The Seychelles Financial Services Authority (Financial Services Authority) enacted a new law imposing new accounting requirements on International Business Companies (IBCs), i.e., offshore companies established in Seychelles, effective August 6, 2021.
（＊）Although implemented in August, the guidelines were finalized recently, so contact will be delayed by several months for clients.
Currently, all International Business Companies (offshore companies established in Seychelles), foundations, limited partnerships, and trusts in Seychelles are required to keep accounting records (Accounting Record) and prepare/store accounting documents (e.g., financial statements) covering the most recent 7 years that accurately prove financial status.
Under these new accounting requirements, all International Business Companies (IBCs), i.e., offshore companies established in Seychelles, are now obligated to keep accounting records for the past 7 years dating back from December 31, 2021, at a local registered agent office in Seychelles. This covers 7 years from January 1, 2015 to December 31, 2021. The deadline is February 6, 2022, by which time accounting records for 7 years must be submitted to the local registered agent.
Accounting Records (Accounting Record) refer to documents reflecting a company's assets and liabilities, including the following documents related to business transactions such as receipts, expenditure proofs, sales invoices, and purchase orders:
- Bank statements
- Receipts and slips
- Invoices and purchase orders
- Vouchers
- Title deeds
- Contracts and agreements
- Ledgers
- Other documents related to transactions
Additionally, starting in 2022, the following conditions are mandated:
- Accounting records must be submitted to the registered agent office every six months (Applicable Law: section 175(1A) and (1B) of the Amendment Act)
All Seychelles companies are required to submit accounting records to the local Seychelles registered agent office once every six months.
- Accounting records from January to June must be submitted to the Seychelles registered agent office by July of the following month.
- Accounting records from July to December must be submitted to the Seychelles registered agent office by January of the following year.
- Mandate for creation and submission of Annual Financial Summary (Financial Statements): Applies to all companies other than pure holding companies, including large enterprises and SMEs (Applicable Law: section 175(1B) of the Amendment Act)
Companies with annual turnover of USD3,750,000 or more are defined as large enterprises. All companies engaged in business activities other than holding subsidiaries' shares, including large enterprises and SMEs, are obligated to create and submit/store annual accounting documents (e.g., financial statements) to the local registered agent office. The deadline is within 6 months from the end of the accounting period; they must be sent to the local agent.
(i.e., only pure holding companies with annual turnover of USD3,750,000 or less are exempt from creating and submitting financial statements)
Furthermore, this obligation applies even to companies that have been automatically struck off or dissolved. If the obligation arose by the date of automatic striking off or dissolution, compliance is required.
Inspection
Starting February 2020, Seychelles authorities plan to begin inspections to verify if corporate accounting records are properly stored at local registered agent offices. Non-compliant companies will face penalties of USD2,000～USD10,000.
Next Steps
Companies with entities in Seychelles need to prepare for collecting accounting records from January 1, 2015. Zetland provides advisory services compliant with accounting standards for clients with entities in Seychelles.
