Guernsey


In 933 the Channel Islands, formerly under of control of the Duchy of Brittany, were annexed by the Duchy of Normandy. When Guillaume Duke of Normandy conquered England in 1066, he became King William I as well as Duke of Normandy. However when 138 years later King John lost the territory of Normandy, the Channel Islands remained loyal to the English crown. In return for this loyalty, King John granted to the islands certain rights and privileges in 1215 which enabled them to be virtually self-governing. Over the ensuing centuries, possession of the islands switched back and forth between the English and French several times. The 19th century saw a dramatic increase in prosperity of the island, mainly due to its success in the global maritime trade. The Bailiwick of Guernsey was occupied by German troops in World War II. Post war, tourism started to really take off, and the reduction of tax rate in 1959 lead to a large influx of wealthy UK individuals. In 1973 Guernsey became an Associate member of the EEC. Banking and Finance became the main income earners from the 1980’s onwards and have brought huge wealth to Guernsey and a respectable standing in the world of Offshore Finance centers.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

11 700 USD

13 065 USD

13 565 USD

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Contact method: and / or

Core Services

11 700 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

inckuded

— Annual government fees

Stamp Duty and Guernsey Registry incorporation fee

6 700 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

110 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

600 USD

— Apostilled set of Statutory documents

Optional services

990 USD

Nominee Director

Paid-up “nominee director” set includes the following documents

375 USD

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

150 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

250 USD

For client with high risk Status

Cost of incorporation, including first year servicing 11700
Cost of nominee director services per year, including an apostilled set of documents 990
Cost of nominee shareholder services per year, including an apostilled set of documents 375
Cost of annual service, starting from the second year 6700
Open account in 26785
Incorporation timescale for a turnkey company 10 days
Country 26695

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
78 sq. km 65.605 (2013) Saint Peter Port 0.6% (2013) no data
Location Western Europe
National currency Pound sterling
Conditional reduction of currency GBP
Against USD 0.6
Climate, average max and min t° temperate with mild winters and warm sunny summers; avg. maximum temperature is 20°C, avg. minimum temperature is 6°C
Time difference from Moscow - 4 hours
Dialing code +44-1481
State language Ethnic groups consist of British and Norman descent
Ethnic groups UK and Norman-French descent with small percentages from other European countries
Literacy rate no data
Credit rating AA
Government type Parliamentary democracy
Executive branch Government and Chief Minister
Legislative branch States of Guernsey (45 members)
Judicial branch Royal Court and Magistrates Court
GDP per capita rank 14 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
No based on the principles of Norman French and English common law 10 days No Yes
Types of entity sole trader; partnership; limited partnership; company limited by shares; company limited by guarantee; unlimited liability company; mixed liability company; cellular company; branch of foreign company; trust
Incorporation timescale for a new company 1 day
Company suffix "Limited", "With limited liability", "Ltd.", "Avec responsabilité limitée", or "ARL"
Sensitive words bank, fund, insurance; prophanities; words implying patronage of the Crown or government, etc.
Local registered agent Yes
Information to be kept at the registered office company records (register, index, record, accounting records, agreement, memorandum, articles, minutes or other document)
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Directors’ meetings/frequency/location Yes / no requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Meetings/frequency/location Yes / annually / anywhere
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements 1 1 No requirements No
Issued capital payment deadlines No requirements
Standard currency Pound sterling
Standard authorized share capital 1
Standard par value of shares 1
Shares with no par value permitted Yes

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
0% No No No No
Personal tax 20%
Corporate tax (in detail) The corporate income tax rate is 0%, with a few exceptions when the tax rate is 10% or 20%.
Capital gains tax. Details Capital gains in Guernsey are not subject to tax.
Other taxes Social Contributions, Property Transfer Tax

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
No No No Yes No
Requirement to prepare accounts Yes
Double tax treaties network 13
Tax Exchange Information Agreement network 61
OECD member No
Offshore/onshore status according to the RF laws Yes

GENERAL INFORMATION

General info

Guernsey, officially the Bailiwick of Guernsey, is a British Crown dependency in the English Channel off the coast of Normandy.
Total area of the country is 70.273 sq. km. The population is 65.605 people (2013). Ethnic groups consist of British and Norman descent.
The capital is St. Peter Port.
The official languages are English and French.
The currency is Pound sterling (GBP). 1 USD is equal to 0.6 GBP.
Climate of Guernsey is temperate with mild winters and warm sunny summers. The warmest months are July and August, when temperatures are generally around 20°C but occasionally reach 24°C. On average, the coldest month is February with an average weekly mean air temperature of 6°C. Snow rarely falls and is unlikely to settle, but is most likely to fall in February. The temperature rarely drops below freezing, although strong wind-chill from Arctic winds can sometimes make it feel like it.
Time difference with Moscow is -4 hours.
Literacy rate is 99%.
Calling code is +44-1481.

