Tweets |
Opportunity Theft: Proverbial Fortunes.Mobile Banking is the New Frontier for Money Transactions.NSE to introduce more stock indices and a bond index.

Investing in Sychelles

SEYCHELLES

Area: 444 sq. km. (171 sq. mi.); about 2.5 times the size of Washington DC.

Major islands: Mahe and Praslin.

Cities: Capital--Victoria.

People

Population (July 2009 est.): 87,122.

Annual population growth rate (2009 est.): -0.02%.

Education: Public schools and private schools, compulsory through grade 10. Literacy--92%.

Health: Free government health services for all people. Life expectancy--male 68.3 yrs, female 77.9 yrs. Infant mortality rate--12.3/1,000.

Work force: 39,560 with 3,550 unemployed. Industries include tourism, fishing, manufacturing, and construction.

Government

Type: Multiple-party republic.

Independence: June 29, 1976.

Constitution: June 18, 1993.

Branches: Executive--president (chief of state and head of government). Legislative--unicameral National Assembly with 34 seats (25 directly elected and 9 allocated on a proportional basis). Judicial--Supreme Court, Appeals Court.

Suffrage: Universal at 17.

Economy

GDP (2009, official exchange rate): $656 million.

Annual growth rate (2009 est.): -8.7%.

Per capita income (2009 est., purchasing power parity): $19,400.

Average inflation rate (2009 est.): 34%.

Natural resources: Fish.

Agriculture: Copra, cinnamon, vanilla, coconuts, sweet potatoes, tapioca, bananas, tuna, chicken, teas.

Industry: Tourism, re-exports, maritime services.

Trade: Exports (2009 est.)--$366 million: canned tuna, frozen/fresh fish, frozen prawns, cinnamon bark. Imports (2009 est.)--$658 million. Major partners--U.K., France, Mauritius, Japan, Italy, Singapore, South Africa, Spain, Saudi Arabia.

Official exchange rate (2009): 14.2 rupees=U.S. $1.

Traditionally the economy of Seychelles was based on plantations with cinnamon, vanilla, and copra as the chief exports. In the 1960s, about 33% of the working population worked at plantations, and 20% worked in the public or government sector. The plantation sector of the economy declined in prominence, and tourism and fishing became the primary industries of Seychelles.

Since Seychelles' independence in 1976, per capita output in this Indian Ocean archipelago has expanded to roughly seven times the old near-subsistence level. Growth has been led by the tourist sector, which employs about 30% of the labor force and provides more than 70% of hard currency earnings, followed by tuna fishing. In recent years the government has encouraged foreign investment in order to upgrade hotels and other services. At the same time, the government has moved to reduce the dependence on tourism by promoting the development of farming, fishing, small-scale manufacturing and most recently the offshore sector. The vulnerability of the tourist sector was illustrated by the sharp drop in 1991-92 due largely to the Gulf War. Although the industry has rebounded, the government recognizes the continuing need for upgrading the sector in the face of stiff international competition. Other issues facing the government are the curbing of the budget deficit and further privatization of public enterprises.

INDUSTRY

Many of the other industrial activities are limited to small scale manufacturing, particularly agro-processing and import substitution. Agriculture (including artisanal and forestry), once the backbone of the economy, now accounts for only around 3% of the GDP. The public sector, comprising the government and state-owned enterprises, dominates the economy in terms of employment and gross revenue, employing two-thirds of the labor force. Public consumption absorbs over one-third of the GDP

OFFSHORE OIL AND GAS

New detailed studies and exploration shows that the Seychelles potentially have large off-shore petroleum reservoirs which are yet to be discovered. Drills have proven the presence of:

1.     Oil-prone

2.     Mixed source rocks

3.     Gas

4.     Hydrocarbon

5.     Clastic

However, to date all exploratory and stratigraphic test wells (a total of 9 since the 1970s) in the Seychelles have failed to find commercial hydrocarbons. The most recent wildcat by Enterprise Oil in 1995 detected gas but failed to find hydrocarbons.Several oil and gas exploration companies are active in the Seychelles offshore. These include East African Exploration (EAX), Avana Petroleum and Petroquest.

Beginning at the turn of the millennium the Seychelles Petroleum Company (SEPEC) started to develop the first fleet of modern petroleum double-hull tankers (five vessels), which was completed by late 2007/early 2008 with the possibility to build more in the near future. The Seychelles President claims that this has opened the door to a new industry for his country and encouraged economic growth by further removing over-reliance on traditional trades like fisheries and tourism, which is now falling rapidly as the country's main income but nevertheless, has experienced significant growth in recent years.

FINANCIAL SERVICES

In addition to the now booming tourism and building/real estate markets, Seychelles has renewed its commitment to developing its financial services sector. Government officials and industry participants believe this could overtake the tourism industry as the chief pillar of the economy by 2017. The recent passage of a revised Mutual Fund Act 2007, Securities Act 2007 and Insurance Act 2007 are meant to be the catalysts to move Seychelles from just another offshore jurisdiction to a full fledged Offshore Financial Center (OFC).

The Ministry of Finance is responsible for economic decisions and budgetary policy. A separate Monetary Authority supervises the banking system and manages the money supply. Although foreign banks operate branches in Seychelles, the government owns the two local banks—the Development Bank of Seychelles, which mobilizes resources to fund development programs, and the Seychelles Saving Bank, a bank for savings and current accounts.The Seychelles International Business Authority (SIBA) is charged with overseeing the quickly growing offshore industry. Seychelles is home to a number of offshore incorporation specialists which specialize in offshore company formation, mutual funds, hedge funds and captive insurance.

