Guernsey: Guernsey Foundations Explained

Last Updated: 10 June 2013
Article by Gavin Ferguson

Most Read Contributor in Guernsey, September 2016

Now the Foundations (Guernsey) Law, 2012 (the Law) is in force, Gavin Ferguson, Managing Partner at Appleby in Guernsey, recaps on why Guernsey introduced the Law, looking at the key features and uses of the Law and also speculating on the future of Guernsey foundations.

Why did Guernsey bring this civil law concept onto its statute books? Wind the clock back nearly nine years to 2004 - the States of Guernsey's Economic Development Unit set up a Working Party to look at the then Guernsey trust statute and how it could be improved. With the primary objective of considering what would work best for Guernsey's finance industry, the Working Party extended its remit and also considered the introduction of a new foundation vehicle into Guernsey law.

However, it wasn't until a few years thereafter that a draft law was prepared by the Law Officers draftsmen, who consulted with leading independent experts and then with Guernsey's fiduciary industry. The delay in preparing the Law was due to a number of factors including:

  • the drafting of a new trusts statute;
  • the drafting of substantial updates to Guernsey's company legislation;
  • consideration of some concerns raised over the introduction into Guernsey of a concept which had come under criticism in less well regulated jurisdictions; and
  • the introduction by our sister island Jersey, of its foundations legislation in 2009 - from which it was useful to see if there were any lessons that could be learnt from how their law was received.

Key features of the Law

As a result of careful drafting and consultation, Guernsey has a foundations law which looks and feels more like a traditional civil law foundation than some of its competitor jurisdiction, but which incorporates some innovative aspects. Some of the key features include:

1. The incorporation of provisions (similar to that in the Trusts (Guernsey) Law, 2007) protecting Guernsey foundations from foreign rules of forced heirship and foreign court orders.

2. The creation of two categories' of beneficiaries:

  • those with certain rights to information relating to the foundation, including accounting information and copies of the constitutional documents - called 'enfranchised' beneficiaries; and
  • those with no rights to such information - called 'disenfranchised' beneficiaries.

In the case of 'disenfranchised' beneficiaries, there must be a guardian of the foundation who has a positive duty to both the founder and the beneficiaries to enforce the constitution and purpose of the foundation. Such positions do not need to be fixed, it is possible to make a beneficiary's status of 'enfranchised' or 'disenfranchised' conditional upon an event, for example attaining a specified age. Where the constitution is silent as to a beneficiary's rights to information relating to the foundation, the beneficiary will be deemed to be 'enfranchised'.

3. A guardian is also required where there are purposes. This is akin to the role of an enforcer of a non-charitable purpose trust. Unlike Jersey's foundations law, it is optional, other than where there are disenfranchised' beneficiaries or purposes, whether or not to have a guardian. Another difference between the Guernsey law and the Jersey law in respect of guardians is that the Guernsey law will not permit the guardian to be a council member. This makes sense in terms of the role of the guardian; their purpose is to safeguard the rights of 'disenfranchised' beneficiaries and purposes from council mismanagement, as otherwise there would be no-one capable of supervising the council.

4. The possibility of having neither a council member nor guardian who is a Guernsey licensed fiduciary or "authorised person"; in which case there must be a "Resident Agent". Resident Agents must be a Guernsey licensed fiduciary or authorized person, resident in Guernsey and have rights to view such information as is necessary to ensure compliance with their fiduciary duties.

5. Finally the reservation of powers - the founder can retain the power to amend the foundation's constitution and purpose and also the power to terminate the foundation (for life, or 50 years if a corporate). They can also, in principle, be involved in the running of the foundation directly either via being a council member, guardian or power holder (a person with positive powers, for example to appoint and remove foundation officials, or consensual powers, i.e. where their consent must be sought before certain powers are exercised by the council). As with all fiduciary structures, great care needs to be taken when considering what powers/combination of powers the person creating the structure retains.

