Guernsey: Guernsey - On The Front Foot

Last Updated: 29 October 2008
Article by Peter Niven

Most Read Contributor in Guernsey, September 2018

Originally published in Global Assets Online, September 2008

Writing for Global Assets in the middle of last year I commented how Guernsey's finance industry was booming. Since then, there have been major changes in the world economy, most notably the sub-prime crisis and its fallout.

However, while activity is now not as frenetic as pre-credit crunch, business flows do remain robust. 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 on the front foot 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 on-going 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 Guernsey 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 on the front foot 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
Related Topics
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