Guernsey: What Guernsey Can Offer Chinese HNWIs'

Last Updated: 8 September 2015
Article by Wendy Weng

Most Read Contributor in Guernsey, November 2017

In September 2014, the Hurun Research Institute published its annual listing of the richest people in China. It showed that IT tycoon Ma Yun had increased his personal fortune during the last year by 500% to $25 billion and in doing so, had climbed to first position on the list. He had surpassed last year's number one, Wang Jianlin, despite the latter's wealth also growing in the last 12 months.

What the survey highlights in greater detail is how real estate continues to be a big driver of wealth in China, with eight of the top 20 linked to that industry, but more broadly how the growth in the number of high net worth individuals (HNWIs) in China continues to gather pace, with the number of dollar billionaires is up by 39 in the last year to 354, whereas a decade ago there were only three such people.

This rise in the number of HNWIs is consequently driving up demand for private wealth services. For example, a number of Chinese based trust companies are now selling the local family trust product to clients in mainland China. However, concerns have been raised that such wealth could be subject to Inheritance Tax if, as expected, this is introduced in China in the next few years. This is unlikely to be the case though with any assets established in an offshore trust.

Guernsey is an offshore jurisdiction which has significant experience and expertise in establishing trust structures for clients from around the world, including China. They are not subject to any Inheritance Tax and they can also be established for an indefinite period of time, as opposed to the current 50 year limit of the family trust. It is understood that the Chinese trust law will be reviewed later this year and that leaves open the possibility that the 50 year limit may be revoked but nevertheless, there remain compelling reasons why Chinese HNWIs should consider a Guernsey offshore trust instead.

What can Guernsey offer Chinese HNWIs?

Guernsey's wealth management sector is made up of 150 lead corporate licensees, ranging from local, boutique providers to large, multinational organisations. There is extensive experience and expertise in using legally robust and tax efficient structures to manage the wealth and assets of clients, for example for asset protection, investment purposes, tax planning and estate planning. This may be provided through a variety of means, including private banks, trusts, companies, foundations or via partnership family office structures.

Trusts & Companies

The trust concept originates from and has been used successfully for many hundreds of years in common law countries such as the United Kingdom (UK) and the United States (US). It is less familiar in civil law jurisdictions such as China and as such, for many clients, the idea of handing over control of wealth and assets to complete strangers – albeit professionals – who may be half way across the world is an uncomfortable prospect.

Guernsey can address these concerns. Firstly, Guernsey has well-established legislation and supporting legal infrastructure including courts which have many decades of experience in dealing with court matters. Secondly, within the arrangements of a standard Guernsey trust there are special provisions which allow for the Settlor to take control of the wealth or assets. Thirdly, the use of a structure involving a Private Trust Company (PTC) and a purpose trust gives the Settlor greater control – they may sit on the board of the PTC and also be involved 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 controlling the wealth or assets, 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.


We are aware that some advisers and clients still believe that a trust is not the right option for them. Therefore, we have introduced the Guernsey Foundation. It came on-stream at the start of 2013 and we believe that it will be especially attractive to clients from civil law jurisdictions, such as China. In particular, the Guernsey Foundation can be used as an alternative to the PTC and purpose trust arrangements that have traditionally been used to allow Settlors to retain control over assets and wealth.

The early foundation registrations in Guernsey have predominantly been set up for philanthropic purposes. We anticipate that this type of foundation will continue to prove popular going forward and that the Island will also see structures set up for more traditional private wealth management, estate planning purposes and other family arrangements.

Family Offices

With the Family Office increasingly investing through global markets, including in private equity and other alternative asset classes, Limited Partnership Family Office structures can also be utilised. Guernsey has a thriving investment fund and private equity industry with structures that are legally robust and tax efficient. Corporate and limited partnership structures are utilised to hold assets and investments of all types. Guernsey investment platforms manage investments across the globe. Therefore, there is the option to invest in existing Guernsey platforms as well as the option to establish a new or bespoke investment platform for larger Family Offices.


Guernsey pioneered the Protected Cell Company (PCC) concept and also offers Incorporated Cell Companies (ICCs). They offer the advantage of allowing for legal segregation between assets and liabilities as well as the ability to create cells that are bespoke to individual family members or asset classes (i.e. cells are akin to holding companies).

