Guidance

Overseas business risk: Seychelles

Published 24 February 2021

1. Political

Seychelles is a stable democracy ranked third on the Mo Ibrahim Index for Good Governance in Africa. Following a coup in 1977, the nation was under autocratic rule, before elections were restored in the early 1990s. A period of one party rule followed until 2020, when Seychelles experienced the first democratic peaceful transition of power in the nation’s history.

Seychelles is a unicameral parliamentary democracy. Executive powers lie with the elected president. The judiciary operates independently from the legislative and executive branches.

President Wavel Ramkalawan took office in October 2020, leading the Linyon Demokratik Seselwa (LDS) party to victory over United Seychelles (formerly Parti Lepep). Elections for the national assembly took place at the same time in 2020, although this is uncommon. Presidential elections take place every five years. Elections to the national assembly take place every four years.

2. Economic

Seychelles achieved non-ODA status in 2017, the first country in Africa to do so. With Africa’s highest gross domestic product per capita at nearly $17b in 2019, Seychelles has seen its economy contract dramatically following the COVID-19 pandemic. The pre-pandemic growth rate was expected to reach 3.5%, although GDP contracted by 13% in 2020. Seychelles pursues a liberal and open economic policy. The country relies heavily on importing goods from Europe and China, India and South Africa.

International tourism is the main economic driver for the economy, with nearly 70% of the country’s economy reliant upon it. A crash in international tourism due to the COVID-19 pandemic in 2020 severely affected Seychelles’ economy, with tourist numbers falling dramatically by the beginning of 2021.

The fishing industry (primarily exporting tuna) provides a small respite, and accounts for roughly 30% of foreign currency earnings. A tuna-canning factory with an annual throughput of 90,000 tonnes is the largest single employer in the country. Fish and fishery product exports reached USD 525 million in 2017.

Seychelles is a thought leader in sustainable ocean economies. A dedicated department of Blue Economy was established in 2015 and the country has developed a robust Blue Economy narrative around the sustainable use of its vast (1.34 million km2) maritime Exclusive Economic Zone. Seychelles achieved 30% maritime domain protection in 2019, ten years ahead of the international target date. The Seychelles government issued the first sovereign blue bond in 2018 – the Blue Bond encourages private sector investment to support the Blue Economy.

Environmental concerns are front and centre of policy and practice for the Government of Seychelles. This includes a reliance on ocean sustainability for fishing and tourism and a significant risk to public and private infrastructure from coastal erosion. The existential threat to the economy from a potential decrease in long haul travel by travellers concerned by their own carbon impact demonstrates how its economy balances a reliance on tourism and environmentally conscious industries.

Oceans, climate change and coastal erosion are key themes for Seychelles’ economy. Around 90% of national infrastructure is coastal and ongoing coastal erosion has caused flooding in recent years. Repeated coral bleaching events have resulted in the loss of 90% of the coral reefs since the 1990s. Seychelles’ ambitious targets for renewables are 15% of renewables in the next 5 years, 30% renewables by 2030 and 100% renewables by 2050.

The Seychelles Marine Spatial Planning initiative began in 2014 and was due to conclude in December 2020 with three main objectives: expand marine protected areas to 30 percent of the EEZ and Territorial Sea (achieved in 2019); to develop the Blue Economy; and to address climate change adaptation. Seychelles recently framed the acute impacts of climate change as a fundamental human rights issue.

3. Business

Seychelles ranked 100 among 190 economies in the ease of doing business report according to the latest World Bank annual ratings and 8th in sub-Saharan Africa. Within Africa, Seychelles ranks 22nd in contract enforcement and 28th in enabling access to credit and business start-ups. Improvements in the regulatory environment are needed to transition to a more business-friendly environment.

Internet penetration is estimated at 74% above the African average of 39% and the global average of 59%, although the cost of internet is high

4. Bribery and Corruption

Bribery is illegal. It is an offence for UK nationals and bodies incorporated under UK Law, to bribe anywhere in the world. In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case, it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

In 2020, Seychelles ranked 27th out of 180 countries in Transparency International’s corruption perception index with a score of 66 out of 100, the highest ranked country in Africa. Seychelles ranked 3rd on the Mo Ibrahim Index for Good Governance in Africa in 2020. Seychelles joined the Fisheries Transparency Initiative (Fiti) in 2020 and its first Fiti report is due in 2021.

The newly elected government has publicly committed itself to transparency and to fighting against corruption. One of its early measures was to restructure the country’s anti-corruption commission.

5. Human Rights

Seychelles ranked 67th out of 189 countries in 2020 UNDP Human Development index, the second-highest score in Africa after Mauritius.

Chapter III of the Constitution of the Republic of Seychelles guarantees fundamental human rights and freedoms, including the right to life, the right to dignity and the freedom from slavery and forced or compulsory labour.

The Seychelles Human Rights Commission Act (2018) established the Seychelles Human Rights Commission. The Committee is self-governing and independent and advises the Government of Seychelles on matters of human rights.

Seychelles is increasingly acknowledging gender based violence, with the Domestic Violence Act signed by the president in 2020. A Commonwealth Secretariat study in 2018 recorded that Seychelles lost USD 65m each year to violence against women and girls.

Seychelles achieved a score of 63rd out of 180 countries in the 2020 World Press Freedom Index. Seychelles has also signed up to the UK/Canada-led Media Freedom Coalition.

6. Protective Security Advice

Seychelles is generally a safe country. Read the latest FCDO travel advice.

7. Terrorism Threat

There is an underlying threat from terrorism. Read the terrorism section of our travel advice.

8. Crime

Crime is relatively low in Seychelles although break-ins are a product of the country’s very rate of heroin addiction. Violent crime is rare. Read the latest travel advice (safety and security).

9. Contact

Contact the DBT team in Mauritius for more information and advice on opportunities for doing business in Seychelles.