History

In 933 the Channel Islands, formerly under of control of the Duchy of Brittany, were annexed by the Duchy of Normandy. When Guillaume Duke of Normandy conquered England in 1066, he became King William I as well as Duke of Normandy. However when 138 years later King John lost the territory of Normandy, the Channel Islands remained loyal to the English crown. In return for this loyalty, King John granted to the islands certain rights and privileges in 1215 which enabled them to be virtually self-governing. Over the ensuing centuries, possession of the islands switched back and forth between the English and French several times. The 19th century saw a dramatic increase in prosperity of the island, mainly due to its success in the global maritime trade. The Bailiwick of Guernsey was occupied by German troops in World War II. Post war, tourism started to really take off, and the reduction of tax rate in 1959 lead to a large influx of wealthy UK individuals. In 1973 Guernsey became an Associate member of the EEC. Banking and Finance became the main income earners from the 1980’s onwards and have brought huge wealth to Guernsey and a respectable standing in the world of Offshore Finance centers.

Government Type

Politics of Guernsey take place in a framework of a parliamentary representative democratic British Crown dependency. The Bailiwick of Guernsey is not part of the UK, although its defense and foreign policy is the responsibility of the United Kingdom; and while it participates in the Common Travel Area (comprising the islands of Ireland, Great Britain, the Isle of Man and the Channel Islands), it is not part of the European Union.
The head of state is British monarch represented by the Lieutenant Governor.
Executive power is represented by the Government, headed by the Chief Minister.
Legislative power is vested in the deliberative assembly of the States of Guernsey which consists of the Bailiff, 45 People's Deputies, elected from multi- or single-member districts every four years. There are also two representatives from Alderney, a semi-autonomous dependency of the Bailiwick, but Sark sends no representative. The Bailiff or Deputy Bailiff preside in the assembly. There are also two non-voting members: H.M. Procureur (Attorney General) and H.M. Comptroller (Solicitor General), both appointed by the Crown and collectively known as the Law Officers of the Crown.
Judiciary power is represented by the Royal Court and Magistrates Court.

Economy

Guernsey’s economy is based on financial services (banking, fund management, insurance) which account for about 23% of employment and about 55% of total income. Tourism, manufacturing, and horticulture, mainly tomatoes and cut flowers, have been declining. Financial services, construction, retail, and the public sector have been growing. Light tax and death duties make Guernsey a popular tax haven. Data centers and hosting the international e-gambling industry are also a growing part of the Guernsey economy.

CORPORATE INFORMATION

Legal System

Guernsey has its own independent system of law, which is different from that of the United Kingdom. In fact, Guernsey is just one of the islands which together form the ‘Bailiwick of Guernsey’. Within the Bailiwick, Sark and Alderney have their own systems of law, although there is a great deal of overlap between the three systems.
Guernsey’s law is founded on the customary law of Normandy, particularly where issues of land and succession are concerned. However, particularly in more recent years, a considerable amount of English-derived legislation and principles have been imported into Guernsey law.
Companies are regulated by the Companies (Guernsey) Law 2008.

Types of Entity

The principal forms of business organization in Guernsey are:
  • sole trader;
  • partnership;
  • limited partnership;
  • company limited by shares;
  • company limited by guarantee;
  • unlimited liability company;
  • mixed liability company;
  • cellular company;
  • branch of foreign company;
  • trust.

The most common structure is the company limited by shares .

REGISTRATION

Company Name

There is a range of requirements to the company name in Guernsey:
  • A company limited by shares shall have the following word or words at the end of its name – "Limited", "With limited liability", "Ltd.", "Avec responsabilité limitée", or "ARL".
  • A company cannot use the same name as a Guernsey registered company, a company that has existed on the Guernsey register in the previous 10 years or a reserved company name;
  • A company cannot use a name that is, in the opinion of the Registrar, likely to be confused with another company in Guernsey or with an established trade mark;
  • It must not be misleading, offensive, constitute a criminal offence or be the contrary to public policy;
  • Reference to bank, fund, insurance will no be accepted unless the company is actually regulated by the GFSC;
  • Any name that implies royal or government connection, support or patronage will require the permission of H M Procureur;
  • Words implying a particular type of business i.e. hairdresser, should be consistent with the company purpose;
  • Geographic locations are permitted but should no be misleading in terms of suggesting business activity occurs in a location where such activity does not occur. Please note that the use of brackets around a geographic location usually suggests registration in that location. Therefore, “(UK) Limited” would not be appropriate for a Guernsey company;
  • Words denoting professions – accountant, doctor, etc., are permitted provided that the professional memberships are genuine;
  • Symbols should be avoided;
  • Domain names may be used in a name. However, evidence may be required by the Registrar to prove that the founding member(s) are the rightful owner of that domain name;
  • Dates are permitted – typically where they relate to the date/year of incorporation;
  • Inappropriate use of religious words, profanities and suggestive words should be avoided;
  • Company names are limited to 200 characters – including spaces.

