12 Oct Past the sandy beaches: A thriving financial center
Close cooperation between regulators and the private sector gives the country an edge
In recent years Seychelles’ financial services sector has enjoyed rapid growth, fostered by a robust regulatory and compliance framework that is overseen by the Financial Services Authority Seychelles (FSA). This has allowed the country to strike the right balance between global best practices and international requirements. With the industry continually developing, the country is aiming to upskill, train and attract the talented workforce that can continue to drive the sector on an upward trajectory. This has led to a number of private consulting firms opening in recent years, such as C&J Qapital, which provides a variety of corporate services and has quickly amassed a strong client base.
Formed in 2021 and quickly obtaining a license from the FSA, the company saw the potential of the sector in Seychelles and now offers bespoke services such as offshore company formation, private foundations, mutual hedge funds, digital exchanges, licensing for forex trading and crypto-related activities.
“The financial services industry is a very good sector to be in. It’s a very important industry that Seychelles counts as the third pillar of its economy after tourism and fishing,” says the CEO and co-founder of C&J Qapital, Alexander Chang-Sam. “There is always demand in this sector and we have evolved away from the traditional offshore service to include a variety of offerings. The country has also become a very trustworthy and compliant jurisdiction and that is always one of the selling points to our clients. When clients meet with us and understand how robust and stable the economy is, and how strong our jurisdiction is, then a lot of them restructure their businesses in Seychelles or start up a new company here.”
Committed to good tax governance
One factor that has significantly helped grow the financial services sector was the European Union’s decision in 2021 to remove Seychelles from Annex I of the list of non-cooperative jurisdictions for tax purposes, commonly referred to as the EU Blacklist. This move, coupled with the work being done by the FSA, has helped the country to prove that it is a compliant jurisdiction. “We continue to have strong dialogue and frequent meetings with the FSA, legislative leaders, the governor of the central bank and Minister of Finance. These open discussions have helped us to prove to potential clients that there is an ease to doing business in Seychelles, and provides confidence to international watchdogs,” says Chang-Sam.
“Plenty of progress has been made by the country in the financial services sector. For example, we now have a territorial tax system for Seychelles International Business Companies, which is exactly the same as Singapore. We have a modern beneficial ownership legislation and we updated our anti-money laundering acts. Developing this sector became a national priority when the COVID-19 pandemic hit and the government became determined to make the financial services industry more robust and attractive. This has made it easier for us to bring more services to our clients and show them why Seychelles should be trusted.”
The FSA is also determined to show that Seychelles can become an internationally recognized financial services hub and has been working closely with industry leaders to ensure the best practices are in place and new innovative products are offered. “Things can move quickly here, so if we want to pass new legislation, we can do it. We can bring new products and services to market rapidly,” says Patrick Payet, chairman of the FSA. “We are working hard to ensure that the world sees that we are a jurisdiction where we like businesses to be compliant. We want serious businesses to come here and that is why we are putting the necessary framework in position. All the laws are in place to ensure that we remain an effective regulator. We are constantly developing our skills and we have capable staff to help us accomplish our mission and our vision to make Seychelles a modern financial services sector that is extremely well regulated.”
With the help of the FSA, C&J Qapital has been able to expand its offering and now helps clients manage offshore trusts, offshore companies and estate planning. Chang-Sam is confident that there will be more international companies looking to establish a foothold in the country.
“Discussions are also ongoing on a Virtual Asset Service Providers License to regulate crypto business, a development we are monitoring closely. Another product the FSA is promoting is the free-zone companies for clients that deal in exports, imports and manufacturing. The Indian Ocean Tuna Limited, which is owned by the Thai Union, for example, is located in the free zone and we’re sure more investors will be looking to register there so we will be able to assist them,” he says. “We do need to develop our free zones to bring in more foreign investors and the FSA is looking into doing that. We are also going out there to promote Seychelles and the financial sector. I have participated in FSA roadshows in Dubai and it’s good to be proactive as we can highlight the many other licenses available, such as mutual funds, forex broker license or securities dealers, and why companies should look at Seychelles instead of traditional places like the British Virgin Islands and Cayman Islands.”
Further growing the sector
While C&J Qapital currently works with numerous business-to-business clients, such as accounting firms, banking institutions and asset management companies, Chang-Sam is keen to onboard startups and entrepreneurs. “I believe there will be foreign investors looking to open their headquarters or have an office in Seychelles,” he states.
“Tourism has always been a strong industry here and we have a lot of investment coming in this sector with several big hotel chains opening up new properties. It’s not just tourism either. We have aquaculture and the blue economy, both of which are areas that foreign investors are looking into. Another one is agriculture, as we still depend a lot on imported food. The potential market here is huge so we hope to grow substantially over the next ten years.”
Having previously worked in the financial services industry in Mauritius and the United Arab Emirates, Chang-Sam amassed a wealth of knowledge and chose to return to Seychelles after witnessing the remarkable growth in the sector.
“Although we are a relatively new company, myself and my partner have more than 20 years of experience in the industry,” he explains. “Some investors still just see the country as a holiday destination but it has a strong and robust financial services sector. People are now beginning to look past the sandy beaches and I would encourage any entrepreneur or clients who are looking for a stable jurisdiction to set up or to continue their business to seriously consider Seychelles.”
The task of attracting overseas clients is helped by the work being done by the FSA, such as in 2021 when the country changed its International Business Companies Act and amended its Beneficial Ownership Act to allow the country to be reassessed.
“One of our key priorities has been to ensure we have proper laws and legislation in place,” concludes Payet. “That helped us to prove to the world that we are an effective regulator and that if you invest your money in Seychelles, it will be protected. Because of this, we are certain that we will see more growth throughout the sector.”