Seychelles International Financial Services Association (SIFSA) Proposal on International Business Company (IBC) Act amendment

sifsa-proposal-on-ibc-amendment

Known for its flexibility, quick incorporation, inexpensive government fees, and strong legal structure, Seychelles can boast having one of the world’s fastest-growing company registrations. The Seychelles IBC (Seychelles International Business) is considered one of the most popular types of Seychelles offshore companies as it is widely used as a corporate vehicle for use as a special purpose vehicle, trading or investment company, holding company, etc. 

The conduct of business by IBC is governed by the International Business Companies Act of Seychelles which came into effect in December 2016. The law was drafted with the aim of modernizing Seychelles company law and further enhancing the country’s status as a financial and business center. 

A common question potential investors ask is “what are our accounting obligations?”. Under the current rules, there is no requirement to file Accounts nor Annual Company Returns for IBC’s. Potential investors see this as an advantage as this lessens the annual cost and adds privacy as the company’s records remain confidential.

However, the SIFSA proposed certain key amendments to the law which include the following:

1. Empower Registered Agents (RA) to request Accounting Records from entities 

Under the current rules, the RA’s do not have the power to request Accounting Records from the IBC’s. This rule makes it difficult for RA’s in monitoring the IBC’s compliance requirements. 

2. Allow entities to keep Accounting Records at the place as Director thinks sees fit, but the same must be made available on request of competent authorities, or RA.

Section 2 of the IBC act defines “accounting records” as documents relating to assets and liabilities of the company, including receipts and expenditures, sales and purchases and other transactions. If the records are not kept at the registered office, the IBC has an obligation to inform the registered agent. Although there has not been much change in this provision, the key amendment here is to make the accounting records available upon the request of the competent authorities or RA. 

3. Introduce requirements for RA’s to forward requests from competent authorities to the last known contact of the entities

It is noteworthy to remember that the existing IBC Act does not require RA’s to forward requests from competent authorities or any other serving papers to the organizations in question. As a result, there is a loophole in which RA’s who do not transfer official communication to the registered office address of the client’s last known contact, hence, face no sanctions. The Guidance shall also explain the documents that the RA’s shall request from the companies in a particular time period. Wherein accounting records are not made available within the deadline, non-compliance should be reported by the RA’s to Financial Services Authority (FSA) Seychelles. 

These are only some of the amendments proposed by the SIFSA in order to further improve the compliance and business environment in the country. Further developments may be expected but it is likely for the ease of doing business and added transparency. 

Seychelles is a great place to do business since it is both an offshore state and a regional economic hub. Because of its proactive and stable government, modern business orientation, and contemporary, reliable infrastructure, as well as its strategic location, Seychelles offers many advantages to enterprises in the offshore sector.

Start your Seychelles IBC registration with CRESCO, you’ll get quick support from our experienced team with local knowledge and will help you answer your overseas company’s day-to-day management questions. We offer a complete package depending on the nature and needs of your business – from incorporation, outsourced accounting to taxation services and compliance. 

To know more about our services, visit https://crescoaccounting.com or you can also tap our Seychelles IBC company incorporation partner – Hensley&Cook at https://hensleycook.com/ 

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Carl Grengia

Carl Grengia

CRESCO Accountant

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