Registration

The following steps are required to incorporate a company limited by shares in Guernsey:
Check and reserve company name online: A corporate services provider may apply to the Registrar to reserve a name for a company if it intends to apply for the incorporation of that company within 3 months.
Apply for company registration: An application to incorporate must be made by a corporate services provider (“CSP”) which is any person holding a full fiduciary license within the meaning of the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000 (the “Fiduciary Law”). An application for incorporation is required to be in the prescribed form and accompanied by:
  • the memorandum of incorporation
  • the articles of incorporation
  • a statement of the first proposed directors which must include: a consent and declaration of eligibility to act as a director; where a director is an individual, the name, usual residential address, nationality, business occupation (if any) and date of birth or where a director is not an individual, the corporate or firm name (and any former name(s)), registered office, its legal form and the law by which it is governed and, if applicable, the register in which it is entered and its number
  • the proposed address of the company’s registered office
  • the name and address of the founder member
  • in the case of a company with share capital, a statement of initial share capital which must include: the total number of shares to be taken on formation by the founder member; the aggregate value of those shares whether on account of the nominal or par value of those shares; the amount to be paid up and the amount (if any) unpaid on those shares
  • a declaration of compliance of the CSP confirming that all requirements of the Companies Law in respect of the incorporation of the company have been fulfilled
  • the proposed resident agent’ s information;
  • the prescribed fee of the Register of Companies for incorporation, currently £100 for a standard 24 hour incorporation, £350 for a two hour incorporation or £750 for a 15 minute incorporation.

A certificate of incorporation will be issued on the date that the Registrar of Companies registers the memorandum and the articles in the Register of Companies.

Registered Agent

Each Guernsey company must have a resident agent of the company. A resident agent must be either a natural person resident in Guernsey, who is a director of the company; or a CSP. It is the responsibility of the resident agent to ascertain and keep a record of the ultimate beneficial owners of the company (who have an interest of 10% or more).
The following companies are not required to have a resident agent:
  • companies which are listed on a recognized stock exchange and their subsidiaries
  • open-ended and closed ended investment companies and their subsidiaries
  • companies which are licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987; Insurance Business (Bailiwick of Guernsey) Law, 2002; Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002; Banking Supervision (Bailiwick of Guernsey) Law, 1994 or the Fiduciary Law.

Local Registered Office

Each Guernsey company shall at all times have a registered office in Guernsey to which all communications and notices may be addressed. The company may change the address of its registered office by giving notice to the Registrar in the form prescribed by the Registrar. The change takes effect upon the notice being registered by the Registrar, but until the end of the period of 14 days beginning with the date on which it is registered, a person may validly serve any document on the company at its previous registered office.
Company records (register, index, record, accounting records, agreement, memorandum, articles, minutes or other document) may be kept in hard copy or electronic form, and may be arranged in such manner as the directors or secretary think fit, provided that the information in question is adequately recorded for future reference.

Seal

A company may, but need not, have one or more common seals. A common seal may be used in any jurisdiction unless the articles provide to the contrary. The name of the company shall be engraved in legible characters on its common seal.
No rule of law shall require a common seal for the valid execution of a document by the company.

Redomicile

The redomiciliation of companies to or from Guernsey is permitted.

COMPANY STRUCTURE

Directors

A Guernsey company must have a minimum of one director. Director can be resident of any country, either an individual or corporate body.
A company shall keep a register of directors at its registered office. The register of directors must be open, during ordinary business hours, to the inspection of any member or director without charge, and any other person on payment of such fee as may be prescribed by the Department.
Subject to any provision to the contrary in a company's memorandum or articles, if a director is, by any means, in communication with one or more other directors so that each director participating in the communication can hear or read what is said or communicated by each of the others, each director so participating is deemed to be present at a meeting with the other directors so participating. A meeting of directors conducted pursuant to subsection shall be deemed to be held in the place in which the chairman of the meeting is present. A company must cause minutes of all proceedings at meetings of its directors to be recorded.

