Seychelles

The Seychelles is an archipelago in the Indian Ocean, east of Africa. The strategic geographic location of the Seychelles provides excellent time zones for major financial centres, particularly in the Middle East and Asia. Daily flights from most European, African and Asian jurisdictions make the Seychelles a natural convergence point for business.

General information

The official name of the country is the Republic of Seychelles. The state occupies an area of ​​459 km² (180th in the world). The population is about 101,820 people (as of the beginning of 2025).

The main ethnic group of the Seychelles inhabitants are Creoles, descendants of mixed marriages of first French, British, and later Indian and Chinese settlers with people from Africa, originally brought to the islands as slaves. There are also relatively large Indian, Chinese, Filipino and Malagasy communities.

90% of the country's population are Christians, mainly Catholics, there are also adherents of the Anglican Church. In addition, Muslims, Baha'is and Hindus live on the island.

The culture of the Seychelles is a mixture of French and African (Creole) influences. The local Seychellois Creole language, a mixture of French and African languages, is the native language of 91.8% of the population, but English and French are also widely spoken. English also remains the language of government and commerce.

The official currency of the country is the Seychelles rupee.

Victoria is one of the smallest capitals in the world, the only major port in the Seychelles and the only city in the country. Since 1841, the city has been called Port Victoria in honor of the Queen of Great Britain, and since 1960 - Victoria.

The basis of the city's economy is foreign tourism and fishing. Fish, coconuts, coconut oil, guano, spices and essential oils are exported from the country through the city port. The depth and size of the seaport allow it to receive several large-tonnage vessels at the same time. The inner waters of the port serve smaller vessels. Food industry enterprises operate in Victoria - among other things, fish processing and beer production. In addition, there is furniture and tobacco manufacturing and handicrafts. The city is the country's main business center.

The Republic of Seychelles is administratively divided into 25 districts, all of which are located on the Seychelles group of islands proper, also called the "Inner Islands" or "Granite Islands". The "Outer Islands" (Coral Islands, Seych. Zil Elwannyen Sesel) are not divided into districts, thus being an unincorporated territory.

History, geography, culture, mentality

The Seychelles Islands were known to Arab and Indian sailors as early as the 8th-9th centuries. They appeared on Portuguese nautical charts in 1505, but remained uninhabited until the mid-17th century.

In the 17th-18th centuries, the archipelago was favored by pirates who attacked merchant ships sailing from India to Europe, rounding the southern tip of Africa. In 1742, the French governor of Mauritius, Mahé de Labourdonnais, sent the first expedition to the Seychelles (the largest island of the archipelago, Mahé, was named after him). The second expedition of 1756 secured these lands for France and gave them their current name in honor of the French Controller General of Finances under King Louis XV, Jean-Moreau de Sechelles. The French settlers who settled on the islands after that were engaged in agriculture and coastal fishing, and the economy was based on the use of slave labor.

During the French Revolution and the Napoleonic Wars, the Seychelles repeatedly passed from the French to the British and back. The archipelago was finally transferred to Great Britain under the Paris Peace Treaty of 1814. After England abolished slavery in 1835, immigration to the islands of Indians and Malagasy people was encouraged, who were engaged in the production of coconut oil for export, and the cultivation of tobacco, sugar cane, cotton, and vanilla. Later, due to changes in the market situation, copra became the main export commodity.

The opening of the Suez Canal in 1869 radically changed the direction of trade routes in the Indian Ocean: now ships did not have to go around Africa to travel from Europe to India. The Seychelles found themselves on the sidelines of new sea routes and the economy on the islands began to decline.

After World War II, in accordance with the British Act "On the Development and Welfare of the Colonies", a ten-year program of infrastructure development in the Seychelles was launched - construction of roads, schools, hospitals, etc. Additional jobs and budget revenues were provided by the operation and maintenance of the American military space tracking station, which operated on Mahe Island from 1963 to 1996.

Interesting fact: until 1970, the only means of communication between the islands and the outside world was a steamship that sailed between Mombasso (Kenya) and Mumbai (then Bombay) in India, calling in Victoria. In 1971, the British completed construction of an international airport on the main island, and construction of a deep-water seaport began at the same time.

On June 29, 1976, with the declaration of independence from Great Britain, the Republic of Seychelles was formed.

