THREE years after the introduction of a long-awaited Investment Code, it has failed to live up to expectations. While the Investment Code was seen as a welcome move, the legislation had various shortcomings. The most important being that businesses remain subjected to licensing control.
This is a major stumbling block to investors. They feel that their investment is not at all safe having no guarantee of a license renewal after twelve months.
The episode of the Plantation Club's closure is a reminder that the present licensing set-up is more often than not an administrative mechanism allowing Government to discriminate against certain investors.
While investors are supposed to enjoy equal rights, the Code makes no mention of concessions often granted by Government on a case by case basis. These concessions, including tax relief and foreign currency retention of up to 85%, have almost always benefited the larger foreign-owned tourism operators.
Among other provisos, the Code guarantees against expropriation of property" except for reasons of public interest" and this shall be subject to prompt and full compensation.
There is also an assurance that once an incentive is granted for a certain period of time, it shall not be adversely affected in any manner within that time. This is reassuring to those operators who have benefited from concessions under such legislations as the IPA (Investment Promotion Act), which was tailor-made for foreign operators linked to 5-star establishments. Investments in the Seychelles International Trade Zone (SITZ) are not covered by the Code and continue to be governed by its own regulations.