Guernsey: Guernsey - A Perfect Domicile Choice

Last Updated: 7 February 2013
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, October 2017

There is an ever growing awareness among investors and promoters of the importance of looking towards jurisdictions with quality service provision, strong corporate governance and robust yet pragmatic regulation.

This change in emphasis and focus on improved standards which was accelerated by the global financial crisis in 2008 was long overdue and thankfully, it has been to Guernsey's advantage as we see these factors among our greatest assets as a fund domicile. It is why Guernsey continues to be consistently placed within the very top tier of fund domiciles and remains particularly attractive to investors and promoters seeking out quality.

Indeed, a 2012 survey carried out independently by on the future of the UK offshore domiciles found that 24% of managers have their funds serviced from Guernsey, followed by the UK (20%) and Ireland (18%). A key finding from the representative sample of 50 UK-based alternative investment managers was that Guernsey was considered the jurisdiction of choice for private equity. Comments from managers in the research included Guernsey having 'the reputation of being a stable domicile with a good regulator and solid reputation'; while another said they liked 'Guernsey because of the quality of its service providers and the ease of access from London.'


The value of funds under management and administration in the Island reached more than £274.4 billion ($442 billion) at the end of September 2012 – up 12.8 percent on the same time two years ago, with private equity comprising more than £80billion ($129 billion). Guernsey's expertise in the private equity space was confirmed by a Private Equity News and State Street survey, in which 61 percent of chief financial officers who responded said the Island was their preferred destination for private equity outsourcing.

This is aided by Guernsey's fund industry boasting a heritage that stretches back half a century and means the Island has built a wealth of expertise and first class infrastructure for the structuring, management, administration and custody of the widest range of funds, including institutional, retail, alternative and niche funds. The broad selection of administrators in Guernsey ranges from independent, boutique providers – including Alter Domus, Augentius, Aztec, International Administration Group (IAG) and Ipes – to large, multinational organisations such as JP Morgan, Northern Trust, RBC and State Street who can also act as custodians.

Guernsey has more than 50 fund managers, administrators and custodians, whose primary business relates to both open and closed-ended funds, which are now promoted and sponsored by leading institutions in more than 55 financial centres globally. Statistics from the Guernsey Financial Services Commission (GFSC) show that 56 new open and closed-ended funds were licensed in the Island during the first nine months of 2012.

A major advantage of using Guernsey entities is that they can be listed on the London Stock Exchange (LSE), Euronext Amsterdam, the local Channel Islands Stock Exchange (CISX) based in Guernsey and the Hong Kong Stock Exchange (HKEx), among others. Indeed, Guernsey has the most companies listed on the London Stock Exchange, across the Main Market, AIM and the Specialist Fund Market, of any jurisdiction outside of the UK.

Fund managers can also draw upon the services provided by the Island's banking, wealth management and risk management sectors, which are supported by a comprehensive network of investment, legal, tax, audit, accounting and actuarial advisers, including multi-jurisdictional law firms and global accountancy firms.


This expertise and infrastructure means Guernsey providers are often asked to service schemes domiciled in another jurisdiction, such as Cayman. Statistics from the GFSC show that for the year to September 2012, the Island's service providers entered into 33 new contracts to provide either management, administration or custody services to non-Guernsey schemes.

It is not unheard of for promoters to be so satisfied with their experience of the Island through the 'non-Guernsey' route that they decide to re-domicile their funds to Guernsey. Certainly, this can provide more weight and substance from a tax and regulatory perspective as the majority of services are provided from the jurisdiction in which the fund is domiciled. Many Cayman funds are currently administered in Dublin and so the advent of the Alternative Investment Fund Managers Directive (AIFMD) may see increasing numbers of promoters considering a jurisdiction, such as Guernsey, which will be able to offer both an AIFMD compliant regime and a regime not subject to AIFMD. This may be particularly relevant where a significant proportion of the investor base is non-EU and where parallel structures may be required.


Where managers are looking to have their funds administered by a third party where the fund is domiciled, Guernsey can provide the substance required but local managers will need to be mindful of the interpretation of substance for the purposes of the Directive. AIFMD means the delegation of investment management functions will have to be carefully considered going forward and not exceed the margins set out in the Directive's legislation. The future AIFMD requirements also state that a manager should be able to demonstrate evidence that there is adequate substance within the Guernsey operation and that managers are not merely using the location as a 'letter box entity.'

