As one of the leading offshore financial centers in Africa, Seychelles has worked hard over the past few decades to build a reputation as a well-regulated jurisdiction for funds, banking, and securities operations serving clients globally. So when I heard the news that we had been added to the controversial EU “tax blacklist,” I couldn’t help but feel a sense of concern about how this could impact the future development of our capital markets.
Seychelles International Hub
Our strategically located group of islands has become a hub for international investment advisors, asset managers, private equity firms, and other professionals providing expertise to high-net-worth individuals, family offices, and institutional investors from the Middle East, Asia, Africa, and beyond. Efficient regulations, political stability, and a knowledgeable local workforce have all contributed to Seychelles earning the trust of the finance sector.
Up until now, we’ve seen steady growth in licensed funds, approved banking applications, and offshore company registrations year after year. This has created good jobs for many skilled Seychellois in fields like accounting, legal services, and wealth management. Foreign capital flows through our financial centers have also supported other important aspects of our economy like real estate and construction.
The shadow of the EU Designation
So with the EU designation now casting a shadow, legitimate concerns have surfaced in private discussions I’ve had with friends working across the finance industry here. Chief among them is worry that overseas regulators may apply additional scrutiny to Seychelles-based firms or take a harder line when licensing new entities going forward due to the “blacklist” label. There is also uncertainty about how existing clients and potential investors may perceive the designation challenging perceptions of our jurisdiction as a well-regulated haven for conducting offshore business.
While tourism will always play a huge role here, preserving and expanding financial services opportunities going forward is key for diversifying our economy with higher-paying professional jobs less vulnerable to external shocks like health pandemics or climate change impacts disrupting tourism numbers. With global wealth projected to continue surging in the coming decades largely outside of Europe and North America, tapping into these new centers of affluence should remain a strategic priority.
Response from the Authorities
Looking at the response of the authorities in Seychelles, it’s reassuring to hear that maintaining active engagement with the EU regarding their transparency concerns is the top priority. Reasonable adjustments and commitments ensuring our rules and oversight keep pace with changing international standards seem poised to eventually result in removal from the blacklist. As long as leadership continues finding balanced solutions through respectful cooperation rather than defiant rejection of criticism, I believe the long-term confidence in our industry remain intact.
While not ideal, this challenge may even serve as an opportunity to renew focus on strengthening infrastructure like cybersecurity, monitored gateways between offshore and local structures, and advanced certification programs signaling our commitment to responsibility and cooperation. Staying at the forefront of regulation and compliance is key to sending a message that Seychelles remains an attractive choice for reputable finance firms seeking to conduct business through Africa and beyond according to the highest standards.
With steady leadership navigating this period judiciously, I remain optimistic Seychelles’ world-class credentials in investment banking, private wealth, and offshore investing services will endure and continue thriving for many years of growth ahead. Our talent, location and commitment to integrity provide a solid foundation to ultimately move past this setback if tackled in the right way. With care and understanding on all sides, opportunities still far outweigh concerns.
