Recently, the Seychelles government has issued new regulations to ensure that its jurisdiction complies with international regulatory standards. This article summarizes the latest amendments to the accounting records requirements of the International Business Companies Act 2016 (the "Company Act"), which regulates companies registered in Seychelles, as amended by the International Business Companies Act (2021 Amendment). It will take effect on August 6, 2021. Notably, the revised law includes new accounting recording obligations, which will have an impact on entities registered in Seychelles.
The Companies Act, together with the Funds Regulations (2021 Revision), the Limited Partnership Regulations (2021 Revision) and the Trusts Act, etc., requires each legal entity to keep at its registered office in Seychelles sufficient, in order to reflect the Accounting records of an entity's transactions, enable the entity to judge its financial position with reasonable accuracy at all times, and prepare the legal entity's financial statements.
Under the Companies Act, from February 6, 2022, legal entities must maintain accounting records in the following ways:
Biannual accounting record keeping
(1) Pursuant to section 175(1A) of the Companies Act, if the entity is (a) a holding company (meaning that the company has no trade or business operation of its own, but holds interests or assets in other companies); and (b) not a large corporation A company (according to the Tax Administration Act, a company with an annual turnover equal to or less than Seychelles Rupee 50,000,000) must keep the company's accounting records at its registered office in Seychelles twice a year.
(2) Accounting records of relevant transactions or operations for the first half of each year (January to June) must be kept at the company's registered office in Seychelles on or before July of that year; and for the second half of each year, 7 Accounting records of relevant transactions or operations from July to December must be kept at the company’s registered office in Seychelles on or before January of the following year.
Legal entities must have their accounting records related to transactions or operations for the past seven years from January 1, 2015 and ending on December 31, 2021 at its registered office in Seychelles on or before February 6, 2022.
Legal entities are required to deposit accounting records related to transactions or operations for the first half of 2022 (January to June) at their company’s registered office in Seychelles on or before July 2022.
Legal entities must keep accounting records related to transactions or operations for the second half of 2022 (July to December) at their company’s registered office in Seychelles by January 2023.
(3) While the amendments require legal entities to keep their accounting records at their registered office in Seychelles at least twice a year, please note that the legislation requires legal entities to keep their accounting records on an ongoing basis (i.e. at all times) and must keep their accounting records at all times, so that relevant accounting records can be provided to the Seychelles authorities upon request.
Annual financial summaries
An annual financial summary is required for every (a) large company and (b) non-large non-holding company. Under Section 175(1B) of the Companies Act, large companies and non-large non-holding companies must prepare an annual financial summary within 6 months after the end of the company's financial year, and keep the financial summary at its registered office in Seychelles.
Other Important Amendments to the Seychelles International Business Companies Amendment Act
All delisted companies will be deemed dissolved if they have been delisted for at least one year on 1 January 2022, unless the company is reinstated before the dissolution;
The delisted company will be automatically dissolved 1 year after being delisted (from January 1, 2022), unless the company is reinstated before that. In the past, a company could maintain the delisting status for 7 years;
The time for reinstatement of a delisted company or a dissolved company is shortened to 1 year and 5 years respectively;
A company being struck off or dissolved must ensure that its relevant accounting records are kept at its registered office in Seychelles before January or July of the same year as the date of removal or dissolution, or within 3 months from the date of removal or dissolution date, whichever is earlier.
The register of directors needs to include new information (if information has not already been entered into the register):
(1) For individual directors, their date of birth and nationality;
(2)For company directors, the date of incorporation or incorporation and the place of incorporation or incorporation.
If a solvent company goes into voluntary liquidation, its liquidator qualifications have been expanded except for individuals, and companies are now accepted as liquidators.
Increased penalties for non-compliant companies, especially those failing to maintain reliable accounting records and financial summaries at their registered office (fines of $2,000 to $10,000).
Amendments to other regulations
The Seychelles government has also passed other regulations: Seychelles foundations, limited partnerships and trusts are now also obliged to keep accounting records at their registered office or at the Seychelles trustee's office at least 7 years from the date of the transaction.
Action required
Since non-compliance will result in penalties and hefty fines, ranging from $2,000 to $10,000 per violation, we recommend that you take immediate action and start sorting out the accounting records you need from January 1, 2015.
