New investmentCode proposed |21 November 2005

The proposal has been published in the November 14 issue of the Official Gazette as the Investment Code of Seychelles Bill, 2005, which will go before the National Assembly Tuesday November 19.

The Bill will be presented by the Minister for Economic Planning and Employment, Jacquelin Dugasse.

The law being proposed would apply to direct investments made by foreign and domestics investors. It seeks to make provision that will encourage more investments into the country by safeguarding the interests and the rights of potential investors.

A Competency Authority will be appointed by the minister to process and approve applications of investment projects, at the exception of a few.

Certain economic activities would 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 Bill 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, just to mention a few.

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, just to name a few. Employment agency, video shops and pre-school are listed under other areas in the restricted category.

However investments projects in agriculture and fisheries below R150,000 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.

Approval will also be required if the project in question has foreign partnership.

Projects under cottage industry and small business will also not need the approval of the Authority.

Investments projects under the International Trade Zone (SITZ) are being covered by the governing Act, hence will not need approval of the Competent Authority.

The provisions in the Bill guarantee equal treatment to investors and the protection of their property and incentives. The Bill 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 Republic.