Secretary

A Guernsey company may, but need not, have a secretary. A director of a company may also be its secretary.
Where a company has a secretary, he/she shall take reasonable steps to ensure –
  • that all registers and indexes are maintained in accordance with the provisions of this Law,
  • that all notices and documents required to be filed or served upon the Registrar or other persons are duly so filed or served,
  • that all resolutions, records (other than records of beneficial owners) and minutes of the company are properly kept,
  • that copies of the memorandum and articles are kept fully up to date, and
  • that the board of directors is aware of any obligations imposed by the memorandum and articles, and the rules of any stock exchange the company is listed on.

Where a company has a secretary, it shall keep a register of secretaries at its registered office.

Shareholders

All Guernsey limited companies by share must have at least one shareholder. Shareholders can be residents or non-residents, natural persons or corporate bodies.
A company shall keep a register of its members at its registered office. The register of shareholders must be open, during ordinary business hours, to the inspection of any member or director without charge, and any other person on payment of such fee as may be prescribed by the Department.
Every company shall hold a general meeting of its members. The first meeting should be held within a period of 18 months beginning on the date on which it was incorporated, thereafter, at least once in every calendar year. No more than 15 months may elapse between one annual general meeting and the next. The members of a company may waive the requirement to have a general meeting by the passing of a waiver resolution. The resolution may be for a particular year or years or for an indefinite period. Subject to the provisions of a company's articles, a general meeting may be held at any place in Guernsey or elsewhere.

Beneficiary

Despite the fact that many jurisdictions are discussing an issue of introducing an open register of beneficiaries, there is no such a register yet, including Guernsey. This means that beneficiaries’ details do not appear on a public profile. A resident director or a service provider keep beneficiaries’ information in strict confidentiality. It can only be disclosed to regulatory authorities (e.g. during examinations for its existence) or in compliance with a court order.

Share capital and Shares

Share capital may be issued in any currency. There is no minimum authorized capital requirement. Minimum issued capital is 1 share. A share is issued when the name of the holder is entered on the register of members in respect of that share.
Share certificates do not need to be issued, but the directors may elect to issue certificates. Issued certificates should bear the common signature, but there is no need to affix the common seal.
No par value shares are permitted. Bearer shares are not permitted.

TAXATION

Personal Income Tax

Guernsey tax residents pay income tax on their worldwide income.
Income tax is levied at a flat rate of 20%.

Corporate Income Tax

Tax resident companies are taxed on their worldwide income.
The corporate income tax rate is 0%, with a few exceptions when the tax rate is 10% or 20%.
The tax rate of 10% applies to certain types of banking and insurance activities, fund administration, investment management services, fiduciary business, company maintenance services, and operation of an aircraft registry.
The tax rate of 20% applies to trading activities regulated by the Competition and Regulatory Authority (such as telecommunications), importation and/or supply of gas and certain hydrocarbon products, large retail businesses (with profits exceeding GBP 500,000), real estate companies with property located in Guernsey, and some others.

Capital Gains Tax

None.

CFC Rules

None.

Withholding Tax

Guernsey does not levy withholding tax on interest, royalties or services.
Dividends paid to non-residents are also exempt from withholding tax.

VAT/Goods and Service Tax (GST)

None.

Social Security Contributions

Social security contributions are payable in respect of earnings of up to GBP 153,660 per year. The contribution rates are 6.6% for the employer and 6.6% for the employee.

Property Transfer Tax

There is a special duty payable in respect of real estate transactions and transactions with shares in companies that hold Guernsey real estate. The scale is progressive, with rates ranging from 2% to 4%.

Double Tax Agreements

Guernsey has entered a whole range of double tax and tax information exchange mechanisms:
  • 13 DTCs: Estonia, Hong Kong, Isle of Man, Jersey, Cyprus, Liechtenstein, Luxembourg, Malta, Mauritius, Monaco, Qatar, Singapore, UK.
  • 61 TIEA: Australia, Austria, Anguilla, Argentina, Bahamas, Belgium, Bermuda, British Virgin Islands, Botswana, Brazil, Bulgaria, Canada, Cayman Islands, Chile, China, Costa Rica, Czech Republic, Denmark, Faroe Islands, Finland, France, Hungary, Iceland, India, Indonesia, Ireland, Italy, Germany, Gibraltar, Greece, Greenland, Latvia, Lesotho, Lithuania, Macau, Mauritius, Mexico, Montserrat, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Saint Kitts and Nevis, San Marino, Seychelles, Slovakia, Slovenia, Spain, Swaziland, Turkey, Turks and Caicos, Sweden, Switzerland, South Africa, United Kingdom, Uruguay, USA, Japan.

Exchange Control

There are generally no restrictions on foreign exchange transactions.

