Does Seychelles require economic substance?

Yes, Seychelles may require economic substance in certain cases, but not every Seychelles company is subject to the same requirements. The current framework is primarily governed by the Economic Substance Act 2018, which requires certain Seychelles entities conducting relevant activities to demonstrate adequate economic substance in the jurisdiction, rather than applying a single rule to every International Business Company (IBC).

In practice, the key factor is whether the company carries out relevant activities that fall within the scope of the economic substance requirements. The analysis depends on the nature of the company’s activities and whether sufficient management and operational presence is maintained in Seychelles. As a result, companies that fall within the scope of the rules must demonstrate sufficient presence and activity in Seychelles.

For example, a passive holding company may be treated differently from a company engaged in relevant activities such as financing, headquarters services, or intellectual property business. The outcome depends on the specific facts and activities of the business.

Because the assessment depends on the company’s activities and structure, it is advisable to review economic substance requirements during the company planning stage.