Guernsey has for some time been the domicile of choice for
non-UK companies listing on the main market of the London Stock
Exchange ("LSE"), the Alternative Investment Market
("AIM") and the Specialist Funds Market
("SFM"). The Island has developed expertise in the set up
and administration of a range of entities from major corporations
to niche investment vehicles.
As at June 2015, there were 69 Guernsey companies listed on the
main market of the LSE (making Guernsey the most popular
jurisdiction after the UK for companies listed), 38 Guernsey
companies listed on AIM and 16 Guernsey companies listed on the
Specialist Funds Market.
Carey Olsen has acted on a significant proportion of these
listings and is ongoing adviser to many of the companies in
question. Carey Olsen advises more LSE listed clients than any
other offshore law firm and the second largest number of AIM
clients of any law firm, according to the Corporate Advisers
Rankings Guide (February 2015). The LSE's own review of the
first half of 2015, showed continuing strong performance for
Guernsey and for Carey Olsen, in particular, who advised on three
of the five largest IPO's on the 2015 list. This included
advising Apax Global Alpha Limited on its listing on the premium
segment of the main market of the LSE in a transaction that
involved the acquisition by the listed vehicle of more than
€600 million in existing investments and the raising of
€300 million in capital for new investments.
There are several key advantages of using a Guernsey company as
the vehicle for an LSE listing:
Guernsey is a well-positioned and
leading offshore financial centre
Guernsey provides top-tier financial services in a
well-regulated, robust and stable environment. The island has
high-quality service providers, including administrators,
registrars, auditors and legal advisors.
The Island is located in the same time zone as London and is
easily accessible from both the UK and the major European
Guernsey is a "white list"
Guernsey was within the first wave of jurisdictions placed on
the Organisation for Economic Co-operation and Development
("OECD") 'white list' in April 2009. In January
2011, IMF commended Guernsey's high standards of financial
regulation, supervision, stability and criminal justice
Guernsey is widely recognised as being a leading "tax
transparent" jurisdiction. In addition to having tax
information exchange agreements with 58 jurisdictions (and
counting), Guernsey has implemented US FATCA and CDOT FATCA
reporting and is an early adopter of the OECD's "common
reporting standard" for automatic exchange of financial
account information. Guernsey is also a participating jurisdiction
in the OECD Multilateral Convention on Mutual Administrative
Assistance in Tax Matters.
Flexible corporate law
Guernsey company law offers a number of different corporate
vehicles providing a flexible framework that enables capital
structures to be tailored to the specific needs of investors.
Furthermore, Guernsey company law omits aspects of company laws
from other jurisdictions that investors find problematic or
restrictive. For example, financial assistance is allowed (provided
that the company is solvent) and a company's ability to pay a
dividend or other distribution (which can be paid out of share
capital) is dependent on the company's solvency, rather than a
need to have sufficient distributable profits.
Ease of trading in shares
Shares in Guernsey companies can be traded in uncertificated
form through CREST without the need for depositary receipts
required for many non-UK shares in CREST.
No UK stamp tax charges on
Unlike UK equities, shares in Guernsey companies can be traded
through CREST without attracting UK stamp tax charges (as long as
the company's shares register is maintained outside the
Guernsey holding companies typically pay income tax at 0% and
are not subject to capital gains tax. Generally, collective
investment vehicles can also benefit from income tax exemption.
Guernsey does not levy withholding tax on dividends and other
distributions paid to companies or non-Guernsey resident persons
and does not levy withholding tax on interest. There is no Guernsey
stamp tax on share transfers/sales.
Subject to the UK Takeover Code
Guernsey companies listed in the UK are subject to the UK
Takeover Code, so that investors can be assured that they receive
the same level of protection that would have been afforded to them
if investing in a UK company listed in the UK.
Guernsey is not part of the EU
Guernsey companies are not directly subject to EU regulations
and generally only need to comply with those that apply by virtue
of the company's EU activities.
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.
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