Seychelles is an archipelago in the Indian Ocean. One of its many islands, Mahé is a popular location for foreign investment opportunities in tourism and real estate.
The islands themselves are of granite rock formations with sandy beaches. This makes for stunning scenery that attracts tourists all year round. The tourists stay in luxury hotels as they enjoy this destination’s natural beauty.
This guide will cover some basics about the business opportunities in Seychelles real estate.
Table of contents
Geography and Location
Seychelles is an island country in the Indian Ocean at the eastern edge of the Somali Sea. It consists of 115 islands. Seychelles’ capital and largest city, Victoria, is 1,500 kilometres (932 mi) east of mainland Africa.
Comoros, Madagascar, and Mauritius border the country. The French overseas regions of Mayotte and Réunion border it to the south. The Maldives and the Chagos Archipelago to the east are also some of the nearby islands.
Population, People and Language
Seychelles has the smallest population in Africa. According to the 2021 CAHF report, its estimated population is 99,202.
57.5% of the population lives in urban areas. Seychelles has a high population density of 210.4 people per sq. Km.
The Population growth is at 2.22%. The median age is 34.2 years.
The three main languages in Seychelles are Creole, English, and French.
The nations population is considered densely populated.
Median Age Group
Population age group is relatively above the African average.
The growth rate is relatively average.
Urbanisation is one of the highest on the continent.
Real Estate and Investing
Real estate in Seychelles has proven lucrative over the years. In 2013, the real estate sector made up the second-largest contribution to GDP, after tourism. The Seychelles real estate market is in two categories, the private sector, which mainly focuses on building for upper middle income and above class, and the Government sector, which aims to provide affordable housing for the low-income class.
The stunning natural beauty of the islands, with its white sandy beaches and turquoise waters and excellent all-year-round weather, makes Seychelles a highly desirable destination for investors. This has long been an incentive for the hospitality industry, where the construction of Hotels and other accommodations for tourists has been booming.
The real estate sector is also known for excellent returns on investment. Many properties are utilised as a source of income from vacation rentals. According to current trends, most owners should expect gross rental yields of up to 5.68 per cent from rental income.
Also note that there is a variation in property pricing per location, varying from US$56 per square meter to US$4500 per square meter.
The favourable policy on selling land to foreigners also allows them to acquire freehold land held in private ownership only, and leasehold options if it’s state land.
The rental yield is estimated at 5.68%
Other Investor Information
- Ease of Doing Business Regional – 2020: 10th
- Ease of Doing Business International – 2020: 100th
- Foreigners are allowed to own real estate up to 49 or 99-year lease terms.
- Pro Landlord
- Capital Gains Tax: Foreigners – 0%
- Corporate Tax – 30%
- Personal Income Tax is progressive up to 30%
- Stamp Duty for foreigners 11-17%
- Gross rental income earned by non-resident individuals is taxed at a flat rate of 15%.
- The tax rate for Immovable Property Tax is 0.25% of the market value
Tourism and fisheries are the cornerstones of the Seychelles economy. Hence the economic shock and disruptions caused by the covid-19 pandemic were quite severe. Economic growth dipped to -12.9% in 2020 from 1.9% in 2019.
The government of Seychelles embarked on an economic reforms program to help the island nation’s macroeconomic stability and recovery from the effects of the 2020/21 pandemic.
The Blue Economy framework and roadmap, is a Government initiative launched in 2018, that is focused on wealth creation, social equity which aims at improving livelihoods, and environmental conservation. This policy will help strengthen the economic and social infrastructure as well as economic recovery and resilience, going forward.
The national GDP was $1.45 Billion in 2021, with GDP Per capita at $13,306.
Source: Ubuturo Research
The main contributor under this sector is tourism. It contributes 70% to the country’s total revenue
The main agricultural products include fish, cinnamon, cassava, sweet potatoes, and tapioca
The main products manufactured in Seychelles include furniture, cigarettes, beer and chemicals.
Seychelles’ major economic activities include tourism, fishing, farming, drilling, and manufacturing. Most manufacturers are small-scale. The majority operate food processing plants that deal in coconuts, copra and vanilla.
The economy also produces agricultural products which include cinnamon, sweet potatoes, cassava (tapioca), bananas, poultry and tuna.
The manufacture of other items also plays a significant role within the sector. Some of these items include;
Furniture, cigarettes, beverages like beer, chemicals among others.
Seychelles provides tax-efficient products to foreign investors.
Oil and gas
The country could have large off-shore petroleum reservoirs that are yet to be explored.
Seychelles is working towards growing its financial services sector. The country’s high exchange rate makes it attractive to those who seek to invest.
It also offers international businesses and investors a range of modern tax-efficient products. The products are flexible and secure.
The oil and gas industry also appears to be promising. New detailed studies show that Seychelles could have large off-shore petroleum reservoirs. However, efforts to discover them are still underway.
The marine life of Seychelles makes up more than 1,000 species of fish.
Seychelles allocates 42% of its territory for conservation.
Coconut plantations dominate the Islands producing over 5 varieties.
Being an island, the major natural resource of Seychelles is fish. Tuna is the most caught fish, making it a very big export for the country.
Apart from tuna, another important source of income is prawns.
Another natural resource is spectacular wildlife. The country protects threatened species. The endangered species of Seychelles includes;
The Seychelles magpie robin, Seychelles black parrot, green sea turtles, hawksbill and olive ridley.
More natural resources include agricultural produce like coconuts. Among the common local varieties planted are koko ble, koko zonn, koko rezen, koko leo and koko lerin.
Tourism is the most significant industry in Seychelles. It accounts for 70% of the country’s foreign exchange revenues and significant to the Island’s economic growth.
About 15 per cent of the formal workforce is directly employed in tourism. In addition, the industry supports other sectors like real estate and construction, banking, and transportation.
Almost half of the country’s landmass is set aside for national parks and reserves. Seychelles also offers plenty of pristine beaches, sheltered coves, and sapphire waters.
The desirable climate and cool breezes also provide the perfect playground for cruising. Tourists enjoy Seychelles’ coral beaches and opportunities for water sports. Wildlife in the archipelago is also a major attraction.
There have been efforts to attract foreign investment through upgrading some of the existing hospitality infrastructure and related services. These have brought in a major investment in real estate projects and new resorts.
Seychelles is a popular destination for tourists and investors alike. The excellent all year round weather conditions, beautiful white sandy beaches, and crystal clear waters, a stable and forward looking Government, world-class resorts, and the burgeoning tourism industry, all make this one of a kind Island, a great investment destination.
If you are interested in investing in Seychelles real estate. Visit ARE for more details.