Parties to a foundation and typical structure

The diagram shows the potential parties to a typical Guernsey foundation, noting there is no one size fits all, every foundation will be specific to a particular client's requirements:

How to set up a Guernsey foundation

There are two principal stages (i) the 'creation' when the founder signs their name to the constitutional documents and endows the foundation with its initial property, and (ii) the 'establishment' when the Guernsey Foundation Registrar assigns the foundation with a registration number at which time the foundation has separate legal personality.

In respect of applying to have a Guernsey foundation 'established', only a Guernsey licensed fiduciary can make the application. To do so they must file with the Foundation Registrar: a declaration signed by the founder (or his registered agent) approving the details set out in the charter, the applicable registration fee (GBP100 for a 24 hour incorporation or GBP350 for a two hour incorporation) and other details set out in the Law such as a copy of the Charter, the names and addresses of the councillors and guardian (if any) and their written consent to take up their position. Upon receiving the required information, the Registrar will inscribe the foundation's name on the

Register, allocate a registration number and issue a certificate of registration. The certificate will state the name and registered number of the foundation, its registered office, its date of establishment and its duration (which may be unlimited), and the signed copy will be evidence of compliance with the registration requirements.

Once registered, certain information will be publicly available including the name and registered office of the foundation, the name and address of the council members and guardian (if any). Unlike some other jurisdictions, although the Registrar sees the Charter it is not made public.

Key uses

As with trusts, foundations can have multiple uses including in respect of private, charitable and corporate purposes, and can be incorporated into a variety of potential structures tailored to best suit a particular client's needs.


Foundations may be particularly attractive as a simple alternative to trusts for private clients, especially those from civil law jurisdictions for whom the concept of a trust may be unfamiliar or who would like a wealth management entity which would be easily recognised by third parties in their home jurisdiction. Such a foundation can be highly flexible in respect of how long it lasts, how the founder may remain involved in the administration, how much information beneficiaries are entitled to etc. As with trusts, foundations may also be a suitable vehicle for asset protection as they divorce the ownership of the assets from the founder. Foundations can also be used as part of larger wealth management structures including acting as trustee of a trust, holding the shares of a private trust company, or acting as an umbrella entity holding various companies or assets.


Philanthropic founders may be particularly attracted to the foundation as an alternative to the trust simply for the positive connotations - the majority of the world's largest charitable bodies have the word 'foundation' in their name notwithstanding they are not in fact 'foundations' but companies or trusts. There is also the added benefit that the foundation's purposes do not have to be exclusively charitable.


Since foundations (unlike companies) do not have shareholders and may also be free from beneficiaries, they are an ideal 'orphan' vehicle. As such, in addition to being a suitable alternative to noncharitable purpose trusts for holding shares in a private trust company, they are also suitable for off-balance sheet structuring, subordinated debt and private equity structuring.

Where are we now and where will we be going?

On the first day it was possible to establish a Guernsey foundation, four foundations were registered with the Foundations Registry. The purposes of these foundations includes (i) wealth planning (ii) philanthrophy and (iii) for a non-charitable purpose. I believe these are the three principle uses we will see (albeit some with a twist), and possibly in a fairly even split. I have no doubt that with time more innovative uses will develop.

It is still early days and difficult to forecast with confidence the future of Guernsey foundations. Although I do not anticipate the Foundations Registry being swamped with new applications, from the enquiries and instructions I am currently working on, I do know that a number of the new Guernsey foundations will be of significant value. This is consistent with what I have said on a number of occasions; gone are the days of high volume low value fiduciary work, here are the days of high value low(er) volume work - such high value clients emanating from civil law jurisdictions including Eastern Europe, the Middle East, and Latin America and these are the clients who may well prefer a foundation structure over a trust structure.

In addition to new instructions, I am currently working on a potential migration of a foundation into Guernsey. This may be attractive for those wanting to benefit from the foundation being run from a jurisdiction with a robust financial services regime, a highly respect judiciary and a stable economic and political government and economy.

Originally published in Offshore Investment, May 2013.

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
Mondaq Advice Centre (MACs)
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.


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.