Guernsey has its own distinct Company Law. In 1994 the existing Company Laws dating from 1908 were consolidated into the Companies Law (Guernsey) 1994. The new law is written in English and includes certain amendments and additions to previous laws.

Many thousands of such companies are administered in Guernsey by fiduciaries who provide the directors and officers a well as secretarial and accounting services to assist clients in the management of their corporate affairs. Clients find many uses for companies in Guernsey, including the following:-

  • As a vehicle for holding all types of investments including real estate, Stock Exchange investments and intellectual property;
  • As a vehicle for trading internationally;
  • For world-wide fiscal reasons;
  • As a means of simplifying transmission on the death of the beneficial owners which can prove cumbersome, especially if more than one jurisdiction is involved.

All companies incorporated in Guernsey are limited liability companies and there is no distinction between private and public companies. This does not preclude shares in the company being offered for subscription to the public and quoted on the Stock Exchange, subject to the consent of the Guernsey authorities.


For a foreign national considering the formation of a Guernsey limited liability company, it is important from the outset to consider how the proposed company is to be treated for tax purposes. For fiscal purposes a limited liability company can be an income tax company, an 'exempt' company or an international company (IC).

A. A resident Company pays 20% Income Tax on its annual taxable profits.

B. Companies operating internationally, which are not owned by Guernsey residents and do not trade in Guernsey, may apply for exempt status and pay an annual exemption fee of £500 with no further tax payable locally on their profits. Exempt companies are generally used to hold assets or investment portfolios or intellectual property rights such as trademarks, patents and copyrights. Directors of exempt companies may be Guernsey residents and board meetings may be held in the Island.

C. In 1993 Guernsey introduced a form of offshore company known as an international Company (IC) having the choice of paying an agreed rate of tax ranging from something more than zero up to a maximum of 30% depending upon the parent company's need to optimise its global tax position. An IC must be beneficially owned outside Guernsey and must not derive any of its trading income from within the Island. The tax rate for an individual IC may be set for up to five years.


The incorporation of a Guernsey company can usually be completed in a few days and it is advisable to submit at least three suggested names for approval. All companies must be formed by a local Guernsey advocate and consent is at all times required from the Financial Services Commission which requires disclosure to it on a confidential basis of beneficial ownership. Once permission has been given, the company will then be registered by the Greffe (Registry).

It is common practise for the issued shares to be held in the name of nominee shareholders provided by the local fiduciary, thus preserving the anonymity of the beneficial owner. The nominees provide the beneficial owners with legally binding Declarations of Trust which acknowledge the owner's unfettered ownership of the shares. The company comes into existence when the Memorandum and Articles of Association have been approved by the Royal Court and registered. The subscribers then nominate the first Director or directors. Once those Directors have held their first meeting the company may commence business.

There is no statutory limit on the amount of the initial authorised capital. It is usual practise, however, for a company to be incorporated with an authorised share capital of £10,000 or the currency equivalent thereof, as this represents the minimum level at which Stamp Duty is payable. There is no requirement to issue all the authorised share capital but upon incorporation a company must issue a minimum of two shares. Stamp Duty is levied on the authorised share capital at the rate of 0.5% with a minimum of £50 and a maximum of £5,000. So long as the Articles of Association permit and the Shareholders agree by special resolution, the share capital of the company may be reduced, increased or restructured. Reduction of capital also requires the approval of the Royal Court.

Shares of any nominal value may be issued in any currency and of any fixed nominal value, the most common choice being sterling. Bearer shares are not allowed. Shares may be of different classes, e.g. ordinary, preference, etc. with different voting, dividend or other rights. There are no restrictions as to the nationality or the residence of shareholders.

A Guernsey company must have its registered office on the Island where the registers of shareholders and directors and minute books must be kept.

Each January a return has to be filed detailing the names of the shareholders appearing on the register which must be accompanied by the payment of document duty of £100. Both the register and annual return are available for public scrutiny but there is no requirement to disclose who is behind nominee holdings. Shares are freely transferable unless the Articles of Association provide to the contrary and there is no Stamp Duty payable on share transfers. Every company must hold an annual general meeting of its shareholders who may be represented by proxy. General meetings may be held anywhere in the world.

A Guernsey company is managed by its Board of Directors and minutes of all directors' meetings must be kept. None of the directors or officers of the company need be resident in Guernsey. The names and address of the directors in office at 1st January each year must be included in the annual return mentioned above. Meetings of directors may take place in Guernsey or outside.

Every company must keep accounting records and is required to have its annual financial statements audited except a dormant or asset holding company with ten or less members, which can elect to dispense with an audit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.