SEYCHELLES is building a strong reputation as an offshore financial center.

As confidence grows in Seychelles as a reputable financial center, an increasing number of banks are making a beeline to the paradise islands in order to set up a base at the gateway to Africa.

The outlook is so positive, government officials and industry participants believe financial services could take over tourism and become the chief pillar of the economy in as little as five years.

The introduction of a revised Mutual Fund Act 2007, Securities Act 2007 and Insurance Act 2007 have reignited Seychelles' quest to be recognized as a fully-fledged offshore financial center.

Pierre Laporte, former governor of the Central Bank and now minister in charge of Finance has been an integral part of the country's changing fortunes, having been responsible for implementing the IMF reform package in 2008.

Thanks to his guidance, Seychelles is economically stable, and the banking sector is supervised by a separate monetary authority. "The independence of the Central Bank in 2004 was definitely the most significant stepping stone," he says.

"At the time, the general economic policies were insufficient. However, in 2008, along with the abolition of exchange controls, the Central Bank was given full independence of monetary policy. The government introduced fiscal discipline and started to reduce external debt. As a result, we managed to achieve economic stability. The exchange rate, which depreciated by almost 100 percent in 2008, appreciated back. Since then, with a few structural reforms, we have been on the right path, with a firm base from which the economy can grow."

The former Central Bank chief made sure technology became a crucial part of the reforms. In 2008, with the assistance of Polaris Financial Technology, the bank introduced an integrated core banking system, leading to greater efficiency.

It is currently introducing a fast-check clearing process, and has a number of other technology-based products.

"We have the added advantages of a literate population, which will aid us in our transformation to an ICT-savyy society. This will, of course, be catalyzed by the SEAS (Seychelles East Africa System) fiber-optic cable project," Laporte says.

As well as bringing in state-of-the-art technology, Seychelles is also nurturing a financially-savvy workforce with the University of Seychelles and the Seychelles Institute of Management playing a major role in improving the nation's skill set.

"The government is also reviewing its labor laws," Laporte explains. "It is already much easier for foreign workers to obtain work permits, and this will fill the short-term demand for human capital.

"We need to attract international banks with established profiles. They should be attracted to our economy by the booming offshore sector. We will be introducing incentives to attract international banks.

"Naturally our economy is quite attractive in terms of rates of return and return on equity, which is among the highest in the world on a per-capita basis. We do have room for banks to come in, and I am confident we will perform well.

"There is potential for the first Chinese bank to come in and set itself up as the banker for Chinese business here. We have trade agreements with northern and southern Africa, and businesses can tap into those markets on a tax-free basis. Now is the time to get the word out."



One-stop shop for investors

Established in 1995, the Seychelles International Business Authority (SIBA) will be attending the 3rd Offshore Investment Conference being held at the Pudong Shangri-La in Shanghai this month.

Celebrating the recent milestone of registering 100,000 international business companies in the offshore jurisdiction - many of them Chinese - the one-stop business shop is keen to tap deeper into the Chinese market.

"We began to enter the Chinese market in 2008 when we held our first road show in Shanghai," says SIBA's recently appointed CEO Wendy Pierre. "We then went to Beijing in 2011 and were accompanied by key stakeholders from the Ministry of Finance and industry representatives. We informed the Chinese as to what we could offer in terms of products and services and laid the foundations.

"Nowadays, we are capitalizing on this work: SIBA remains a regulator and we can therefore do a lot to promote businesses. China is looking for new markets for investment. Africa is the focus and Seychelles is well positioned to be used as a stepping stone into Africa."

The newly appointed CEO believes strongly in the development of the offshore financial sector. The challenge, she says, is making all the potential stakeholders aware of the opportunities, and has planned a coordinated and focused approach to get this done.

"We are seeing interest from all over the world. Seychelles is unique, and we must make use of our strategic location. As an IFC and offshore center, we have low taxation, no capital gains, no exchange control and we speak fluent English and French. A company can be registered within 24 hours. All of this makes us a preferred and attractive destination to do business.

"A specific tool that is in place tailored to the Chinese is our Chinese language website. This has worked extremely well; international business companies can be registered with a Chinese name, with the memorandum and articles of Association in Chinese."

During the road shows, Pierre and her team will be doing all they can to help Chinese businesses come to Seychelles.

"As a small international financial center, we are very flexible and receptive to changes on the commercial and regulatory front," she says. "We would also like to engage more with centers similar to Seychelles to collaborate and share expertise and experience to help us compete with the global financial giants.

"I have had the privilege of taking part in a placement program with the Isle of Man Financial Services Commission through the Commonwealth. It will greatly benefit SIBA and has shown me that solidarity can be built with small island states that can benefit us all.

"We may be small in size, but we have great ambitions. We are optimistic and look forward to taking SIBA and Seychelles forward."



Nuovobanq champions offshore

Meanwhile, enjoying international experience, but very much at home in Seychelles, Nouvobanq is the preferred bank for investors needing offshore financial services.

Providing the people and business community of Seychelles with comprehensive, first-class banking services since 1991, Nouvobanq is in the fast lane in terms of technological solutions, having implemented Oracle's Flexcube program to help grow its retail and corporate banking operations.

The new technological solution will, Managing Director and CEO Ahmad Saeed explains, provide a highly scalable infrastructure, enabling the bank to meet its aggressive growth plans and quickly launch new services to market with its European partners.

"Since the reforms, the banks have been moving and acting fast and are looking at new products and technologies," he says. "There is competition now in the market, and banks have to react if they want the financial sector to be a third pillar of the economy."

This proactive engagement with the most progressive advances in infrastructure and banking IT, coupled with Nouvobanq's in-bank technical and professional expertise, will enable it to provide Seychelles' most advanced and efficient banking service.

"Now that the Central Bank allows banks to do onshore and offshore under one license, we will be going into offshore. Perhaps China could help us by giving us the lines of credit needed. This would be a big advantage for us," Saeed says. "We are committed to achieving and maintaining a position of market leadership. Our complete range of banking products and services, and competitive fee and remuneration structures will attract new customers, and the professional, friendly and knowledgeable Nouvobanq staff will retain them."