Guernsey has a strong offering for Shari'ah funds and
Islamic finance structures:
Our service providers (administrators, custodians, lawyers, tax
advisers and accountants) have experience and
expertise of working with promoters and Shari'ah
advisers to create bespoke funds which comply with the fundamental
principles of Islamic finance.
We recognise that funds need to be established taking into
account the branch of Islam/geographical location of investors. Our
service providers also appreciate the importance of maintaining the
Shari'ah-compliant status of the funds and therefore have put
in place systems and training to ensure that
Shari'ah funds can be properly serviced.
Guernsey law. Although Shari'ah law is not
enforced in Guernsey, many aspects of it are able to sit alongside
Guernsey law. Guernsey law is versatile and Guernsey lawyers are
well-equipped to incorporate Islamic structuring and investment
techniques into more conventional contractual arrangements.
Guernsey courts will recognise and give effect to the parties'
intentions as reflected in the contracts and other documents
drafted specifically to comply with Shari'ah principles.
Guernsey also has a new Company law which introduced a number of
changes to make Guernsey companies more attractive for investment
funds, for example a more flexible distribution regime and simpler
capital maintenance rules.
Availability of structures which are
well-suited to Shari'ah funds, for example, companies and cell
companies, limited partnerships and unit trusts. All these
structures are capable of being established and operated within a
modern legislative framework whilst maintaining flexibility in
areas which need to be customised to comply with Shari'ah
Protected Cell Company (PCC). The PCC has
gained wide recognition in its use for multi-class funds. This is
because of its unique legal structure in having separate and
distinct cells within the same legal entity. A PCC may be useful
for structuring a Shari'ah fund with different sub-funds
employing different techniques for investment. The PCC is also
adaptable and flexible by allowing arrangements to be made between
cells even though all the cells are part of the same legal entity.
The fact that Guernsey pioneered this vehicle and has such
extensive experience and expertise in operating it is particularly
Robust yet pragmatic regulation is conducted
by the Guernsey Financial Services Commission (GFSC). This approach
allows flexibility to get business done while at the same time
providing reassurance for clients and their advisers who value
doing business in a well regulated jurisdiction. Indeed, we are
seeing a 'flight to quality' in these turbulent times and
so Guernsey's hallmark of quality regulation is proving
Corporate Governance. Guernsey has a
reputation for strong corporate governance standards and has a pool
of experienced and well-qualified non-executive directors.
'Fast-track' fund regimes –
Qualifying Investor Funds (QIFs) and Registered funds. Guernsey has
recently further streamlined its funds' approval process by
adding to the authorised classification (including QIFs) with the
'lighter touch' Registered regime. This gives promoters
greater choice on the level of Guernsey regulation required for
their fund, with potential for savings in cost and time in getting
their funds launched in Guernsey.
Opportunities for listing on the
internationally recognised Channel Islands Stock Exchange (CISX).
To date, the CISX has listed the securities of a Sukuk issuing
vehicle established as a PCC. In addition, the exchange has
approved a Sukuk issuing programme of a Shari'ah compliant PCC
A modern Guernsey Company Registry complements
the package that service providers offer in terms of speed and
efficiency in company incorporation and online accessibility.
Location. Guernsey has earned a reputation for
innovation and quality of service during its five decades as a
funds jurisdiction. In addition, Guernsey companies have over the
years played a part in a number of Shari'ah-compliant non-fund
financing structures and will therefore be familiar to many
promoters and advisers.
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