Being under a process of several amendments to the IBC Act 1994, the government of Seychelles has eventually approved the enactment of the New IBC Act 2016 on 26
th July 2016.
The New IBC is an attempt to comply with the recommendations of the Organization for Economic Cooperation and Development (OECD) and Financial Action Task Force standards. As such, the New IBC Act is characterized by a strong and promising regulatory framework conducive to continued competitiveness and sustained growth for Seychelles, as an International Financial Services Centre.
Before bringing the Act into operation, the Minister will be consulting all relevant stakeholders in order to ensure that sufficient time is given for implementation of the new provisions. The draft new IBC Guidelines will be issued by the FSA for industry’s comments in due course.
The major policy changes under the new IBC Act are as follows:
1. The list of prohibited activities that an IBC shall not undertake has been extended to include carrying on securities business, mutual fund and gambling business as defined under the relevant Seychelles laws unless such activities are licensed or otherwise legally able to do so under the laws of each country in which the IBC carries on such business.
2. Every IBC will be required to keep a beneficial ownership Register at its registered office in Seychelles (exemption applies for listed IBCs and subsidiaries of listed IBCs).
3. All IBCs will be required to file with the Registrar a copy of its register of directors. Every IBC shall have a period of 12 months from the Act commencement date to file a copy of its register of directors with Registrar and the filed register will be made publicly accessible after two years following the Act commencement date.
4. Annual return provisions will replace annual declaration of compliance. Annual returns will include details of where accounting records are kept, place where minutes and resolutions of directors meetings are kept and will also state that information will be made available to the Registrar upon request.
5. Clear provisions have been introduced to prohibit an IBC from issuing bearer shares.
6. New provisions have been introduced in respect of aged shelf companies. The new Act provides that the first director(s) must be appointed within 9 months of the date of the company’s registration.
7. The striking‐off process has been reduced from 180 days to 90 days.
8. The new Act provides for Protected Cell Companies, reserve directors, optional registration of the company’s register of members and beneficial owners, optional filing of annual financial statements with the Registrar and disqualification of a director by the Court.
9. The fine under the general offence provision and the fine for making false statements to the Registrar have been increased to $50,000. The penalty fee for failure to keep accurate Register of Members has been increased to $500 and $50 per day thereafter. A new provision has also been included to require the Registrar, before imposing any penalty fees under the Act, to give the person concerned the opportunity to be heard.
10. An IBC will no longer be able to hold bonds, treasury bills and other securities issued by the Government of Seychelles or the Central Bank of Seychelles.
11. IBC’s will no longer be permitted to hold a lease of property for use as an office from which to communicate with members or where books and records of the company are prepared or maintained.
12. The new Act clarifies that an IBC may own or manage a vessel registered in Seychelles under the Merchant Shipping Act and the vessel may visit or be situated in Seychelles waters, provided that the IBC shall not carry on any business in Seychelles including, without limitation, fishing, charter or tourism business involving the vessel.
13. The IBC search fee has been reduced from $100 to $10.
14. A person aggrieved by a decision of the Registrar may, within 90 days of service of notice of the decision of the Registrar, appeal against the decision to the Appeals Board established under the Financial Services Authority (Appeals Board) Regulations, 2014.
We urge everyone to take note of the increase of fees on the fines that will be implemented when companies are not fully compliant - due reference to filing your annual declarations on time and ensuring all resolutions for the Accounting Records are provided and any changes to this to be provided immediately.
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