Seychelles Crypto: Zero Tax & Offshore Hub #23

Country facts

Seychelles crypto score

Trade and store crypto

Zero tax, light-touch regulation, and home to major global exchanges

Like many small, ambitious, and investor-friendly countries, Bitcoin took off rapidly in Seychelles due to light or no-touch legislation and an undeveloped regulatory regime. It has a small population of around 100k but with high volumes of crypto adoption – not to mention the overseas investors.

Bitcoin and crypto trading and investing are well-developed with a number of exchanges operating. The latest well-publicized, name to appear on the Seychelles horizon is Bitget which is decentralized and operates globally and has announced that it has registered in Seychelles to facilitate global expansion. Nb – The company is looking out for more regional hubs in the future – so it helps if your location is a lightly regulated island paradise with nice beaches!

Naturally, Bitcoin has seen spectacular price rises and crashes which have led to countries tightening up their approach to it, especially for anti-money laundering and tax reasons. Seychelles has also had its fair share of high-profile trading scams involving companies registered in the country. Protecting investors (as well as the country’s reputation) has been even higher on the agenda, especially since the collapse of FTX, but to date, the task seems to have dragged on a little.

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A report in 2021, conducted by the Financial Action Task Force FATF and OECD nominated the country as a ‘non-compliant or partially compliant nation’ but this is changing. Seychelles is making firm moves to regulate the considerable numbers of Virtual Asset Service Providers VASPs that are registered there, with the aim of meeting the standards of the Financial Action Task Force (FATF).  The latest regulations will bring Seychelles into line with, at least, the wider minimum standards that many countries have adopted. Following the National Risks Assessment Report, Seychelles will work on an action plan that will be discussed internally with the national AML/CTF committee and presented to the cabinet of ministers, and the National Assembly for approval

Bitcoin taxation in Seychelles

As we have seen before, the taxation of crypto becomes more successful when it is partially accepted by governments (whichever way it is designated or defined by the financial institutions). In Seychelles this definition has not been forthcoming over the years leaving crypto outside of being currency or security, and, as such, making it difficult to tax. This, of course, may be a deliberate policy, or simply a super laid-back approach.

As far as international investors are concerned, Seychelles is a tax-free destination for cryptocurrency traders. There’s no capital gains tax, income tax, or VAT which puts it right up at the top of the list of crypto tax havens.

A Seychelles CBDC?

In early 2022 Seychelles announced a new policy proposal for CBDC adoption in Seychelles, looking at the best ways to regulate and adopt such a token. The proposal for the CBDC adoption in Seychelles is part of the Central Bank of Seychelles’ initiative to modernize the country and develop a National pay system whilst also researching how to establish and profit from CBDCs.

Deploying a blockchain system has been deemed more practical and cost–effective for such a small country. The proposal moots the idea of a CBDC eventually interconnecting all of the country’s population, giving them the ability to access the banking system from their mobiles.

Blockchain education in Seychelles

Seychelles is a small island where two Universities predominate. Blockchain and crypto-based education are mostly online teaching activities. However. In terms of blockchain, the government is keen to educate its youth on the possibilities and potential of this new technology. The MERJ Exchange, located in Seychelles, was the first company to list tokenized security in its stock, giving the island the jump on other thrusting crypto rivals such as the Gibraltar Stock Exchange. The government’s growing support for blockchain and crypto education looks likely to continue strongly.

Bitcoin mining in Seychelles

As far as we can discern, Bitcoin mining plays little or no part in Seychelles.