The Financial Services Authority (“FSA”) would like to draw the attention of all International Business Companies (“IBCs”), Foundations, Limited Partnerships and Trusts (together referred herein to as “legal persons and legal arrangements”) on the new obligations relating to the keeping of accounting records brought about under the following new legislations (“2021 amendments) enacted on 06th August 2021.

The International Business Companies Act, Foundations Act, Limited Partnerships Act and Trusts Act require every legal person and legal arrangement to keep reliable accounting records that are sufficient to show and explain the legal person’s or legal arrangement’s transactions, enable the financial position of the legal person or legal arrangement to be determined with reasonable accuracy at any time and allow for financial statements of the legal person or legal arrangement to be prepared. For such purposes, accounting records shall be deemed not to be kept if they do not give a true and fair view of the legal person’s and legal arrangement’s financial position and explain its transactions.

In terms of the preservation of records, every legal person and legal arrangement shall preserve its accounting records for at least 7 years from the date of completion of the transactions or operations to which they each relate.

IBCs are now required to ensure that their underlying accounting records are maintained at their registered office in the Seychelles, including historical records going back 7 years prior to 31 December 2021 (i.e. all accounting records from 1 January 2015). These records are now required to be sent to the Seychelles registered office by the deadline of 6 February 2022.

“Accounting records”, in relation to a legal person or legal arrangement, is defined as documents in respect of the legal person’s or legal arrangement’s assets and liabilities, the receipts and expenditure of the legal person and legal arrangement and the sales, purchases and other transactions to which the legal person and legal arrangement is a party to. Following this definition, it implies that accounting records (including the underlying documents), can take on many forms and includes:

1. Bank statements
2. Receipts
3. Invoices
4. Vouchers
5. Title documents
6. Contracts and agreements
7. Ledgers
8. Any other documentation underpinning a transaction

In addition, and starting in 2022 and going forward, the following will also be required:

• Bi-annual reporting of accounting record to registered office (section 175(1A) and (1B) of the Amendment Act)
        - Every company on the Register is required to submit and keep its accounting records at the company’s registered office in the Seychelles on a bi-annual basis.
1. Accounting records relating to transactions or operations in the first half (January to June) of a calendar year must be kept in Seychelles by July of that year.
2. Accounting records relating to transactions or operations in the second half (July to December) of a calendar year must be kept in Seychelles by January of the following year.
• Annual financial summary required for large companies and non-large non-holding companies (section 175(1B) of the Amendment Act)
        - A large company (i.e., with an annual turnover above roughly USD3,750,000) or a non-large company that is not a holding company (i.e., not a company which only holds interests in other companies or assets), is required to prepare an annual financial summary to be kept at its registered office in the Seychelles within 6 months from the end of the company’s financial year.

A legal person or legal arrangement that is struck‐off, dissolved or deregistered must ensure that any outstanding accounting records are lodged at its registered office in Seychelles by January or July, following the date that it is struck‐off, dissolved or deregistered, in line with the above guidance.

Compliance Inspections

As of February 2022, the Registrar expects to initiate its on‐site compliance inspections to ensure that reliable accounting records are being kept by legal persons and legal arrangements in Seychelles, and where non‐compliance is identified, relevant sanctions will be applied and non-compliance will result in heavy fines and penalties ranging between USD2,000 to USD10,000 per breach.

Actions required

We recommend that you take immediate action to start collating the required accounting records from 1 January 2015 onwards and reach out to your usual Zetland contact if you have any questions.