In 1993 — a new constitution and a transition to a multi-party system of government were adopted.

The Seychelles Islands are located in the western Indian Ocean, slightly south of the equator, approximately 1,600 km east of the African continent, north of Madagascar.

The Republic of Seychelles includes 115 islands, only 33 of which are inhabited. According to their geological structure, the Seychelles are divided into granite (part of the Mascarene Plateau) and coral, and according to their geographical features, the islands are divided into the Inner (Seychelles proper, mainly granite) and Outer (coral).

The 42 islands of the granite group, with a total area of about 243.7 km², include the Mahe Islands (142 km², the highest point of the entire archipelago is 905 m), Praslin (45 km²), La Digue, Silhouette, etc. All the granite islands are no more than 50-70 km away from Mahe. Most of the settlements and the main economic activity in the archipelago are concentrated on the coasts of these islands.

The coral islands are flat atolls with a total area of about 211.3 km², rising above sea level by only 4-8 m.

For several centuries, the Seychelles Islands have seen a mixture of national traditions, crafts, and customs of the local aborigines (mainly from the countries of the African continent and Madagascar) and white settlers (mainly the French and the English), who brought with them their European cultural values. The peoples of nearby Asian states, primarily India, also had an undoubted influence on the cultural process. These influences are clearly visible in the arts, cuisine, music, dance and architecture.

The lion's share of influence comes from French culture - with its love of freedom, hedonism and gourmandism. French planters - the old residents of the archipelago - brought the traditions of their country of the 18th and 19th centuries to the culture of Seychelles.

The Creoles, the indigenous inhabitants of the Seychelles, are calm and friendly people, always smiling and extremely polite. They do not tolerate fuss and haste, are kind to tourists and each other, and if there is mutual sympathy, they invite you to visit. If you want to accept their invitation, take a small gift for family members: this is the custom here.

The turbulent colonial past of the Seychelles is reflected in the heterogeneity of the religious composition of the islands' population, which has influenced the culture of the state. Catholic holidays are celebrated here on a grand scale. At the same time, local residents believe in spirits and magic. In the life of the islanders, traditional magic "gris-gris", similar to the mysterious cult of voodoo, occupies a huge place. Another type of local healing "Petit Albert" dates back to the French settlers. There are also local sorcerers on the Seychelles Islands - “soresie”. Slaves of African origin, brought from different parts of the continent, forgot their language, but did not forget the shamanic traditions, which mixed with Catholic beliefs. 

The islanders are a musical people, they love to sing and dance. During the dance, they use masks and traditional musical instruments - zez, bonm, makalapo and tamtam, which sets the rhythm for the entire dance. In frequent performances, you can see the national dance mutia, which came to the Seychelles from Africa along with refugees. Mutia is a rhymed chant with rhythmic movements.

Power

Seychelles is a presidential republic. The President is elected at general elections for a term of 5 years (maximum two terms), his powers are limited by the right of veto of parliament and the institution of impeachment. He is the head of government, the commander-in-chief, and oversees issues of justice and government bodies.

The Vice President is elected at general elections together with the President. He is also the Minister for Information and Communications Technology and Information.

The government includes the President, Vice President and 13 ministers, one of whom is appointed as the Senior Minister. In the absence of other colleagues in the cabinet, the Senior Minister acts for them.

Legislative power belongs to the National Assembly - a unicameral parliament, currently consisting of 35 deputies (elected for a term of 5 years on the basis of universal suffrage). It is formed according to a mixed majority-proportional system: 26 deputies are elected in 26 districts, the remaining seats are occupied by people's representatives in proportion to the number of votes cast for the parties (10% of the votes in the elections are equal to one seat in parliament).

The judicial and legal system of Seychelles combines elements of British and French: the current Civil Code (came into force in November 2020) is based on the French "Napoleonic Code", while criminal justice is based on the norms of English common law.

Economy

Economically, the Republic of Seychelles is the richest country in Africa with the 2nd largest HDI (after Mauritius) and the highest GDP per capita in Africa. 