Guernsey has established 2-REG, the Channel Islands Aircraft Registry, for both local residents and the wealth management sector's clients from overseas. This complements the Guernsey Registry which offers quick and cost-effective company incorporations. Its offering is set to be enhanced by a number of revisions due to be made to the Guernsey Company Law, including provision for companies to be named using any recognised alphabet, including Chinese characters.

The Guernsey Registry is also home to the local Intellectual Property Office, which has launched the world's first image rights legislation and image rights register. Placing image rights on a statutory footing provides individual or corporate brands with a commodity which can be both protected and exploited commercially.

The aim is that this unique offering will be particularly popular with famous individuals, such as sport and entertainment stars, who will then utilise the wider wealth management services available in the Island.

Guernsey: In Brief

  • Situated in Europe between the United Kingdom (UK) and France.
  • A British Crown Dependency.
  • Special relationship with the European Union (EU).
  • Population of 60,000 people.
  • English speaking.
  • Currency: British pound Sterling (GBP).
  • Same time zone as the UK.
  • Links to both London and Europe.


Clients can also make use of Guernsey's mature banking sector. It provides products ranging from retail banking and savings through international wealth management and private banking to institutional business and specialist lending. Importantly, it also services the other financial services sectors on the Island.

Guernsey plays host to 31 licensed banks, holding US$140 billion in deposits. These banks include the international operations of major groups headquartered in the UK, US and Switzerland. However, we believe that there is also significant scope for one or more Chinese banking groups to establish an offshore operation in Guernsey.

Why Guernsey?

Guernsey is not the only offshore jurisdiction which claims to be well-placed to offer wealth management services to Chinese individuals and families. Indeed, it is our experience that many from China use Caribbean jurisdictions, such the British Virgin Islands (BVI) and Cayman Islands. However, we believe that this is largely down to familiarity and in fact, Guernsey offers not just something different but also, we believe, a better proposition. One of Guernsey's greatest strengths is that it has a 50 year heritage in providing offshore wealth management services. This means that the Island has significant experience and expertise in administering not just the basic but also the most complex of structuring arrangements. It has also helped develop an infrastructure whereby Guernsey is able to provide Chinese clients with a full range of offshore wealth management services, ranging from the traditional to the especially innovative.

Such innovation has been fostered through the approach of the local authorities, including the Guernsey Financial Services Commission (GFSC), which has encouraged creativity while ensuring that the Island is working to leading international standards. Indeed, an IMF report from early 2011 showed that Guernsey was compliant or largely compliant with 47 of the 49 standards set by the Financial Action Task Force (FATF) – the best assessment of any jurisdiction globally.

The Guernsey Government also continues to ensure we adopt leading international standards of tax transparency and exchange of information. Guernsey was within the first wave of territories placed on the Organisation of Economic Cooperation and Development (OECD) 'white list' at the conclusion of the G20 summit in London, April 2009. Today, Guernsey has signed Tax Information Exchange Agreements (TIEAs) with more than nearly 60 jurisdictions, including China.

Guernsey has also signed Double Tax Arrangements (DTAs) with several jurisdictions, including Hong Kong and Singapore, and today the total stands at 25. While Guernsey does not have a Double Taxation Agreement (DTA) with China, we do have a corporate tax regime where all financial products are either taxed at 0% or are tax exempt in Guernsey.

Guernsey's finance industry: An overview

  • Banking.
  • Wealth management.
  • Investment funds.
  • Insurance.
  • Professional support services e.g. multi-jurisdictional law firms and global accountancy firms.
  • The local Channel Islands Securities Exchange (CISE).
  • A Guernsey company registry and intellectual property registry.
  • Supervision and regulation from the Guernsey Financial Services Commission (GFSC).

