international banks closing correspondent banking relationships with Seychelles-based banks due to compliance concerns. For HNW investors seeking sophisticated private banking, the Seychelles itself may not be the ideal banking domicile; combining Seychelles residency with banking relationships in Mauritius, Singapore, or the Channel Islands is common.

Lifestyle: The World's Most Beautiful Islands

The Seychelles' lifestyle appeal is beyond dispute. The three main inhabited islands — Mahé (where Victoria, the capital, is located), Praslin, and La Digue — are among the most beautiful in the world. The beaches at Anse Lazio (Praslin) and Anse Source d'Argent (La Digue) appear consistently on global rankings of the best beaches on earth.

The Seychelles has a small resident population of approximately 100,000, with a notably multicopolitan character drawing on African, Asian, French, and British heritage. English and French are both official languages alongside Seychellois Creole, and daily life can be conducted entirely in English.

Connectivity is a real limitation. The Seychelles has direct air connections to Dubai, Nairobi, Johannesburg, Paris, and Singapore, but there are no direct flights to London. A journey from London to Mahé typically involves a layover in Dubai or Nairobi and takes 12–16 hours. For individuals whose businesses or family connections require regular travel to Europe or North America, this makes the Seychelles a challenging primary residence — though an excellent secondary or retirement destination.

Healthcare is a limitation. The public healthcare system is available to residents, but for serious or complex medical conditions, residents typically travel to India (particularly Bangalore or Mumbai), South Africa, or the UAE. The Seychelles Hospital in Victoria provides general services, and private clinics on Mahé provide reasonable routine care. Medical insurance with international evacuation coverage is essential.

Education: The Seychelles has a reasonable state education system, but international private schooling is limited. Aga Khan Academy Seychelles opened in 2013 and offers an internationally recognised curriculum. Families with children at secondary level may find the educational provision constraining for elite university preparation.

Compliance and Transparency

The Seychelles participates in CRS (from 2017) and is FATCA-compliant. The FSA maintains beneficial ownership registers. Offshore structures are reported to the relevant home-country tax authorities. As with all modern offshore jurisdictions, the assumption of transparency should be the starting point for any planning.

Important: Tax laws change, and individual circumstances vary significantly. Nothing in this guide constitutes tax, legal, or financial advice. The FATF compliance status of the Seychelles is particularly important and should be verified at the time of any planning decision. Offshore structures require proper legal and tax advice in both the Seychelles and the investor's home jurisdiction. Investments can fall as well as rise; you should seek independent professional advice before making any financial decisions.

How Global Investments can help

Global Investments advises internationally mobile HNW individuals considering the Seychelles for residency, offshore structuring, or property investment. We can introduce you to Seychelles-based lawyers, company service providers, and bankers, alongside UK and international tax specialists who can ensure any Seychelles-connected planning is fully compliant. Contact us to arrange an initial discussion.