Guernsey: Guernsey Innovates For Middle Eastern Wealth

Last Updated: 4 December 2014
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, November 2018

Fiona Le Poidevin, Chief Executive of Guernsey Finance, looks at what sets Guernsey apart from others as a premier location for private wealth.

Innovation has been at the heart of Guernsey's financial services offering for decades. The launch of 2-REG, the Channel Islands Aircraft Registry, at the end of last year further added to the Island's track record in this regard and provided yet another differentiator for Guernsey over many other offshore wealth management centres. Indeed one of the early registrations was an Embraer Legacy 600 corporate jet, which is based in the Middle East/Gulf region and flies on behalf of the owner between the Middle East, US and Africa.

Likewise, Guernsey remains the only jurisdiction in the world to offer its own image rights legislation and image rights register after introducing its own law in late 2012.

The introduction of both 2-REG and the Guernsey image rights register enables the Island to continue to meet the varied and ever-changing needs of international clients, who have an increasing desire to place their wider wealth management arrangements in a reputable and reliable domicile where quality service provision is at the fore. The platform to be in this position comes through the significant experience Guernsey has built up over more than 50 years as an International Finance Centre (IFC) servicing structures, such as companies, partnerships and trusts, formed for the protection of assets.

Fiduciary excellence

Many of the Island's 150 licensed fiduciaries already have Middle Eastern clients who have established structures, including trusts. The trust concept is rooted in common law and most popular in the US and UK, but some clients based in other parts of the world, including the Middle East, are less familiar with it and sometimes unsure about the prospect of losing control of assets which are held by trustees – albeit professional service professionals – on behalf of the beneficiaries.

Many are more familiar with a foundation, a civil law structure and an alternative to the trust. With this in mind, another development for Guernsey's private wealth sector saw it introduce its own foundations law at the beginning of 2013, thus giving service providers with an additional tool on the menu of options available for best meeting client needs.


The foundation has been available in other jurisdictions for some time, but the Guernsey model is quite different. It was tailored to meet the needs of international private client advisers and their clients and as a result contains a number of advantages. A foundation is more like a company in that it is an incorporated entity with a separate legal personality where assets are owned by the structure. Having said that, a foundation differs from a company in that it does not have shareholders to whom the board are accountable but instead it holds assets (in its own name) on behalf of the beneficiaries, for particular purposes, or both. Council members act in good faith and cannot, without express authorisation, profit from their position.

A particular innovation of the Guernsey foundation is the ability for beneficiaries to be classed as either being 'enfranchised' or 'disenfranchised'. Enfranchised beneficiaries will have rights to certain information regarding the foundation, whereas disenfranchised beneficiaries are not entitled to any at all.

Guernsey has also taken note of the fact that some clients may worry about confidentiality because as foundations are registered entities, they are, unlike trusts, publicly visible. In Guernsey, only very limited details are available to the public whereas in some other jurisdictions the whole charter is commonly visible. Yet, Guernsey's approach means the limited visibility offers the benefit of easily proving the foundation's existence.

The early foundation registrations in Guernsey were for philanthropic purposes but we are also now seeing structures set up for more traditional private wealth management, estate planning purposes and other family arrangements.


The emergence of the Guernsey foundation does not mean the trust concept has become any less popular in Guernsey, but means clients and advisers now have a greater choice for what best suits their needs. Trusts differ from foundations and companies in that they are not incorporated entities and have no legal personality. Assets within a trust are owned by the trustees on behalf of the beneficiaries. However, within the arrangements of a standard Guernsey trust there are now special provisions which allow for the Settlor to have some oversight of the wealth or assets. By using a structure involving a Private Trust Company (PTC) or purpose trust, the Settlor can have greater control – they may sit on the board of the PTC and also be in command of the purpose trust which is the ultimate authority over the PTC board.

It should be stressed though that, aside from the tax implications, there are dangers in the Settlor having control, especially if they are not experienced or have particular expertise in managing such affairs. Indeed, trusts have been successfully used for many years in the UK and US precisely because the trustees have been independent financial professionals. Similarly, where dynastic planning is the goal, for the family wealth to successfully pass down through the generations, the client will have to give up control at some stage. The PTC structure allows for control to be handed over gradually with following generations brought in as and when most appropriate.

Middle East families

What we are now seeing in Guernsey when specifically dealing with clients from the Middle East is that they often require a more flexible structure for asset protection and succession planning than is available through a Shari'a compliant trust.

Guernsey's depth and breadth of experience means it is well placed to provide for this type of family office service. For example, trust structures for Middle Eastern families can span from strict Shari'a compliance through to fully flexible Shari'a compliance, where the patriarch wishes to entirely ring-fence assets outside of the Islamic world, with a view to departing from the application of Shari'a law for a proportion of his wealth. This is particularly brought into play to rebalance the distribution of wealth between male and female heirs as modern families are just as likely to have daughters at schools abroad who will then return to the Middle East and play a key role in the family enterprise. In such cases, the patriarch may be keen to ensure his daughters are provided for in the same way as his sons, and this can be achieved by putting assets offshore outside of the Islamic world, Guernsey being one such suitable jurisdiction.

Section 14 of the Trusts (Guernsey) Law, 2007 provides a useful anti-forced heirship measure to protect assets held in Guernsey trusts from attacks by the Shari'a courts. Similarly, robust firewall provisions are also contained in Guernsey's foundations law.


The addition of a tailored foundations law to Guernsey's wider private wealth management offering is yet another example of what sets the Island apart from other IFCs. Similarly, the launch of 2-REG and the introduction of our world-first image rights legislation further demonstrates that Guernsey's hard-won reputation for creating an environment synonymous with innovation and high standards shows no sign of slowing down.

An original version of this article appeared in Wealth Arabia, November 2014.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions