At a conference held in the Seychelles this week under the banner "The Future of Offshore Centres in the Cyber Age", the Seychelles government promised its support in developing the islands into a world-class financial centre. In alliance with the Seychelles International Business Authority (SIBA), the Government has pledged to encourage the growth of the business and finance sectors by implementing the relevant legislation and strengthening the country's infrastructure.
The two-day conference opened on Wednesday, with a keynote address by acting President, Vice President James Michel. He stated that the Seychelles was committed to developing telecommunications and IT infrastructure, saying 'we want to continually improve the environment in which business over computer networks is conducted.' Mr Michel foresees a smooth transition in upgrading telecommuncations since his government's previous liberalisation policies and private sector investments have already led to increasing internet access for the country's residents, thereby providing a sound platform from which to launch further advances.
Physical infrastructure is another area in which the government intends to improve. Mr Michel said his government was aware that this is a vital component in enabling the Seychelles to become a major trading and redistribution centre: 'we are equally committed to the development of the East Coast Phase III, the modernisation of the seaport, the International Trade Zone, the fishing port and the airport, supported by the necessary development of key utilities', he said.
One of the first pieces of legislation the goverment intends to enact involves a number of double taxation treaties in an effort to encourage investment flows through the islands. So far, the Seychelles has negotiated a double-tax treaty with South Africa, but it is not yet in force. The government sees such treaties as being an important part of its scheme to develop as a key financial hub in the Indian Ocean, and is actively negotiating more treaties with a number of its trading partners.
Mr Michel also commented on the recently published OECD and FATF reports that have "named and shamed" a number of offshore tax havens for their "harmful" tax practices and inadequate anti-money laundering controls. This questioning of tax havens' integrity, says Mr Michel, has tainted other offshore tax centres which are now suspected of illegitimate practices. He explained: 'my government has been vocal in its support of legitimacy of offshore finanical services. We have argued the case for Seychelles and made the commitments necessary to significantly remove these damaging preconceptions ... I have also ensured that we offer the strongest support to the Commonwealth's efforts at the Finance Ministers Meeting in Malta this week in support of offshore financial centes in the Commonwealth.'
Currently, the Seychelles has no international treaties relating to the exchange of information, but the double tax treaties it is negotiating will include such clauses based on the OECD model. However there are a number of pieces of domestic legislation in force, including the Mutual Assistance in Criminal Matters Act 1995, the Anti-Money Laundering Act 1996, and most of the sectoral 'offshore' Acts which accept the need to provide information internationally when criminal behaviour is suspected.
During the conference, the delgates discussed the need for improved mutual understanding and support between the smaller specialised offshore centres and their markets - particularly with the opening up of e-commerce. Many papers were presented detailing the issues surrounding taxation, e-business, insurance, banking and legislation. Subjects covered were the impact of e-commerce on international companies, strategies of cross border e-businesses, captive insurance and offshore internet banking services.
As well as representatives of the Seychelles business sector, attending the conference were around 100 delegates, many of whom were chief executives from international businesses. In total 27 countries were represented including Russia, the UK, Cyprus, France, Luxembourg, Mauritius, South Africa, Switzerland, the Netherlands, Hong Kong, Madeira, USA, Liechtenstein, and St Kitts & Nevis.
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