ACCOUNTS

Accounting Records

The Companies Law requires a Guernsey company to keep accounting records which are sufficient to show and explain its transactions and are such as to disclose, with reasonable accuracy at any time, the financial position of the company at that time and enable the directors to ensure that any accounts prepared by the company are prepared properly and in accordance with any relevant enactments for the time being in force.
Accounting records of a Guernsey company must be kept for a period of six years, and if the original records are not kept in Guernsey, accounts and returns in respect of the business must be available in Guernsey ‘sufficient to disclose with reasonable accuracy the financial position of the business at intervals not exceeding six months’.

Financial Statements

Financial statements must be prepared annually, but there is no general requirement to file accounts with the Registrar of Companies or any public registry or body. The annual accounts should contain the following information:
  • Profit and Loss account

  • Balance Sheet

  • Statement they give a true and fair view

  • Statement they are prepared with generally accepted accounting principles
  • Disclose of accounting principles adopted
 (nearly all companies use United Kingdom (UK) or International Accounting Standards)
  • Approved by the directors and signed by at least 1 director

  • Directors must prepare an accompanying or separate report

Audit

Guernsey companies are usually required to have their accounts audited. However, the members of a company may pass a resolution exempting the company from the requirement to have its annual financial statements audited, provided the company meets the qualifying conditions set out in the Audit Exemption Regulations and it is not a regulated entity. These regulations came into force on 22 July 2008 and state that a company may be exempt if two of the following conditions are met in both the financial year and the previous financial year:
  • annual turnover less than £6.5 million,
  • net balance sheet less than £3.26 million,
  • average number of employees less than 50. 


To qualify to act as an auditor of a Guernsey company, a person must be a member of either one of the Institutes of Chartered Accountants in England and Wales, Scotland or Ireland, a member of the Chartered Association of Certified Accountants, or a member of the Association of Authorised Public Accountants. The Department of Commerce and Employment normally through the GFSC has the power to authorize a person of similar qualifications to act as an auditor. 
An auditor can be a partnership or a body corporate.

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.


Every Guernsey company is required to submit an Annual Validation return with the Guernsey Registry submitted by 31 January. The Annual Validation should contain the following information current at 31 December:
  • Registered office address

  • Details of directors as contained in Directors register

  • Confirmation that the company and Registrar have the current usual residential address of all directors

  • Details of the resident agent

  • Business category data 

  • Confirmation of whether the company is exempt from audit

  • Confirmation that the Members register is up to date

  • Number of issued shares and amounts paid-up or unpaid

  • Aggregate value of the shares

  • Distinction between shares issued for cash and those for other consideration

  • Shares redeemed during the year

  • Details of any treasury shares held

  • Declaration of compliance (a declaration, signed by a director or the secretary, confirming the requirements of the Law have been fulfilled)

There is a penalty of £100 per month for late filing.

Tax Returns

The tax year generally coincides with the calendar year.
Corporate income tax returns are filed before 30 November of the next reporting year.
The provisionally calculated tax is payable in two instalments – by 30 June and 31 December, the balancing tax payment is made within 30 days of the tax authorities issuing the final assessment.

SPECIAL LEGAL ENTITIES

Guernsey Foundations and Trusts

Among special legal entities of Guernsey the most attractive might be foundations and trusts.

Guernsey Foundations

Which law governs Guernsey Foundations?

On 25 July, 2012 the States of Deliberation, Guernsey’s parliament, approved the projet de loi The Foundations (Guernsey) Law, 2012 (the “Law”). The Law came into force as of 7 January, 2013.
The Law is separated into three parts; the substantive law itself and two schedules. The first schedule deals with administrative matters, such as the establishment of foundations and their registration. The second schedule deals with migration of foundations, their revocation, dissolution and termination.

What is a Foundation?

A Foundation entails the creation of a separate legal entity with its own legal personality distinct from the Founder(s), Council or beneficiaries. Foundations have some characteristics that are similar to those of a company as it has separate legal personality and a management board known as a Council. On the other hand it is entirely independent and has no shares and no members nor any concept of share capital.

What types of foundation are available?

The Guernsey foundation is very flexible, and can be set up for charitable or non-charitable purposes or can have beneficiaries. It can also be a hybrid, with a combination of purposes and beneficial interests.

Why endow a foundation?

In the same way that establishing a trust removes legal ownership of assets from the settlor, establishing a foundation removes assets from the individual’s patrimony (best described as “inheritance value”). A key difference is the legal personality of a foundation which is evidenced via registration at the Guernsey Registry. Foundations may also be used as holding structures for family-office private trust companies, and may be useful for debt or private equity structuring. Foundations are traditionally used for charitable or philanthropic purposes, and Guernsey foundations can be hybrids, including charitable objects and individual beneficiaries.

