- The parliament of Seychelles has approved of a new investment code aimed at "creating a legal environment more conducive to attracting a greater flow of investment into the country." The bill, which has been prepared for years, is to create greater safety for foreign and local investors.
The Seychellois government published the draft bill in the latest issue of the 'Official Gazette' as the "Investment Code of Seychelles Bill, 2005". On Wednesday, it went before the National Assembly, where it was presented by the Minister for Economic Planning and Employment, Jacquelin Dugasse.
The new law is to apply to direct investments made by foreign and domestic investors. "It seeks to make provision that will encourage more investments into the country by safeguarding the interests and the rights of potential investors," according to a statement by the government of Seychelles.
A Competency Authority is now to be appointed by the Minister to process and approve applications of investment projects, at the exception of a few. Certain economic activities are to be reserved for domestic investors, while those of a "strategic nature" are open to all investors, but subject to conditions imposed by the government "in the public interest".
The new investment code defines the investment areas under two categories namely "strategic" and "restricted". Strategic business ventures include production and distribution of electricity and water, storage and distribution of petroleum, mining of natural resources, broadcasting and telecommunication services, genetic centres, among many others.
The businesses falling under the restricted area category include those that are in the tourism, agriculture and fisheries, industrial and telecommunication sectors. These include accommodation up to 10 rooms, excluding luxury villas, boat charter, taxi, tourist guide, car hire, tour operator, production of fresh crops and flowers, production of eggs and processing of pig and poultry, cottage industries, small businesses, building contractor, Internet provider and hire of films. Employment agency, video shops and pre-school are listed under other areas in the restricted category.
However investments projects in agriculture and fisheries below rupee 150,000 (euro 25,000) do not normally have to be submitted to the Competent Authority for approval, "but they will need the approval of the Authority if the proposed project is venturing into a new produce or product that has never been or is not commonly done in the country or if it is introducing a new technology never applied before in the country," the government release says.
There are however limits to where the new law is to be implemented. "Investments projects under the International Trade Zone (SITZ) are being covered by the governing Act, hence will not need approval of the Competent Authority," Seychellois authorities point out.
The provisions in the new law guarantee equal treatment to investors and the protection of their property and incentives. The law also makes provisions for the investors' right to convert their receipts in local currency into a convertible currency and their right to remit foreign exchange earnings. It also covers the resolution of disputes between investor and the government.
A new investment code for Seychelles has been planned for several years, as the national economy has experienced a very low growth rate lately and lack of foreign investments. International institutions such as the UN's Industrial Development Organisation (UNIDO) and the World Bank have recommended legal reform and assisted Seychellois authorities in drafting the bill.
The new investment code has mainly been developed by the Seychelles Investment Bureau (SIB), a state agency that runs several programmes in the field of investment promotion. A UNIDO team was visiting the SIB only in the beginning of November to assist the Seychellois state agency in finishing the draft and assisting in other investment promotion projects.
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