Originally published in International Financial Services Guide, Wealth Management, 2008
Over the last four decades Guernsey has established itself as a leading international finance centre with the highest reputation and standards, providing an extensive range of products and services to a global market. The Island's mature, innovative and service-oriented financial services sector is based on a balanced range of providers, broadly comprising:
Banking
The first merchant bank was established in 1963 and today there are 50 licensed banks in the Island with deposits of more than £112bn – up 26% year on year.
International banking groups with head offices in Switzerland, Europe, USA, the United Kingdom and other international locations have established subsidiaries on the Island. The sector provides products ranging from retail banking and savings through international wealth management to institutional business and specialist lending. Importantly it also services the other sectors of the Island's finance industry.
Investment Funds
The funds sector is benefitting from a series of changes that have made it quicker and simpler to conduct business in the Island. The value of funds under management and administration is now in excess of £164bn – an increase of 36% during the year.
The Island plays host to an extensive array of investment businesses who in combination offer a range of products and services for both retail and institutional investors from the general to the more specialised. The Island is growing a reputation as a centre of excellence for alternative investments.
Insurance
Guernsey has an international insurance industry that provides a range of risk management solutions but is particularly renowned for its captive expertise. Since the first captive insurance company was formed in Guernsey in 1922 the Island has become the leading captive insurance domicile in Europe and is in the top four in the world.
In 1997 the Island pioneered the protected cell company (PCC) concept in response to the needs of its pre-eminent captive insurance industry. Guernsey has since also introduced the innovative Incorporated Cell Company (ICC) concept.
Fiduciary Services
Guernsey is a leading international fiduciary centre with over 50 years experience of supplying trust and corporate services.
The Island plays host to some 140 licensed fiduciaries, ranging from large organisations to independent, boutique operations, holding more than £200bn of assets in trust.
Amendments to the Island's Trust Law, which include abolishing the personal liability of directors in Private Trust Companies (PTCs) and introducing Purpose Trusts, are expected to be introduced early in 2008. Work continues on the introduction of Foundations.
Business-Friendly Environment
Work is on-going to improve the Island's already business-friendly environment: on 1 January 2008, the Island moved to a standard zero rate of corporate tax (and there is already no withholding tax on dividends paid, no capital gains tax, no inheritance tax and no value added or general sales tax); a new Companies Law is set to come on-stream during 2008 – it will introduce a streamlined company incorporation process that from the summer of 2008 will be facilitated by a modernised Company Registry; and also during 2008, a suite of IP-related legislation will continue to be introduced to the market.
Guernsey can also boast an independent regulator the Guernsey Financial Services Commission (GFSC), which is renowned for robust yet pragmatic regulation. It is through scrutinisation and endorsement from third parties such as the International Monetary Fund and the Financial Action Task Force that Guernsey can justify its claim to be a well regulated and first-class international finance centre.
For more information about Guernsey's finance industry please visit
www.guernseyfinance.comThe content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
