On 6 August 2021 the Seychelles introduced amendments to the legal framework governing International Business Companies (IBC) with the IBC (Amendment) Act 2021 (Act 32 of 2021). This newsletter article summarises a few, noteworthy changes relating to the dissolution of companies, the Register of Directors, accounting records, annual financial summary, additional amendments introduced, and how ServPRO can help you and your Seychellois IBC comply with the revised legislative framework.
Dissolution of Companies
In order to reduce the number of companies that have been struck off the register, Section 275 of the IBC Act 2016 (Act 15 of 2016) has been amended to provide that companies, which have remained struck off for a continuous period of minimum one (1) year, will be deemed to have been dissolved with effect from 1 January 2022.
Register of Directors
Section 150 of the IBC Act 2016 has been amended to specify the information required to appear in the Register of Directors, depending on whether the director is an individual or an entity.
Individual Directors: In cases where the director is an individual, this information comprises of her/his (i) date of birth, (ii) nationality, (iii) address for service of documents, and (iv) if different, usual place of residence.
Company Directors: In cases where the IBC director is a corporate entity, this information comprises of its (i) date of incorporation or registration, (ii) place of incorporation or registration, and (iii) registered office.
Compliance: There is a twelve (12) month period from the commencement of the IBC Amending Act 2021 for compliance with the aforesaid provisions and a discretionary penalty fee not exceeding US$10,000 for breach thereof by the company and the directors concerned (Section 150).
As from 6 February 2022 every company must keep/send its accounting records on a bi-annual basis at the company’s registered office in the Seychelles (Section 175).
Bi-annual basis: According to the Seychelles Financial Services Authority (FSA), accounting records relating to transactions or operations in the first half of the calendar year (January-June) must be kept/sent as aforesaid by July of that year, while the corresponding accounting records for the second half (July-December) must be kept/sent by the following January (FSA Circular 9/2021).
Existing records: Existing accounting records relating to transactions or operations in the past seven (7) years to 31 December 2021 must be kept/sent in the Seychelles by 6 February 2022 (FSA Circular 9/2021).
Grace period: Granted until 6 February 2022, this grace period applies only in relation to the location of where the accounting records are to be kept (i.e., section 175) and not in relation to the obligation to keep accounting records per se (i.e., section 174).
Inspections: It is expected that, as from February 2022, will initiate on‐site compliance inspections to ensure that reliable accounting records are being kept by legal persons and legal arrangements in the Seychelles and, where non‐compliance is identified, relevant sanctions will be applied.
Additional amendments: to the IBC Act 2016 relating to accounting records include the preservation of company records (new Section 169A), the keeping of the accounting records by the company and its directors (Section 174), and the location and preservation of the company’s accounting records with new definitions for “large company” and “holding company” (Section 175).
Annual Financial Summary
Certain companies (except IBC which are small, non-large holding companies) must prepare a Financial Summary on an annual basis to be kept at its Seychellois registered office, together with the other accounting records and underlying documents, within 6 months from the company’s financial year end (Section 175). It is anticipated that the FSA will provide further guidance regarding the content of the Annual Financial Summary in due course.
The IBC Amending Act 2021 further introduced amendments to the IBC Act 2016 relating to, amongst others, the company name suffix (Section 25), written consent for directorship, alternate or reserve directorship (Section 134), authentication or attestation of company documents (Section 41), penalties for non-compliance with Register of Members requirements (Sections 104 and 106) with Register of Directors filing requirements (Section 152) and with requirements for keeping directors’ minutes and resolutions (Section 157), preservation of records (new Section 169A), annual returns (Section 171), restoration of struck off or dissolved companies to the Registrar (new Section 276(1C)) and to the Court (new Section 277(4A)), and procedure for duplicate certificates (new Section 352A).
How ServPRO can help you and your Seychellois IBC
If your IBC is in any way affected by the entry into force of the International Business Companies (Amendment) Act 2021, please contact us at your earliest opportunity in order for us to assess the impact of these changes to your IBC and ensure compliance with the applicable legislation.
For more information on this topic contact us by telephone (+35722021100) or email ([email protected]).