Seychelles: Investing in the Seychelles
Seychelles has been working to attract foreign direct investment to support its economic development and growth. According to UNCTAD's World Investment Report 2023, FDI inflows to Seychelles fell by 5.7% y-o-y in 2022, to USD 212 million. Masdar, a renewable energy company and a subsidiary of Mubadala Development (United Arab Emirates), entered a joint venture with Seychelles-owned Public Utilities Corporation to open a 5 MW solar photovoltaic plant for USD 181 million. At the end of the same period, the FDI inward stock closed at USD 2.95 billion, representing around 153.5% of the country’s GDP. The majority of FDI has been directed to the tourism sector, with the construction of hotels, resorts, and luxury housing (including the Eden Island development project realized by South African investors, which includes over 500 apartments, villas, and commercial units, or the Four Seasons Resort Seychelles at Desroches Island). Seychelles has also been promoting investment in aquaculture projects, including fish farming and seaweed cultivation. Among the main investing countries, there are China, India, the UAE, and France. The discovery of significant oil deposits on the coastlines of Seychelles is sparking new interest among investors (licenses for exploration and exploitation have been granted since 2013, and in 2022, an agreement was inked between the Seychelles government, Petro Seychelles Ltd., and a Canadian oil exploration firm for exploration and extraction activities. These operations are slated to take place on the southern shelf, approximately 50 miles southeast of the main island, Mahé).
The Government of Seychelles has taken regulatory measures to create a suitable environment for foreign investment such as reducing the corporate tax rate. In addition, a skilled workforce, an efficient legal system based on the Napoleonic Civil Code, and transparent access to different legal sources concerning investment represent advantages for investors. Attractive sectors for investments include tourism, construction, alternative energies and the oil sector, as the country can count on an exclusive Economic Zone (EEZ) of 1.3 million km2. However, risk factors include the existing black-market economy, limited export opportunities, excessive reliance on tourism (which indirectly accounts for more than half of GDP), and piracy. Furthermore, foreign investments are restricted in certain sectors in order to protect the public interest (including accommodation services of up to fifteen rooms, car hire, crop production, real estate agencies, travel agencies, etc.). The Seychelles Investment Board (SIB) is the national single gateway agency for the promotion and facilitation of investment in the country. The Agency also assists in screening potential investment projects in cooperation with other government agencies. Overall, Seychelles has a good business climate and the country ranks 20th among the 180 economies on the 2023 Corruption Perception Index and 78th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 165 | 225 | 212 |
FDI Stock (million USD) | 2,620 | 2,846 | 2,955 |
Number of Greenfield Investments* | 3 | 1 | 2 |
Value of Greenfield Investments (million USD) | 389 | 109 | 186 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Seychelles | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 4.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 8.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
There are several good points that make Seychelles an attractive destination for foreign investors, including:
The challenges and drawbacks to consider when investing in Seychelles are:
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Latest Update: May 2024