Economic Substance Oversight in Seychelles (2025–2026): Seychelles Offshore Compliance and Banking Reality (2026)

Seychelles has tightened the regulatory environment around cross-border company structures through tax law changes, supervisory guidance, and closer coordination between authorities. The Seychelles Revenue Commission (SRC) states that changes applying from 16 September 2021 adopted a revised approach for covered companies, including an economic substance test for passive income received from a non-resident.

Seychelles tightened cross-border company rules, adding economic substance requirements from September 2021.

For 2025–2026, businesses assessing Seychelles structures should read economic substance together with the current International Business Companies Act framework, FSA supervision of the fiduciary sector, and SRC tax administration rules. The Financial Services Authority (FSA) continues to publish updated IBC legislation, including the consolidated International Business Companies Act, 2016 to 18 December 2024 and a listing for the International Business Companies (Amendment) Act, 2025.

Economic substance in Seychelles is linked to tax law, not just company registration

SRC’s official tax-system guidance explains that Seychelles historically used a territorial approach and that the law changes applying from 16 September 2021 introduced a revised approach for covered companies, including an economic substance test for passive income received from a non-resident. SRC also states that the self-assessment regime places responsibility on the taxpayer to determine whether it has Seychelles-sourced income and to declare and report taxable income in line with applicable laws.

This means the topic is not limited to incorporation alone. Companies need to consider both corporate-law obligations and tax-law analysis when reviewing whether their structure, income profile, and operations may attract additional scrutiny.

The current rules focus on covered companies and specific income profiles

According to SRC guidance, the revised tax approach does not automatically apply economic substance requirements to every Seychelles company. Instead, the rules apply to specific covered companies and income situations. Instead, it says the revised approach applies to covered companies, including an economic substance test for passive income received from a non-resident.

The revised rules target specific companies, requiring substance for certain foreign passive income.

The 2021 amendment regulations to the Eleventh Schedule also narrowed part of the framework to an enterprise that is a member of a multinational group and defined terms such as multinational group and pure equity holding company.

Key Points from Official Sources

• The revised approach applies from 16 September 2021.
• SRC explicitly refers to an economic substance test for passive income received from a non-resident.
• The Eleventh Schedule amendment regulations refer to enterprises that are members of a multinational group.

Why oversight appears to be becoming more structured

Oversight has tightened through updated tax rules, stricter supervision, and closer SRC–FSA coordination.

The official record supports the view that oversight is becoming more structured for three reasons.

First, SRC’s tax-system guidance reflects the post-2021 shift to a revised approach that expressly includes an economic substance test for certain cases.

Second, FSA has continued to publish supervisory materials relevant to physical presence and compliance. Its 2024 circular listings include Circular No. 5 of 2024 – Proof of Physical place of Business and Office Criteria. Even though the document text is not publicly readable through the search interface, the official FSA listing itself shows that this criterion became a published supervisory topic in 2024.

Third, FSA and SRC announced a memorandum of understanding to increase collaboration and coordination in their regulatory and supervisory functions. This cooperation may lead to more coordinated compliance monitoring across tax administration and financial supervision.

Corporate supervision also matters for economic presence analysis

The FSA states that its Fiduciary Supervision Section is responsible for the regulation and supervision of entities licensed under, among other laws, the International Business Companies Act, 2016.

The FSA’s Fiduciary Supervision Section oversees entities licensed under the International Business Companies Act, 2016.

FSA has also publicly stated, in its communiqué on accounting records, that a random sample of International Business Companies would be requested to make available their accounting records at the registered office within a prescribed timeframe to ascertain compliance with section 174 of the IBC Act. That does not by itself equal an economic substance audit, but it does show active compliance checking in the IBC environment.

In practice, regulators may also review whether companies can demonstrate operational support, records, and management consistent with their legal structure.

2025 materials show the framework is still evolving

The FSA legislation page currently lists the consolidated International Business Companies Act, 2016 to 18 December 2024 and also lists the International Business Companies (Amendment) Act, 2025. Its 2025 circulars page also lists Circular No. 6 of 2025 – Upcoming Policy Changes to the International Business Companies Act, 2016. These official listings show that the legal and policy framework around IBC regulation remained active into 2025.

Official FSA listings show ongoing updates to the IBC legal framework, with amendments and policy changes continuing into 2025

That is important for SEO and compliance writing because a 2025–2026 article should not treat the rules as frozen in 2021 or 2024. It should reflect that the supervisory framework continues to be updated.

What companies should review in practice

A company using a Seychelles structure should review whether it falls within the category of a covered company under the post-2021 rules, whether it receives the type of passive income identified by SRC, and whether its structure is connected to a multinational group as described in the amended Eleventh Schedule.

It should also ensure that its records and internal support are consistent with the company-law framework. FSA’s supervision of the fiduciary sector and its accounting-records communiqué show that record availability and legal compliance remain active supervisory themes.

Practical compliance checkpoints

• Review whether the company is a covered company under the post-2021 tax approach.
• Review whether the company receives passive income from a non-resident.
• Review whether the structure is part of a multinational group under the amended Eleventh Schedule.
• Ensure accounting records can be produced in line with section 174 expectations
• Monitor FSA legislative and circular updates in 2025 and beyond.

Conclusion

For businesses considering a Seychelles offshore company, economic substance should be understood within the broader regulatory framework introduced after 2021.

The rules focus on certain covered companies and specific types of passive income rather than imposing blanket economic substance requirements on all IBCs.

At the same time, continued updates from the Seychelles Revenue Commission and the Financial Services Authority show that regulatory oversight and compliance expectations remain active. Companies using Seychelles structures should therefore monitor legal updates and ensure their operational and record-keeping practices remain consistent with the current framework.