FSA reminds IBCs that incorporation is not a licence
The Seychelles Financial Services Authority has reminded International Business Companies that registration under the IBC Act 2016 does not authorise regulated business. An IBC active abroad must say who licenses it, or stop.
The Financial Services Authority (FSA) of Seychelles has warned International Business Companies (IBCs) that incorporation is not a licence to carry on regulated business. FSA Circular No. 5 of 2026, "Reminder of Restrictions under Section 5 of the International Business Companies Act, 2016", dated 14 August 2026, is addressed to every IBC incorporated under the International Business Companies Act 2016. It states that incorporation or continued registration under the Act "does not constitute or substitute any licence" required for regulated activities.
What the rules say
The FSA's reason for writing is that it has identified instances in which certain IBCs appear to be conducting regulated activities in foreign jurisdictions without the permissions required there.
Section 5(1) of the IBC Act 2016 defines an IBC as a company incorporated, continued or converted under the Act. Section 5(2), in the version published on SeyLII as at 20 December 2021, prohibits an IBC from carrying on the following businesses except as stated:
| Activity | Restriction under section 5(2) |
|---|---|
| Banking (Financial Institutions Act) | Prohibited, in or outside Seychelles |
| Insurance | Prohibited in Seychelles; outside only if licensed or otherwise permitted there |
| International corporate, trustee or foundation services | Only as the International Corporate Service Providers Act permits, and outside Seychelles only if licensed there |
| Securities business (Securities Act) | Prohibited in Seychelles; outside only if licensed or permitted there |
| Mutual fund business | Only if licensed under the Mutual Fund and Hedge Fund Act or the laws of a recognised jurisdiction |
| Gambling, including interactive gambling | Only if licensed or permitted where carried on |
The circular adds restrictions tied to the Virtual Asset Service Providers Act. IBCs may not carry on mining, operate mixer or tumbler services, or provide virtual asset services from Seychelles without a licence under that Act, and may not issue or promote initial coin offerings or non-fungible tokens without authorisation.
On disclosure, an IBC conducting regulated activity abroad must state clearly, to clients, potential clients and the public, the authority under which it operates. The FSA expects that statement to appear prominently on websites, in client agreements and in marketing material. Where applicable, the IBC must also state that its incorporation is not an FSA licence, authorisation or endorsement, and must not give the impression that it is.
Penalties
According to the circular:
- a contravention of section 5 of the IBC Act may, on conviction, attract a fine not exceeding USD 50,000;
- carrying on virtual asset services without a licence under section 5 of the VASP Act is an offence under section 33, with a fine not exceeding SCR 5,250,000;
- issuing ICOs or NFTs without registration under section 27 of the VASP Act is also an offence under section 33, with the same maximum fine.
Who is affected
The circular is addressed to every Seychelles IBC, but the practical burden falls on those that deal with clients: brokers, payment and crypto businesses, investment advisers, gaming operators, and corporate service businesses that use an IBC as their contracting entity. Groups that hold an IBC purely for holding or treasury purposes are less exposed, though they should still confirm that they are.
The circular does not mention registered agents. They will nonetheless be the first point of contact for clients asking what they need to change.
Key dates
- 14 August 2026: Circular No. 5 of 2026 issued.
- No deadline is set. The FSA expects IBCs to review their activities and public statements and, where there is a potential contravention, to cease the activity or representation immediately and take corrective action.
What it means in practice
Consider a hypothetical Seychelles IBC that offers online trading to retail clients in several countries, with a website that says only "registered in Seychelles". On the circular's reasoning, that wording risks implying FSA authorisation. The company should either show the foreign licence under which it operates, naming the licensing authority, on its website, client terms and marketing, or stop the regulated activity.
For group compliance teams, the task is a review of every client-facing IBC: what each one does, where, under whose licence, and what its public materials say.
This piece appeared in Jurisdicta, Issue 001. General information only; not legal, tax or investment advice.