How are foundations created?

In Guernsey, only a licensed fiduciary may apply to register a foundation.

Registration

A Foundation will come into being upon registration by the Registrar. In order to register a Foundation the person seeking to register it must provide the Registrar with the following documents and information: the Charter, a declaration signed by the Founder (or his agent), the names and addresses of the proposed Councillors and their consents to act, the name and address of the proposed Guardian (if any) and his consent to act, the address and telephone number of the registered office of the Foundation in Guernsey and the registration fee. Provided the name is not unlawful or already taken and the purpose is not contrary to the law of Guernsey it will then be registered, given a number and a Certificate of Registration upon which point it becomes a legal person separate from its Founder, the foundation officials (the Councillors and any Guardian) or beneficiaries. The Registrar has a discretion as to whether or not a Foundation will be subject to an annual renewal process (similar to a company’s annual validation) and like companies, Foundations will be capable of perpetual existence.

What are the costs of a foundation?

The Guernsey Registry registration and annual license fees are Ј100 for a standard registration and Ј500 for the annual validation.

What is the minimum required to be endowed?

There are no legal minimum requirements, except that there must be an initial endowment (which can be a nominal sum).

What assets can be transferred to a foundation?

Most things – money, investments, land, buildings, paintings, furniture, jewellery, boats, aircraft – even fine wine. Some assets will earn income, and it is usual to account differently for capital and income, for future tax purposes.

Who are the parties to a foundation?

Basically the Founder and the Council. There might also be a Guardian.

Founder

Any person can be a founder, including a company. The Founder of a Guernsey Foundation may determine the purpose of the Foundation, decide the Foundation’s constitution and endow it with its initial capital. The Founder (or his agent) must also subscribe his name, as the Founder, to the constitution of the Foundation by signing it. It is also the Founder’s role to appoint the initial Councillors and any Guardian and to seek to have it registered. The Founder can either be a Councillor or a Guardian (but not both simultaneously) in addition to being a beneficiary.

Reservation of Powers by the Founder

In line with the approach taken on the European continent the founder can only reserve to himself limited powers which are set out in section 11 of the Law such as the power of amendment or revocation of the constitution or of the purposes of the Foundation. Such powers can be reserved only for the duration of the Founder’s life (if he is a natural person) or for 50 years from the date of establishment in the case of a legal person after which point the reserved powers will automatically lapse. This does not preclude the Council from delegating certain functions to the Founder.

Foundation Council

A Guernsey Foundation will be managed by a Council comprised of at least two Councillors unless the constitution permits a single Councillor. Natural persons or corporate bodies are both permitted. Provided one of the Councillors or the Guardian is a Guernsey licensed fiduciary the Foundation will be brought into the ambit of the regulatory regime. If neither of the Councillors, nor the Guardian, is a Guernsey licensed fiduciary, then the Foundation will require a Guernsey resident agent to hold the foundation’s records within the jurisdiction.

Beneficiary

A beneficiary of a Foundation is someone who is entitled to benefit from a Foundation. Beneficiaries must be identified by name or be ascertainable as a member of a class or by their relationship to another person. The Law provides for enfranchised and disenfranchised beneficiaries. An enfranchised beneficiary is entitled to a copy of the Constitution, records and accounts of the Foundation and to apply to the Court to change the purposes or revoke or dissolve a Foundation. Subject to the terms of the Constitution disenfranchised beneficiaries are not entitled to any information. This novel feature which is not found in any other jurisdictions may be attractive for family arrangements where there is a desire to protect the younger generations from the potentially corrosive effects of the knowledge of substantial wealth. Once the reason for a disenfranchised beneficiary’s classification (such as age) falls away they may then become an enfranchised beneficiary.

Guardian

Guernsey Foundation must have a Guardian only where there are either disenfranchised beneficiaries or where there is only a purpose but no individual beneficiaries. The Guardian’s function is to enforce the purposes of the Foundation on behalf of disenfranchised beneficiaries or, where there are no beneficiaries in substitution for them. Foundations that have beneficiaries but no disenfranchised beneficiaries are not required to have a Guardian. The Founder may act as Guardian. The Guardian will be named in the Register and may not serve on the Council at the same time. He must maintain accurate accounts and records of his guardianship.