The specifics of the Seychelles economy are determined by the classic island type of national economy, limited human and natural resources, as well as the country's almost complete dependence on imported food and engineering products. The basis of the economy is tourism and the related service sector, the sale of fishing licenses in the Exclusive Economic Zone (mainly to EU countries), fishing, the production of canned fish (tuna), the export of frozen and chilled fish, the re-export of petroleum products, the production of alcohol, tobacco products and tea, and offshore activities.

The most important trading partners of Seychelles are: The United Kingdom, the European Union (the leading ones being Germany, Spain, France), China, India, the United Arab Emirates, South Africa and Saudi Arabia.

Due to its location and small size, the Seychelles has limited land resources for agriculture, with only about 3% of the total land area suitable for cultivation. The agricultural sector in Seychelles contributes about 2.9% to the country's GDP and employs about 2% of the workforce. The sector mainly focuses on the production of crops such as coconuts, vanilla, cinnamon, fruits and vegetables, as well as livestock, including poultry and pig farming.

Coconut farming is the most important agricultural activity in Seychelles, accounting for over 90% of the country's agricultural production. Coconut palms are grown for their oil and other by-products such as coconut milk and desiccated coconut. 

Vanilla is another important crop, accounting for about 5% of the country's agricultural production. Fruit and vegetable production is mainly aimed at meeting domestic demand, while livestock production mainly consists of small-scale poultry and pig farming.

The industrial sector in Seychelles is relatively small, accounting for about 13.5% of the country's GDP. The sector mainly focuses on the processing of local raw materials and the production of goods for domestic consumption. The manufacturing sector in Seychelles is mainly focused on food processing, which includes fish canning, meat processing, and the production of bakery, confectionery, and beverages. The sector also includes the production of textiles, clothing, and footwear, and the production of construction materials such as cement, bricks, and tiles. Overall, the manufacturing sector is estimated to contribute 5% of the GDP.

The services sector in Seychelles is the largest contributor to the country's economy, accounting for about 66.3% of its GDP. The sector is diverse and includes a number of activities such as tourism, financial services, trade, transport and communications. Tourism is one of the most important sectors in the services sector and contributes significantly to its foreign exchange earnings, providing employment opportunities for a large portion of the population.

The public sector, consisting of the government and state-owned enterprises, dominates the economy in terms of employment and gross income, employing 2/3 of the workforce. Government consumption accounts for over 1/3 of Seychelles’ GDP.

The financial services sector is also an important contributor to the country’s economy, as Seychelles has established itself as an offshore financial centre offering a wide range of services such as banking, insurance and investment management.

Trade and transport are other important sub-sectors in the services sector in Seychelles. The country’s strategic location in the Indian Ocean has made it an important transit point for goods moving between Africa, Asia and the Middle East.

Seychelles is a member of the following trading blocs: Common Market for Eastern and Southern Africa (COMESA), EU Interim Economic Partnership Agreement — Eastern and Southern African Partnership (iEPA), and the Southern African Development Community (SADC), a member of the African Continental Free Trade Area (AfCFTA).

In January 2019, Seychelles was one of four Eastern and Southern African (ESA) countries to sign the UK-ESA Economic Partnership Agreement, which maintains the trade preferences currently provided under the iEPA post-Brexit.

In April 2015, Seychelles became the 161st member of the World Trade Organization (WTO). Seychelles has signed 28 Double Taxation Avoidance Agreements (DTAAs).

 

Republic of Seychelles and Russia

Diplomatic relations between the countries, established on June 30, 1976, are traditionally friendly.

Currently, against the backdrop of stable political dialogue and successful interaction of both countries in international organizations, the volume of trade and economic cooperation is still small in absolute figures due to the underdevelopment of the domestic market and the narrow economic specialization of Seychelles, but there is potential for growth, especially with the planned restoration of the airline Aeroflot direct connection on the Moscow-Victoria route, promising not only an increase in passenger traffic, but also convenient logistics solutions for interested economic operators to organize the transportation of various commercial goods in both directions.

Currently, small consignments of building materials, chemicals (mainly additives for construction solutions), agricultural products (vegetable oil, chicken) are delivered from Russia to the Seychelles. A regular, but very insignificant in volume, item of Seychelles deliveries to Russia are seafood products.

