Martin Priest of St Peters Trust Company Limited
Guernsey and Ekaterina Shalupova of St Peters (International)
Limited, London and Moscow, look at how Guernsey has become an
attractive alternative for Russian clients.
Guernsey has evolved into an international financial centre over
the past 50 plus years. During this period the many thousands of
professionals providing diverse advice and services have gained
extensive experience in their field.
There are many reasons for Guernsey having become and continuing
to be a successful international financial centre which
Political stability - Guernsey has
experienced over 800 years of independence, having pledged
allegiance to the English Crown but not the English Government, in
1204. It is not a member of the European Union, although it has
been granted a special status whereby it is included for the
purposes of freedom of movement of goods.
Guernsey is internationally
recognised as one of the best regulated financial centres in the
world. As well as regulating banks, insurance service providers,
fund managers, it is one of the few jurisdictions which not only
regulates but licenses trust and corporate service providers.
The basic rate of personal taxation
has remained at 20% since the 1950s with no capital gains tax,
inheritance tax, gift or wealth taxes being imposed.
It is clear that proper and effective
management and control (using the Island's extensive pool of
expertise) can be exercised there without adverse implications, the
standard rate of corporate taxation being 0%.
It has up to date and innovative
legislation with regard to trusts, foundations and companies. The
latter includes a provision to establish protected and incorporated
cell companies as well as those with both guarantee and shareholder
It has extremely good communications
links into London, where much international business is
It is financially stable with no
significant government borrowing or locally established banks,
which the Island would be required to support in the event of
In this world of increasing uncertainty, political instability
and financial strains elsewhere, Guernsey is in an enviable
position. As a result it has to be seen as an ideal location in
which to establish and administer, trusts, companies and
foundations by individuals who wish to ensure that assets are
protected and managed in a professional and discreet manner.
Traditionally, Russian clients have used jurisdictions such as
Cyprus and the British Virgin Islands, the former benefitting from
a double taxation treaty with Russia. Effective structuring used to
be relatively simple.
However, the advent of Russian Controlled Foreign Company
legislation and the likelihood of the Common Reporting Standard
being introduced within the next few years, together with political
instability, international sanctions and conflicts means that many
Russians are looking for more sophisticated structures in order to
protect assets for themselves and future generations.
Guernsey is ideally suited, for the reasons set out above, to be
able to assist such individuals, using the expertise of its many
trustees, corporate service providers, asset managers, bankers,
insurers, etc, who provide a full range of services that can be
effectively coordinated from Guernsey, as well as evidencing that
proper and effective management and control in a tax neutral
Guernsey's positon contrasts with a number of other
jurisdictions that have been under attack and/or have had financial
and political stability issues over recent years. There is no
reason why Guernsey's position as a top quality, stable, well
regulated, international financial services centre should not
An original version of this article was published
Bulletin, December 2015.
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