Setting up a business in Guernsey

 

Introduction

The principal legislation relating to companies is the Companies (Guernsey) Law, 1908 and 1990. Under this legislation it is possible to incorporate only private or public companies. According to the tax status, all companies are divided into resident and non-resident (exempt) companies.

The type of company used for international trade and investment is the exempt company. Companies which are incorporated in Guernsey, but which are owned by non-residents of Guernsey and which do not deal with natural or legal persons resident in Guernsey, may be granted exempt status in Guernsey. A Guernsey company has all the powers of a natural person. The language of legislation and corporate documentation is English. There are no specific statutory provisions governing corporate secrecy, but English law, which applies to the jurisdiction, imposes a common law duty on professionals to maintain the confidentiality of their clients' affairs.

Companies are subject to the following restrictions on trade and business activity: a Guernsey Exempt Company is not permitted to trade within Guernsey or to carry on any business related to the banking, financial and insurance sectors.

The incorporation procedure involves the submission of the Memorandum and Articles of Association to the Financial Services Department. The registered office must be informed of the personal data of the directors and shareholders, and character references for the beneficial owners must be provided, as well as a full description of the trading and/or investment activities of the proposed company.

A registered office must be maintained in Guernsey. Commercially available companies are not available due to the requirement to disclose beneficial ownership and trading activities.

 

Création de sociétés à Guernesey

 

Company names are subject to the following conditions:

Names must be approved by making a formal application to the Financial Services Commission.

  • The name of a company registered in Guernsey can be in any language using the Latin alphabet.
  • A name similar or identical to that of an existing corporation or registered entity is unacceptable.
  • Names of well-known multinational companies are unacceptable without prior written consent.
  • Names involving illegal activities are not allowed.
  • Names involving royal or government sponsorship, local or foreign, are not permitted.
  • The following names and their derivatives: Guernsey, Bank, Société de Crédit Foncier, Savings, Loans, Insurance, Reinsurance, Chamber of Commerce, Council, Co-operative, Trust, Fiduciary, Finance, International or their foreign language equivalents require a Consent or License.
  • The names of limited liability companies must have the suffix Limited or Ltd, or the French equivalent Societe avec Responsabilité Limitee or SARL.

At least one director is required and corporate directors are allowed. There is no requirement to have resident directors. A company secretary is required who may be a natural or legal person, may be of any nationality and need not be resident in Guernsey. The minimum number of shareholders is two. Corporate shareholders are permitted. Details of the beneficial owner of the company must be given to the Guernsey authorities, but secrecy provisions protect this information. A share register must be kept at the address of the company's registered office. Details of shareholders and directors are kept in the public files of the company register, but anonymity may be preserved through the use of nominee shareholders or third party directors.

The normal authorised share capital is GBP 10 000 (or the equivalent in foreign currency), although the minimum authorised capital may be a nominal GBP 2, normally with two shares of GBP 1, or the equivalent in foreign currency. All shares issued must be paid in full in cash.
The following classes of shares are authorized: registered shares, preferred shares, redeemable shares, non-redeemable shares and shares with or without voting rights. Bearer shares are not permitted.

 

Annual taxation and fees

Exempt companies in Guernsey do not pay tax in Guernsey but are subject to a flat rate corporate tax of GBP 600 per annum, regardless of profit.

Guernsey has signed double taxation agreements, which provide for an exchange of information with Jersey and the United Kingdom.

 

The financial statements are subject to the following requirements:

The Public Accountability Statement provides details of current directors and shareholders and any changes in shareholders since the last statement. The declaration must be filed with the public register in January each year and a filing fee of GBP 100 is payable. If a company fails to file its annual return by the due date, a penalty is payable.

The Guernsey authorities expect a new Companies Law to be introduced in 2008 under which normal businesses will not pay tax and companies regulated by the Financial Services Commission will pay 10% tax.

 

Economy and infrastructure

The financial services sector provides Guernsey's main source of income and tourism has always been a very important aspect of the island's economy. There are a variety of other less important sources of income, including agriculture and fishing.

Air services from Guernsey are excellent, with services to London being particularly frequent. There are also flights to many European centres, including Paris and Amsterdam. Guernsey, like Jersey, depends on sea transport for the importation of most goods. The Channel Islands have an excellent telecommunications system, as they use the British digital network.

The Channel Islands are in a very favourable position due to their proximity to the United Kingdom and the mainland, and although free trade legislation adopted by the European Community applies to the island, tax planning policy does not affect Guernsey. The currency is the pound sterling (GBP) and there are no exchange controls.