Guernsey relations with China

  • Guernsey opened an office in Shanghai at the end of 2007.
  • The Guernsey Government has signed a TIEA with XIAO Jie, Commissioner of the State Administration of Taxation for the Chinese Government.
  • The Guernsey Government has signed a Memorandum of Understanding (MoU) for exchange and cooperation with FAN Yongjin, Deputy Director General of the Shanghai Municipal Financial Services Office.
  • Guernsey's Chief Minister has both visited and hosted TU Guangshao, Vice-Mayor of Shanghai; Dr FANG Xinghai, Director General of the Shanghai Municipal Financial Services Office; and Madam FU Ying, formerly Chinese Ambassador to the UK and now Chair of the Foreign Affairs Committee of the National People's Congress.
  • Guernsey has developed a special relationship with Madam FU Ying's home town of Hohhot in Inner Mongolia, including a student exchange programme, presentations on matters of mutual interest related to dairy farming and initial discussions related to offshore financial services.
  • Guernsey has received approval for companies incorporated in the Island to be listed on the Hong Kong Stock Exchange (HKEx) and we have developed strong ties with the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE).
  • The Guernsey Financial Services Commission (GFSC) has signed a Statement of Cooperation with the China Banking Regulatory Commission (CBRC) and a Memorandum of Understanding (MoU) with the China Securities Regulatory Commission (CSRC).
  • LIU Xiaoming, the Chinese Ambassador to London, UK, visited Guernsey in April 2013 – following a Guernsey delegation meeting him in London in October 2012 – and a number of initiatives are now being jointly pursued.

In addition, it is our understanding that while the initial, upfront costs of doing business in Caribbean jurisdictions may be less than when using Guernsey, in fact, over the longer term, the expense is likely to be broadly comparable. Yet, clients also have the security of using a jurisdiction which is not just within the very top tier for standards of corporate governance, regulation and tax transparency but also politically stable and economically secure.

Another major advantage that Guernsey has over Caribbean jurisdictions is that it is located in between the UK and Europe. This means that it offers quick and easy access to both London and European markets and being in the same time zone as the UK enables business to be conducted with both Asia and the Americas in the same day. The Island is also situated in an area free from natural disasters and with a temperate climate so that business continuity is ensured.

It is these factors which mean that Guernsey consistently outperforms the BVI and Cayman in rankings of global IFCs. However, where we are really able to distinguish ourselves from other jurisdictions is through our efforts to build and develop relationships in China.

Guernsey as a finance centre: Quick facts

  • OECD/G20 'whitelist'.
  • IMF endorsed – No.1 under FATF standards.
  • No. 3 specialist finance centre (The Banker, October 2014).
  • 31 licensed banks with US$140 billion worth of deposits.
  • Some 50 firms providing investment funds services of US$450 billion.
  • 150 fiduciaries employing more than 2,000 people.
  • The No. 1 captive insurance domicile in Europe; fourth in the world.

Guernsey and China

Guernsey has taken a number of steps to show our commitment to the Chinese market, raise our profile and put the right building blocks in place to facilitate business flows (see box 4).

As we have invested time and resources in building these strong relationships so a number of Guernsey-based firms have developed their own presence in the region. Law firm Ogier has offices in Hong Kong and Shanghai and Mourant Ozannes is now established in Hong Kong.

Wealth managers Louvre, Nerine and Newhaven have established offices in Hong Kong and Richmond Fiduciary Group has opened an office in Shanghai. Richmond is an independent Guernsey wealth management firm with a core business of providing traditional trust and corporate services to clients around the globe.

Perhaps not surprisingly, given the number of Guernsey based firms establishing a presence in either mainland China or Hong Kong, figures from the GFSC show that wealthy Chinese individuals and families are becoming an increasingly important market for Guernsey's wealth management community.

Dominic Wheatley, Chief Executive of Guernsey Finance, said: "Chinese clients and their advisers have traditionally chosen to use offshore wealth management services provided from Caribbean jurisdictions. However, Guernsey provides a different proposition and one which has many advantages compared to our Caribbean counterparts. Chinese clients and their advisers need to make a choice between an option which has worked in the past and one which will work in the future. We can see that more are now choosing the latter, they are choosing Guernsey and therefore they are more in tune with the future direction of the global financial services industry."

Guernsey opened a representative office in Shanghai in 2007 and it is available as a first port of call for clients or their advisers who want to join the growing numbers who want to know more about offshore wealth management services from Guernsey.

Originally published in Protecting Wealth: A Jurisdictional Guide - China edition, August 2015.

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
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 you may opt out by clicking here

    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.

    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.

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