The International Business Companies Act 2016 was amended by the 2017 bill early this year and came into force retrospectively from 1 December 2016. The following is a brief overview of the key changes introduced by the amendment.
A company incorporated as an IBC is allowed to conduct business outside the Seychelles. However, it is subjected to several restrictions; for example, an IBC company cannot conduct banking business, business as an insurance, a reinsurance company or the business of providing the registered office for companies.
Amendment to Restrictions on Incorporation
Usage of leasehold property
Such companies are also prohibited from owning or leasing immovable property situated in the Seychelles (except where the IBC holds 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). But this has been slightly amended and now reads:
“Cannot own an interest in immovable property situated in Seychelles, or hold a lease of immovable property situated in Seychelles, except that it may hold a lease of Seychelles immovable property where books and records of the company are maintained”.
The Act lists out certain scenarios when an IBC will not be treated as carrying out business in Seychelles. One of them originally read that a company that owns or manages a vessel registered in the Republic under the Merchant Shipping Act, or an aircraft, so registered under the Seychelles Civil Aviation Authority Act, 2005 shall not be deemed as carrying out business in Seychelles. Post amendment, it reads:
“The company owns or manages a vessel registered in Seychelles under the Merchant Shipping Act and the vessel visits, carries out fishing activities…” etc in Seychelles.
Related link: Seychelles IBC Company Registration »
Amendment to Company Name
Previously, names had to end with “Limited”, “Corporation” or “Incorporated” (or Ltd, Corp, Inc (with or without a full stop)). Post amendment, the company names could also end with “Limited Liability Company” or “Company” (or LLC or Co (with or without a full stop)).
Amendment to Director
Deemed Director In Lieu of De Facto Director
The Amendment introduces the term “deemed director” in place of “‘de facto’ director” and now it reads:
“If at any time a company does not have a director, any person who manages, or who directs or supervises the management of, the business and affairs of the company is deemed to be a director of the company for the purposes of this Act.”
Delegation of Power to Committee
Some amendments have been made to the provisions relating to the delegation of powers to committee of directors or agents. This will require changes to be made to the M&A.
Appointment of Directors
Previously the act required directors to be appointed by subscribers within nine months from the date of incorporation. Post amendment, the subscribers of companies that were incorporated prior to the date of commence of the Act shall appoint their first director or directors within nine months from the date of commencement of the Act.
Consent in writing
The directors, alternates and reserve directors are required to submit a written consent accepting their appointment.
Amendments to Register of Directors
Additional Information to be Registered
The date of birth and nationality details of directors alternates, and reserve directors must now be entered in the register. In the case of corporate directors, the date and place of incorporation must be entered.
Companies have 12 months from the date of commencement of the Act to submit the address for service of notices and communications and the residential address of directors.
Subject to the transitional provisions, a company must file a copy of its register of directors within 30 days of the appointment of first directors or its continuation or conversion.
Amendment to Access to Register of Directors
The registrar shall have a copy of the register of directors and will not provide access to the information contained therein unless:
- in obedience to a court order;
- when compelled by the enforcement of the law;
- subject to the Registrar’s satisfaction that the information is being sought for the purpose of fulfilling an obligation under the Anti-Money Laundering Act, to a reporting entity as defined under the Anti-Money Laundering Act;
- to the registered agent of a company to which the register relates;
- to a specified third party upon authorization of the registered agent or a director of a company to which the register relates.
Amendments to Annual Return
Content of Annual Return
In the case of a former Act company
- an annual return for any year before 2018 provided by the company shall contain either the information referred to in the Sixth Schedule of this Act or the information referred to in section 119 of the former Act; and
- an annual return for 2018 onwards shall contain the information referred to in the Sixth Schedule of the Act.
Amendments to Production of Records
The registrar shall by means of a written notice require the company to produce all or any of its records (as defined in section 173) or copies thereof to be held at the company’s registered office, including (without limitation) any of the following records kept outside Seychelles –
- accounting records;
- minutes and resolutions of members kept pursuant to section 125; and
- minutes and resolutions of directors kept pursuant to section 156.
The Act clarifies that the liquidator may be an individual or body corporate.
The Act provides for duplicate certificates of incorporation, continuation or dissolution if the certificates are lost, defaced or destroyed.
Fines relating to failure to keep records have changed.The occasions when the registrar could strike off a company have been extended to include contraventions under the original 1994 Act.
The occasions when the registrar could strike off a company have been extended to include contraventions under the original 1994 Act.
The former Act companies have six months to comply with the provisions of the Act with respect to keeping of records and registers (the Act also clarifies what records and registers need to be kept namely, Register of Members, Register of Directors and company’s accounting records) and filing of annual returns and this ended in May 2017. Companies that are in the midst of the striking off process shall also comply with the requirement.
However, companies now have 18 months instead of 12 months (31 May 2018) to file the register of directors and meet the obligations relating to beneficial owners.
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Eric comes from banking background. He provides consultancy to local and foreign entities on the ideal market-entry strategies for setting up or expanding operations in Southeast Asia.
Eric also provides advisory to fund managers and family offices on structuring as well as applicable tax incentives. He has also set up many VCC structures for licensed fund managers.