As another way of addressing the need for sufficient substance, some managers may also be looking to establish their own offshore operation in Guernsey. For example, BlueCrest Capital, the third largest hedge fund manager in Europe, relocated its headquarters from London to Guernsey in 2010. Private equity houses with offices in Guernsey include Apax, BC Partners, EQT, Permira and Terra Firma. Indeed, not only did Terra Firma Chairman Guy Hands establish an office in the Island, he now lives in Guernsey. Another significant player in the private equity industry, Jon Moulton, Chairman of Better Capital, also owns a home in Guernsey and his investment company is domiciled and administered in the Island.

International engagement

The way the Island was fully engaged regarding AIFMD from the beginning has demonstrated our knowledge, understanding and commitment to the funds industry. It was also why Guernsey was able to confirm at the end of last year that in relation to AIFMD it will be offering two parallel regulatory regimes for investment funds in order to best meet client needs going forward.

Guernsey will be operating a full AIFMD equivalent regime for those EU investors and managers who are obliged to take this route or any investors or managers who choose this as their preferred option, while for non-EU investors and managers, investing in the EU and globally, there will remain a parallel regime with its own appropriate set of regulations. Our well-progressed preparations and the nature of Guernsey fund regulation mean that we intend to introduce the new regime as early as July 2013, which is the deadline for the AIFMD rules to be transposed into local law. This will enable distribution of our products into countries that align their private placement rules with AIFMD. In addition, we will be applying for our regime to receive third country passporting status as soon as that option becomes available, which is expected to be July 2015.

The bottom line is that Guernsey is well prepared for AIFMD and we believe that our approach means that managers will continue to use the Island because we will offer the full range of services to both EU and non-EU investors and managers. We recognise that we have clients whose business does not touch the EU at all in terms of management or marketing of funds and it is important that these clients have the choice to elect to fall under the AIFMD regime or remain outside, as is their right. In being able to offer both EU and non-EU solutions from one location, Guernsey will be ideally placed to serve the global fund industry - because while we recognise that Europe remains our main source of business, we also respect the fact that other markets, particularly the emerging markets, offer exciting opportunities.


A major attraction of domiciling funds in Guernsey within this post-crisis environment where investors are demanding higher standards is that the GFSC has established a reputation for its robust yet pragmatic approach to regulation. For example, 'fast track' routes have been introduced which allow for the speedy launch of funds targeted at professional investors and yet, those investors also have the security of knowing that all Guernsey funds are regulated. In addition, the GFSC is a member of IOSCO, the International Organisation of Securities Commissions and ensures that funds follow the appropriate local and international regulatory standards.

Funds must also abide by the relevant local and international codes of corporate governance and so the fact that the Island has a pool of experienced and well qualified non-executive directors reassures investors and promoters that Guernsey service providers are working to the highest standards. Indeed, Guernsey's position as a well regulated, cooperative and transparent jurisdiction has been reinforced by the fact that external agencies such as the IMF, OECD and Financial Stability Board (FSB) continue to place Guernsey within the very top tier of leading international finance centres globally.

Guernsey was among the first set of jurisdictions placed on the OECD 'whitelist' in 2009 and subsequent Global Forum reports have continued to recognise the Island as within the top tier of jurisdictions meeting international standards and thereby helping to protect global stability. To date, Guernsey has signed Tax Information Exchange Agreements with 38 jurisdictions and 13 Double Taxation Arrangements. Industry and local government continue to work on extending our DTA network and there are several other agreements in the pipeline which should enhance Guernsey's attraction as a global fund domicile. The formal ratification of Guernsey's zero-10 corporate tax regime in December last year by the EU's Economic and Financial Affairs Council (ECOFIN) provides an additional layer of reassurance for investors and managers that Guernsey is a jurisdiction which is willing and able to move quickly to ensure it continues to meet international tax standards, while also retaining its position as an extremely competitive place to do business.

All financial services products for our international client base will continue to be taxed at a zero rate and managers and promoters have the certainty of knowing that our tax exempt regime for collective investment schemes also remains in place. In fact, the regime was modernised in September 2011, updating the definitions of bodies which can be granted exempt status, which means the status now applies to any body forming part of the structure under which the scheme as a whole operates.

Future of funds

In the post-crisis environment, investors are demanding higher standards and therefore promoters and managers need to be able to make sure they can meet these expectations. Guernsey's long standing expertise and infrastructure, combined with its robust yet pragmatic regulation, strong corporate governance, tax neutrality and swift response to AIFMD means that it is ideally placed to be the global fund domicile of the future.

For more information about Guernsey's finance industry please visit

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.