Guernsey is a leading financial centre of the highest reputation and standards. The jurisdiction is one of the most established, transparent and well-regulated international financial centres and was placed on the OECD G20 "white list" in 2009, which reflects high standards of international compliance and transparency. Guernsey's continuing success as a financial centre is based on various factors, including economic and political stability, the independence it enjoys, an easily accessible justice system and an independent regulatory regime. Its low tax status, proximity to the financial markets of Europe and sophisticated financial industry infrastructure also contribute to its success. Guernsey is also ideally suited geographically being within the European time zone and conveniently placed between the US and Asian time zones. It is serviced by regular flights to and from Gatwick Airport and other major UK airports and enjoys reliable high quality communication links.
Guernsey Companies Law
The principal Corporate Legislation is the Guernsey Companies Law, 2008. Under this legislation it is possible to incorporate only private or public companies. Depending on taxation status, all companies are divided into resident and non-resident (exempt) companies. The type of company used for international trade and investment is the Exempt Company. Companies which are incorporated in Guernsey but which are owned by non-residents of Guernsey and do not do business with Guernsey-resident individuals or corporations, can be granted exempt status in Guernsey. A Guernsey Company has all the powers of a natural person. The language of legislation and Corporate documentation is English. There are no specific statutory provisions governing secrecy in relation to companies, but English Law, which applies to the jurisdiction, imposes a common law duty on professionals to keep the affairs of their clients confidential.
Types of Guernsey Companies
A Guernsey company may be incorporated as a non-cellular company or a cell company. A cell company may be either a protected cell company (which may create one or more cells for the purpose of segregating and protecting cellular and core assets but which do not have their own separate legal personality) or an incorporated cell company (which may create its own incorporated cells for the purpose of segregating and protecting the assets of each incorporated cell and the incorporated cell company and which have their own separate legal personality). Cell companies require the consent of the Guernsey Financial Services Commission prior to incorporation. An incorporated cell of an incorporated cell company cannot be incorporated without a special resolution (i.e. a resolution passed by a 75% majority of those members entitled to vote on the resolution) of the incorporated cell company. A Guernsey company may be incorporated with the liability of all or some of its members being:
limited by shares – to the amount, if any, unpaid on the shares held by them limited by guarantee – to the amount which the member undertakes to contribute to the assets of the company in the event the company is wound up while he is a member or within a period of one year after he ceases to be a member unlimited – unlimited liability for the company's debts while they are members and for a period of one year after they cease to be members mixed – a combination of the above
The Companies Law provides mechanisms for converting companies formed as one type of company into another type of company.
There are compulsory components required as part of a company's name which vary according to the type of company or the liability of the company. For example, protected cell companies are required to have "Protected Cell Company"', "PCC" or such other expression as may be approved in writing by the Guernsey Financial Services Commission in their name and a company limited by shares is required to have "Limited", "With limited liability", "Ltd.", "Avec responsabilité limitée", or "ARL" at the end of its name. There are exemptions from these requirements in limited circumstances. Certain company names are prohibited. The chosen name must not have words in its name which refer to a company of a different type or liability (for example, a protected cell company may not have "ICC" in its name), a name which is the same as a name currently appearing on the Register of Companies ("Register") or that has been reserved with the Registrar or which is likely to be confused with some other person already established in Guernsey or a registered trade mark, or a name which gives a misleading indication of the company's activity. Nor can it have a name which would constitute a criminal offence or would be contrary to public policy or accepted principles of morality.
Guernsey companies no longer have an authorised share capital. In the case of companies with only one class of share, the directors may exercise any power of the company to issue shares of that class or grant rights to subscribe, except to the extent that they are prohibited from doing so by the company's memorandum, articles or by an ordinary resolution (i.e. a resolution passed by a 50% majority of those shareholders entitled to vote on the resolution). In the case of companies with more than one share class, a particular issue of shares needs to be authorised, either by an authorisation in the company's memorandum, articles or by an ordinary resolution. The authorisation may be given for a particular issue of shares or rights or generally, and may be conditional or unconditional. The authorisation must state the maximum amount of shares that may be issued under it, and the date upon which the authorisation will expire. The expiry date must not be more than five years after the date when the authorisation is given. The authorisation may be renewed or revoked by a further ordinary resolution. Such renewal may only be for a further five years. An issue in breach of this authorisation requirement will be valid but a director who permits or purports to authorise a contravention of the authorisation requirement will be guilty of an offence.
A Guernsey company must at all times have a registered office in Guernsey. An incorporated cell shall have the same registered office as its incorporated cell company.
Guernsey companies must have at least one director. There is no requirement under the Companies Law for a director to be resident in Guernsey. A register of directors which is open to inspection by the shareholders must be maintained at the registered office. Directors can be individuals or corporate directors.
A Company Secretary is required who can be a natural person or body corporate, can be of any nationality and need not be resident in Guernsey
The minimum number of shareholders is two. Corporate shareholders are permitted. Details on the beneficial owner of the company must be forwarded to the Guernsey authorities, but secrecy provisions protect this information. A share register must be maintained at the registered office address of the company.
Details of shareholders and directors are maintained on the public files at the Companies Registry, but anonymity can be preserved by the use of nominee shareholders or third party directors.
The annual return gives details of the current directors and shareholders and any change in the shareholders since the last return. The return must be filed at the public registry in January of each year, and a filing fee of GBP 100 is payable. If a company fails to file its annual return on the due date, it must pay a penalty
Every Guernsey company must keep accounting records for each financial year which are sufficient to show and explain its transactions and are such as to (i) disclose with reasonable accuracy, at any time, the financial position of the company; and (ii) enable the directors to ensure that any accounts are prepared properly.
Every Guernsey company must have its accounts audited by a qualified auditor unless it is exempt under the provisions of the Companies Law or if the members of the company have passed a waiver resolution (i.e. a resolution passed by a 90% majority of those members entitled to vote and voting on the resolution) waiving the requirement for the company to be audited for a particular year. It should be noted that such waiver only has effect in respect of a company's obligations under the Companies Law and does not affect any other obligations of a company to have its accounts audited (for example any regulatory obligations it may have). Regulations have been made preventing certain companies from adopting the audit exemption.
In general, a Guernsey incorporated company is subject to Guernsey income tax at the rate of 0% unless it is involved in banking activities or is a resident utility company. Guernsey exempt companies pay no taxes in Guernsey, but are subject to a flat rate corporate duty of GBP 600 per annum irrespective of profit.
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