Russian investments in the Seychelles economy are estimated at about 500 million US dollars. Large Russian businesses are represented in the country by the companies "Guta Group" (in 2007 it acquired the Coral Strand hotel, and in 2014 it commissioned the Savoy Resort & SPA hotel complex); an organization affiliated with the ONEXIM Group, which owns the Seychelles island of North Island with a hotel located on it; as well as one of the leading local fish processing enterprises, Oceana Fisheries, controlled by Russian investors. On Mahe Island, the Russians also own several small hotels and the large-scale Nouvelle Vallée complex under construction.

The presence of Russian capital in the country's offshore sector remains noticeable (according to unofficial data, more than 100 thousand foreign offshore companies are registered in the Seychelles, about 20% of which have Russian beneficiaries). Russians are also actively investing in Seychelles real estate.

Business climate

Seychelles is known as an offshore centre where international business companies have been registered since 1995. Seychelles legislation, in particular the International Business Companies Act of the Republic of Seychelles (1994), allows international corporations to be registered in Seychelles without having to pay tax.

The government is seeking to improve the business environment through public-private partnerships (PPPs) to upgrade the country’s infrastructure. The government is also currently reviewing the Companies Act of 1972.

The country has created a business-friendly environment and provides a number of investment incentives, including tax breaks, tax holidays, duty-free access to import materials required for initial investment, and fast-track work permits for expatriate employees who relocate to Seychelles. The country does not levy capital gains tax, income tax or personal income tax.

The government provides tax incentives in the form of value added tax exemptions on imported goods that promote the use of renewable or clean energy, conserve fresh or potable water, or recycle solid waste. In addition, businesses that use rooftop photovoltaic equipment to generate electricity can receive rebates from the government. The Seychelles government has also established Export Processing Zones (EPZs).

Investment climate

The Seychelles is working to attract foreign direct investment to support its economic development and growth.

Most of the FDI is in the tourism sector, with hotels, resorts and luxury housing (including the Eden Island development by South African investors, which includes over 500 apartments, villas and commercial units, or the Four Seasons Resort Seychelles on Desroches Island). The Seychelles also encourages investment in aquaculture projects, including fish farming and seaweed cultivation. Major investor countries include China, India, the UAE and France. The discovery of significant oil fields off the coast of the Seychelles is generating renewed interest from investors (exploration and exploitation licenses have been issued since 2013).

The Seychelles government has taken regulatory measures to create a favorable environment for foreign investment, such as a reduction in the corporate tax rate. In addition, a skilled workforce, an efficient legal system based on the Napoleonic Civil Code, and transparent access to various legal sources related to investment are advantages for investors. Attractive sectors for investment include tourism, construction, alternative energy, and the petroleum sector, as the country can rely on an exclusive economic zone (EEZ) of 1.3 million km².

Foreign investment is restricted in certain sectors in order to protect the public interest (including accommodation services up to fifteen rooms, car rentals, agricultural production, real estate agencies, travel agencies, etc.).

The Seychelles Investment Board (SIB) is the national one-stop gateway for the promotion and facilitation of investment in the country. The agency also assists in the screening of potential investment projects in collaboration with other government agencies.

Business and investment support structures

There are various structures and organizations in Seychelles that support business and investment. Some of them include:

1. Seychelles Investment Board (SIB). The main government body responsible for promoting and facilitating investment for both local and foreign entrepreneurs. SIB provides:

• Advice on investment opportunities.
• Support for business registration.
• Guidelines for submitting business plans and obtaining permits.
• SIB is the first point of contact for investors and provides support at all stages of project implementation.

2. Enterprise Seychelles Agency (ESA). Agency specializing in the development of micro, small and medium enterprises. ESA offers:

• Training programmes and workshops.
• Business planning advice.
• Support in accessing finance.
• ESA plays a key role in improving the productivity and sustainability of SMEs in the country.

3. Ministry of Investment, Enterprise and Industry. The ministry is responsible for formulating government policy in the field of investment and entrepreneurship development. It coordinates the work of SIB and ESA, and develops strategic initiatives to support business.

4. Central Bank of Seychelles (CBS). CBS regulates the country's financial system, supervises the banking sector and ensures macroeconomic stability. It also plays a role in the development of financial services, including the offshore sector.

5. Development Bank of Seychelles. A government-owned bank that provides financing for development projects in various sectors of the economy, including agriculture, fisheries and tourism.