MINERAL INDUSTRY

The mineral industry of Seychelles consists mostly of production of such construction materials as clay, coral, sand, and stone.Seychelles is not a globally significant mineral producer or consumer. In 2006, imports of mineral fuels accounted for about 27% of the value of total imports.As of 2006, Seychelles was estimated to produce about 210,000 metric tons per year (t/yr) of gravel and crushed stone, 93,000 t/yr of granite, and 8,100 t/yr of sand. Civil Construction Company Ltd., Gondwana Granite, and United Concrete Products (Seychelles) Ltd. produce construction materials. These companies are privately owned.

 

AGRICULTURE

The agricultural sector consisted of state farms of the Seychelles Agricultural Development Company (Sadeco) and the outer islands managed by the IDC; three other large holdings producing mainly coconuts, cinnamon, and tea; about 250 families engaged in fulltime production of foodstuffs; and an estimated 700 families working on a part-time basis. Many households cultivate gardens and raise livestock for home consumption.

The total cultivable area of the islands is only about 400 hectares. Although rainfall is abundant, wet and dry seasons are sharply defined. Better irrigation and drainage systems are needed to improve food crops. The government has taken various measures to reduce dependency on imported foods, including deregulating production and marketing and reducing the trades tax on fertilizers and equipment. As a result, vegetable and fruit production climbed from 505 tons in 1990 to 1,170 tons in 1992. This increase failed to be matched by a commensurate decrease in imports of fruits and vegetables, which reached 3,471 tons in 1992. Local consumption had apparently increased, and substitution between imported and domestic foodstuffs was possible only to a limited degree. In most cases, imported produce is significantly cheaper in spite of air freight, import taxes, and other costs, necessitating a high import markup by the SMB to prevent disruption of domestic production. Neither rice, a dietary staple, nor other grains can be grown on the islands.

COCONUT OIL PRODUCTION

The expansion of livestock production is hampered by encroachment of housing and other development on agricultural land as well as by increased labor and animal feed costs. The number of cattle slaughtered in 1992 (329 head) was virtually unchanged from five years earlier. The slaughter of pigs (4,598) was about 45 percent higher than 1987, and chicken production (439,068) had risen by 60 percent.

The two traditional export crops of copra (dried coconut meat from which an oil is produced) and cinnamon have declined greatly because of the high cost of production and pressure from low-cost competitors on the international market. Vanilla, formerly important, is produced on a very small scale. Tea grown on the misty slopes of Mahé is a more recent plantation crop, serving mainly the local market.

TOURISM AND FISHING

Tourism is the most important nongovernment sector of Seychelles' economy. About 15 percent of the formal work force is directly employed in tourism, and employment in construction, banking, transportation, and other activities is closely tied to the tourist industry. Tourists enjoy the Seychelles' coral beaches and opportunities for water sports. Wildlife in the archipelago is also a major attraction.

In 1971, with the opening of the international airport, tourism became the dominant industry.Tourism is one of the most important sectors of the economy, accounting for approximately 16.6% (2000) of GDP. Employment, foreign earnings, construction, banking, and commerce are all dominated by tourism-related industries. Tourism earned $631 million in 1999-2000. About 130,046 tourists visited Seychelles in 2000, 80.1% of them from Europe (United Kingdom, Italy, France, Germany, and Switzerland).

The direct contribution of the tourism sector to GDP was estimated at 50 percent, and it provides about 70 percent of total foreign exchange earnings. Although difficult to measure, the import content of tourism expenditures is high, so net tourism earnings are significantly lower.[2] 130,046 tourist arrivals were recorded in 2000, including over 104,000 from Europe. In the same year, Seychelles had 2,479 hotel rooms with 5,010 beds filled to 52% capacity. Tourist income was US$112 million in 1999. In 2002, the US Department of State estimated the average daily cost of staying in Seychelles at $246 per day.

FISHING

In 2000, industrial fishing surpassed tourism as the most important foreign exchange earner. Manufacturing, construction, and industrial fishing, notably tuna fishing, account for about 28.8% of the GDP. Earnings are growing annually from licensing fees paid by foreign trawlers fishing in Seychelles' territorial waters. In 1995, Seychelles saw the privatization of the Seychelles Tuna Canning Factory, 60% of which was purchased by the American food company Heinz. Similarly, some port operations have been privatized, a trend that has been accompanied by a fall in transshipment fees and an increase in efficiency. Overall, this has sparked a recovery in port services following a drastic fall in 1994.

Investment Opportunities                                           

Given its strategic location in the South-Eastern Indian Ocean, its political stability and the legal and administrative framework in place, Seychelles is no doubt the ideal investment destination for serious investors. There are a lot of investment opportunities in a wide range of sectors such as

 1. Tourism,

2. Industry,

3. Agriculture

4.  Fishing and fish processing,

5. Oil exploration,

6. Infrastructure,

7. IT, telecoms,

8.  General services

9.  Financial services

However, there are certain restrictions for foreign ownership of investment in Seychelles.

 

STARTING A BUSINESS IN SEYCHELLES

Registration Requirements Summary:

 

 

Procedure

Time to complete:

Cost to complete:

1

Verify uniqueness of company name

1-2 days

no charge

2

Deposit documents at Company Registry for stamp duty assessment

3-4 days

see comments

3

Pay stamp duties at the Registry

1 day

included in procedure 2

4

Obtain registration certificate

7-10 days

no charge

5

File particulars of the directors and company, and the registered office

7 days

SR 50 per document

6

Obtain business license

7 to 21 days

SR 1,000 (for retail)

7

Register for taxes at the business tax office

1 day

no charge

8

Register employees with social security division

1 day

no charge

9

Register with Employment Services Bureau

1 day

no charge

 

Share
Comments

comments powered by Disqus