Seychelles to set up company ownership registry in transparency drive

Monday, 18 July 2016 00:00 - - {{hitsCtrl.values.hits}}

NAIROBI (Reuters): Seychelles will legislate this year for a central registry to record ownership of offshore companies, a move to meet new international standards that seek to counter money laundering, the finance minister said.

In Seychelles, as in many other offshore financial centres, individual corporate agents hold details on ownership of the thousands of offshore firms, known as International Business Companies (IBCs), registered on the Indian Ocean archipelago.

Experts say this can add to the complications facing any investigator seeking to trace ownership, even though agents are required to hand over details at the request of the authorities.

The Financial Action Task Force, a global body that recommends policies to combat money laundering and corruption, has called for nations to make it easier to trace beneficial owners. A central registry is one such step.

Finance Minister Jean Paul Adam told Reuters legislation had been drafted “that makes provision for registry of beneficial ownership” that would go before the National Assembly, or parliament.

“The legislation will be passed before the end of this year,” he said, adding that other changes to laws covering all companies in Seychelles, not just IBCs, were also going ahead.

“We want any company that establishes itself in Seychelles to feel confident that it is ... operating in an environment that offers world-class compliance and regulation,” the minister said in a telephone interview on Tuesday.

The Seychelles has sought to reduce its reliance on tourism by promoting itself as a financial services centre, offering a low-tax environment for companies registered on its territory.

According to OECD ratings in 2014 on compliance on transparency and exchange of information for tax purposes, Seychelles is listed as “Largely Compliant”, the same rating as jurisdictions such as Britain and Singapore. Britain said last year it would set up a central register by June 2016.

Executives in the Seychelles offshore industry say that since 1994 about 140,000 firms have been incorporated on the archipelago, which has fewer than 100,000 inhabitants.

But many firms have been struck off since then, they say, either at the request of owners or for failing to pay fees.

The financial services business now accounts for about 5% of Seychelles gross domestic product, compared with more than 30% for tourism and 10% for fisheries.

The minister said financial services would grow but the focus would shift from incorporating companies to more value-added business, such as setting up investment vehicles to channel funds from Asia to Africa.

“The future should very much be about being a gateway between Asia and Africa,” he said, adding that Seychelles was focused on “moderate growth” in the industry to ensure standards and regulations kept pace.