Guernsey: Guernsey - In Pole Position

Last Updated: 8 September 2008
Most Read Contributor in Guernsey, September 2016

Originally published on EU Bankers – September 2008

Writing for EU Bankers at the end of last year I commented how Guernsey's finance industry was continuing its strong performance despite the changed global economic scene with the sub-prime crisis and its fallout. I was confident that the Island was well placed to continue in such a vain, although only time would tell.

Nine months later and performance remains robust despite the difficult market conditions created by the credit crunch. What I hear is that there are still other substantial flows out there but at the moment there is a lack of confidence within the wider markets to put this business into place.

In some ways this is beneficial because it gives us an opportunity to further enhance our offering and step up our promotion of the industry, both of which are helping sustain our performance during difficult market conditions while also putting us in pole position for when confidence returns and business levels increase.


A reflection of this situation is that deposits within the 50 Guernsey banks decreased in value by £1.4bn (1.1%) during the second quarter of the year. This was primarily because Swiss fiduciary deposits fell by 3.9% in the period as a result of a block of such business being transferred out of the jurisdiction to another part of the group.

What is encouraging is that other deposits, mainly in Sterling and Euro, continue to move upwards. This shows there is awareness that the banks and building societies in the Island provide very good products and services. Indeed, year on year deposits have increased by £20bn (18.5%) to reach a total of £128bn at the end of June 2008. Of course, these banking figures reflect not just the business coming in directly from outside Guernsey but also the sustained flows from the other sectors of the Island's financial services industry – fiduciary, investment management, funds and insurance.


The Island's international insurance industry has seen continued growth during 2007 and into 2008 despite our maturity, increased competition and difficult market conditions. As part of this, Guernsey has become home to Gold Coast City Council Insurance Company Limited – the world's first local authority captive.

Figures from the Guernsey Financial Services Commission (GFSC) show the number of international insurance entities now stands at more than 700, with 365 international insurers and 350 insurance cells. Guernsey retains its place as the number one captive insurance domicile in Europe and number five in the world.

Guernsey pioneered the Protected Cell Company (PCC) in 1997 and has since also introduced the innovative Incorporated Cell Company (ICC). There are now more than 70 PCCs established in the Island and last year saw the jurisdiction's first insurance-writing incorporated cells come on-stream. We continue to highlight, especially through the British Insurance Brokers' Association (BIBA), how the structure enhances the viability of self-insurance for small to medium sized enterprises (SMEs).

Work has also begun to promote Guernsey as a potential domicile for reinsurance operations. This has coincided with Barbican Reinsurance Company Limited becoming the first major commercial reinsurer in the Island. It is now planned to host a Guernsey reinsurance seminar in London at the Andaz Hotel (formerly Great Eastern Hotel) near the Lloyds buildings on Tuesday 11 November. This is the day before the main promotional event of the year for our insurance industry – the Guernsey Insurance Forum (GIF), which is being held at the Queen Elizabeth II Conference Centre, Westminster, London.

One of our key brand messages in all of this activity is that the Island boasts mature insurance law yet always ensures that it is enhanced to meet the evolving needs of the marketplace. This year we have completed a thorough review and made several changes to maintain our tradition of having modern insurance legislation.


The performance of our funds industry continues to be impressive given the challenging market conditions. The value of funds under management and administration reached a record £207bn at the end of June 2008 – up 1.7% over the quarter and 33% year on year. Traditional funds remain well represented among these flows. However, the major growth continues to be in alternatives such as private equity, property and funds of hedge funds, as well as more esoteric asset classes.

During the last year we have seen the addition of BNP Paribas, Capita and Citco to the significant list of administrators in Guernsey, which already included globally recognised names such as Northern Trust and State Street. In addition, the Channel Islands Stock Exchange (CISX) has seen continued growth and now has more than 2,800 security listings.

The Island's funds industry has been buoyed by the successful introduction of Qualifying Investor Funds (QIFs) – a self-certification regime for experienced investors – and the more recent launch of a 'fast track' registered funds regime. There are also plans to develop a specific regime to attract more hedge funds.

This work is being complemented by the promotion of the industry. This year we have exhibited at conferences in Munich, Cannes, Monaco and Barcelona, as well as hosting our own private equity masterclass in the City of London. On Tuesday 7 October we will be hosting the Guernsey Funds Forum in London and the day afterwards a private equity masterclass in Edinburgh. We are also starting to refine our plans for targeting the Zurich/Geneva, US and Middle East markets in 2009.

Investment Management

The number of fund managers based on the Island continues to expand and now includes recent arrivals Terra Firma and Odey Wealth. Guernsey not only provides the right environment for these investment management and stockbroking firms to establish operations but also for them to fill niches in the market through innovative and pioneering products. Indeed, the Island plays host to award winning managers: Sigma Asset Management Guernsey received a leading industry award for the 12-month risk/return performance of one of its fund of hedge funds; and Dawnay Day Milroy (now Corazon Capital) was named 'Best Retail Product Provider' at the Hedge Funds World Awards Middle East 2008.

Fiduciary Services

Guernsey plays host to some 140 licensed fiduciaries, ranging from large organisations to independent, boutique operations, holding between £250bn and £300bn worth of assets in trust. In March we saw a new Trust Law come on-stream. Some of the most significant changes included the introduction of Purpose Trusts, the removal of limits on the length of a trust's duration – allowing perpetual trusts – and the abolition of the personal liability of directors, particularly as a way to encourage greater use of Private Trust Companies (PTCs). These changes were the focus of a Guernsey fiduciary masterclass in London during the summer and where the Island restated its commitment to introduce Foundations.

Further Development And Promotion

In addition to the sector specific development and promotional work there is also ongoing industry-wide activity.

On 1 January this year Guernsey moved to a zero rate of corporate tax as standard. There is still no withholding tax on dividends paid, no capital gains tax, no inheritance tax and no value added or general sales tax, and personal income tax remains levied at a maximum of 20%.

On 1 July this year a new Guernsey Companies Law was introduced in parallel with a new Guernsey Company Registry. This saw the Island's system for company formation and administration move from a court-based model to a streamlined statutory process. The registry is utilising cutting edge online technology to provide users with incorporations in 15 minutes and prices starting from £100 whilst maintaining the Island's hallmarks of personalised service.

We are though not resting on our laurels. During this year we have been hosting regular discussion forums with professionals from London to help better understand their client requirements from international finance centres such as Guernsey. The results of these discussions will form the basis of proposals for the further development of our finance industry.

Work is also ongoing to develop our brand in the emerging markets and particularly China. In March this year a delegation of senior government officials and business leaders from the Island met with their counterparts in Shanghai and in the process opened a Guernsey office in the city which is staffed by Chinese national Wendy Weng. In June I was able to develop our presence in Beijing and further raise our growing profile in Shanghai by visiting the cities as part of the Lord Mayor of the City of London's delegation to the region. In October we have delegation to Hong Kong and Shanghai when we will be promoting the Island's expertise in fiduciary expertise as lead sponsor and exhibitor at STEP Asia, through a specific educational seminar in both locations and a series of meetings with key decision makers in the two centres. Discussions with Chinese government and regulatory officials are also planned and will be led by Guernsey's most senior politician, Chief Minister Lyndon Trott.

The Right Conclusion

It is this marketing and promotional activity alongside the continued development of attractive products and pragmatic regulation that is helping sustain new flows into the Island during the difficult market conditions while also putting us in pole position for when confidence returns and business levels increase.

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
Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.