Duties Owed

Under trust law the Trustees would owe a fiduciary duty to the beneficiaries. However, the Council of a Foundation owes its duties to the Foundation itself in much the same way as a director of a company owes the company fiduciary duties to act in the best interests of the company. The Council does not owe any duties to the beneficiaries of the Foundation.
Under s.19 of the Law the Councillors have a duty to act in good faith and en bon père de famille. The Councillors also have a duty not to profit (otherwise than as permitted by the Constitution), to preserve the Foundation property, to give information to the Guardian and enfranchised beneficiaries, to maintain accounting records, to act together with their fellow Council members and to be impartial.
A Guardian, however, owes fiduciary duties to the Founder and the beneficiaries to enforce the Constitution.

Constitution and Rules

The core document by which a Foundation is established is its Constitution. The Constitution comprises two parts; the Charter and the Rules. The Charter must contain the name and purpose of the Foundation, a description of its initial capital or endowment and, if it is a Foundation with a limited duration, that duration must be stated. It may contain anything else that the Founder wants to include.
The rules set out the operative provisions of the Foundation. As such the rules detail the functions of the Councillors, deal with the procedures for the appointment, retirement and remuneration of Councillors and any Guardian, and identify the default beneficiary. The rules may also specify other matters such as how the assets of the Foundation should be applied and how beneficiaries may be added or excluded. They may also impose obligations on a beneficiary such as a condition of benefitting or contain protective measures to terminate a beneficiaries’ interest for example if he becomes insolvent or otherwise.

Is there a fixed time period?

No, a Guernsey foundation can be perpetual.

Must financial statements of a foundation be prepared and audited?

Accounting records must be maintained by law. We don’t believe that we can manage the foundation assets properly if we don’t have good accounting records, so we always prepare annual financial statements. There is no requirement for audit.

Are the details of the foundation kept at the Guernsey Registry?

Section 4 of the First Schedule of the Law sets out the information which will be publicly available in Part A of the Register. This includes: the name and registered number of the Foundation, the name and address of the Councillors appointed to act, the name and address of the Guardian (if there is one) and the details of the registered office. In addition the registrar shall maintain a non-public Part B of the register which shall include all declarations and other documents filed with the Registrar in accordance with the Law.

Are the regulators empowered to request the production of information on the identity and background of the founder and beneficiaries?

The identity of the founder is disclosed to the Guernsey Registry. Certain other information may be disclosed to the regulator via the local council member or resident agent, but only under certain strict circumstances.

Are the regulators empowered to request the production of accounting information on foundations?

Only via the local council member or registered agent, under certain strict circumstances.

Can such information be exchanged with other jurisdictions?

Only upon official request or order, only where legal gateways exist, and strictly subject to the rules of those gateways.

Are there any exchange control or other financial restraints?

No.

Is migration of foundations permitted?

Yes, an overseas foundation can apply to be registered as a Guernsey foundation.

Guernsey Trusts

Which law governs Guernsey Trusts?

The Trusts (Guernsey) Law, 2007

What types of Trust are available?

Discretionary Trusts, Accumulation Trusts, Non-charitable Purpose Trusts, Interest in Possession Trusts, and any combination of these (hybrids).

What is a Trust?

Unlike a Company, a trust has no ”legal personality” – it is not a legal entity in its own right. It is basically a contract, whereby the economic donor (settlor) gives assets to a trusted individual or company (trustee) to hold in their own name and administer for the benefit of certain others (the beneficiaries).

Why settle a trust?

The act of giving away or divesting the assets to the trustees removes legal ownership from the settlor. This has certain advantages for some taxation rules, and can help to shield assets from attack by a third party.

What type of trust is preferred for international transactions?

Discretionary trusts with beneficiaries have traditionally been used for asset protection and tax planning, but every case is different and a trust should be formulated to serve the specific needs of each case.

What are the capital requirements?

There are no legal requirements, but a trustee has to act in the best interests of the beneficiaries. If the asset base of a trust (corpus) is not sufficient to warrant its costs, the trustees are unlikely to accept trusteeship. Any currencies are permitted.

What can be settled into a trust?

Most things – money, investments, land, buildings, paintings, furniture, jewellery, boats, aircraft – even fine wines. Some assets will earn income, and it is usual to account differently within the trust for capital and income.

How are trusts created?

A trust is a contract, so it is created when the contract is entered into, usually by the signing of a Trust Deed. Trusts must meet “the three certainties”: there must be an expressed wish to create the trust, there must be defined assets placed into the trust, and there must be clear objects (beneficiaries or a purpose).

Who can be a settlor?

Most people, and corporate settlors are also allowed.

Who can be the trustees?

Only a licensee (Regulated Fiduciary licence holder).

What is a Protector?

Protectors act as an agent of the settlor with certain powers (such as the right to replace the trustees) which are defined in the trust deed. Protectors can give comfort, but if awarded too many powers they can make a trust difficult to manage. Enforcers perform a similar function for Purpose Trusts.

