(Seychelles News Agency) - The Seychelles government is relaxing its policy on the right to sell privately owned land to foreign nationals and at the same time tightening policy on the sale of state-owned land to foreign nationals.

In February 2013, Seychelles President James Michel announced that the government would amend the State Land and River Reserves Act in order to ensure that individuals who do not have Seychellois citizenship, cannot buy land on a ‘freehold’ basis.

Today the decision has been amended, whereby non-Seychellois will be able to buy privately owned land only, provided they meet a number of set criteria and are granted sanction by the Seychelles government.

The new policy also states that non-Seychellois buyers will not be able to purchase state-owned land in the Seychelles, according to a press statement by the Seychelles Ministry of Land Use and Housing issued today.

Non-Seychellois are furthermore banned from buying land from the government’s Land Bank Scheme, which is aimed at enabling Seychellois citizens to obtain a piece of land at a reduced cost.

The new policy also makes provision for non-Seychellois to obtain a long term lease for a particular development on state owned land, which applies to all outlying islands of the Indian Ocean archipelago.

The land use ministry says this is aimed at ensuring investment in the country.

“In keeping with improving the “Ease Of Doing Business” in Seychelles the current mandatory requirement under the Immovable Property (Transfer Restriction) Act for Non-Seychellois to apply for and obtain sanction to occupy and or rent business premises will be dispensed with altogether on tenancies and leases of a maximum duration of 2 years. The IPTR Act will shortly be amended to provide for this,”said the statement.

Property owned by nominee companies

As foreigners in Seychelles need government sanction to buy property, which can take a long time and sometimes is not approved, some foreigners have opted to circumvent the law by buying property through nominee companies, where Seychellois are majority shareholders.

Last year, the government said it would clamp down on this practice by declaring it would repossess property which was bought in this way, unless the owners come forward and regularise their ownership documents within a year.

The annoucement today also specifies that the Seychelles government is giving all non-Seychellois another year to do what is necessary to legalize the ownership of their property, if they bought property using companies in the offshore sector.

“With effect from April 15, 2014, Government will grant amnesty for a period of 12 months, for all Non-Seychellois beneficial owners of immovable property which may have been acquired in the past through nominee companies or Seychellois Nationals, to submit an application for sanction to regularize ownership,”says the statement.

Land shortage and housing prices

The three main granitic islands of the Seychelles, Mahé, Praslin and La Digue are home for most of the 90,000 population of the small island nation.

Land for building homes is scarce and a rise in property prices has been fuelled by speculation of foreign buyers buying prime property.

The Indian Ocean archipelago of 115 islands is has a total land area of 455 km² spread over an Exclusive Economic Zone of 1.3 km. Half of the Seychelles’ land territory is protected under law as nature reserves.