The Income Tax (International Bodies) (Guernsey) Law, 1993 introduced the "International Company" which allows individuals and international corporations to use a Guernsey based entity on a tax efficient basis.
Although an International Company is treated as resident for the purposes of the Income Tax Law and must comply with the law, for example, in the computation of business profits, it does not pay the standard 20% rate of tax. The percentage of tax paid is discussed with the Income Tax Authority and agreed at a rate above zero but not more than 30%.
International Company status is available to Guernsey incorporated companies owned by non-residents of the Island, to companies incorporated elsewhere, to branches of foreign companies and to limited partnerships.
Examples of international activities for which an International Company may be appropriate include group financing operations, new captive insurance companies, industrial and commercial activities and overseas investment.
International Company status is not available to either a bank, or a registered exempt insurer, or a company which, under the Income Tax Law, has held a previous tax status in Guernsey, either resident or exempt.
The tax rate, once agreed, is set for a five year term. Since the legislation was introduced, one hundred and twenty companies have received International Company status.
This article provides a general outline on the subject at the time of writing. It is not intended to be exhaustive nor to provide legal advice in relation to any particular situation and should not be acted on or relied upon without taking specific advice.