Is there an annual filing to the Registry?

No, Guernsey does not require trusts to be registered.

Must financial statements of a trust be prepared and audited?

It is not required but recommended to prepare financial statements. There is no requirement for audit.

Are annual accounts filed at the Registry?

No.

Are the details of the trust kept at the Guernsey Registry?

No. There is no requirement to register trusts and no central database of trusts.

Are the regulators empowered to request the production of information on the identity and background of settlors and beneficiaries?

Yes, via the trustees, under certain strict circumstances.

Are the regulators empowered to request the production of accounting information on trusts?

Yes, from the trustees, under certain strict circumstances.

Can such information be exchanged with other jurisdictions?

Only upon official request or order, only where legal gateways exist, and strictly subject to the rules of those gateways.

Are there any exchange control or other financial restraints?

No.

Is migration of trusts permitted?

Yes in principle, but this will depend on the terms of the trust deed.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
No based on the principles of Norman French and English common law 13 No Yes

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Companies (Guernsey) Law, 2008 companies
Incorporated Cell Companies Ordinance, 2006 incorporated cell companies
Protected Cell Companies Ordinance, 1997 protected cell companies
Competition (Guernsey) Ordinance, 2012 competition
The Trade Marks (Bailiwick of Guernsey) Ordinance, 2006 trade marks
Document Duty Ordinance, 2003 document duty
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989 income tax
Foreign Tax (Retention Arrangements) (Guernsey and Alderney) Ordinance, 2005 foreign tax
Property Tax (Rates) (Guernsey and Alderney) Ordinance, 2013 property tax
Gambling (Betting) Ordinance, 1973 betting
Gambling (Casino Gaming), 2001 casino gaming
Tax treaties entered Estonia, Hong Kong, Isle of Man, Jersey, Cyprus, Liechtenstein, Luxembourg, Malta, Mauritius, Monaco, Qatar, Singapore, UK.
Tax Exchange Information Agreement (TEIA) Australia, Austria, Anguilla, Argentina, Bahamas, Belgium, Bermuda, British Virgin Islands, Botswana, Brazil, Bulgaria, Canada, Cayman Islands, Chile, China, Costa Rica, Czech Republic, Denmark, Faroe Islands, Finland, France, Hungary, Iceland, India, Indonesia, Ireland, Italy, Germany, Gibraltar, Greece, Greenland, Latvia, Lesotho, Lithuania, Macau, Mauritius, Mexico, Montserrat, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Saint Kitts and Nevis, San Marino, Seychelles, Slovakia, Slovenia, Spain, Swaziland, Turkey, Turks and Caicos, Sweden, Switzerland, South Africa, United Kingdom, Uruguay, USA, Japan.
List of state regulatory authorities
States of Guernsey https://www.gov.gg/
Guernsey Registry http://www.guernseyregistry.com
Guernsey Registry Online Services Portal https://www.greg.gg/webLogin.aspx
Guernsey Financial Services Commission http://www.gfsc.gg/The-Commission/Pages/Home.aspx
Intellectual Property Office http://ipo.guernseyregistry.com
Channel Islands Competition and Regulatory Authorities http://www.cicra.gg
Royal Court of Guernsey http://www.guernseyroyalcourt.gg
Guernsey Police http://www.guernsey.police.uk
Guernsey International Business Association http://www.giba.gg
Guernsey Society of Chartered and Certified Accountants http://www.gscca.gg
Guernsey Bar http://www.guernseybar.com
Guernsey Legal Resource http://www.guernseylegalresources.gg/

    Юридический партнер обзора:

    Albecq Trust Company Limited

    An independent, owner-directed trust company operating from Guernsey in the Channel Islands, Albecq was formed by three experienced trust professionals in order to offer exceptional levels of service to their clients, whether they are individuals, family offices or intermediaries. Albecq is a full-service fiduciary group, licensed to provide a wide range of trust and corporate services. Our principal services include company formation, management and administration; corporate secretarial services; trust formation, management and administration; family office services; administration of managed trust companies; administration of private trust companies; nominee services; etc.

    Guernsey Company Formation

    Dixcart

    Dixcart is an international professional services company providing corporate management and trustee services from ten offices: Guernsey, Isle of Man, Madeira, Malta, Nevis, Switzerland, United Kingdom, South Africa, Cyprus, and Ireland. Dixcart is an independent group, established over 40 years ago and employing over 160 staff. Approximately 65% of our staff are professionally qualified accountants, lawyers, STEP members or company secretaries.

    Guernsey Company Formation

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