The ongoing country-by-country assessment and global scrutiny of standards of transparency and financial regulation by the OECD and FATF, has brought a welcome improvement in global standards but at the same time, has highlighted deficiencies in some areas.
This can create compliance issues for existing arrangements and investor concern for structures operating from certain jurisdictions. On occasion, there is therefore, a need to relocate financial activities to a more compliant and stable jurisdiction.
Guernsey's Corporate Solution for Investment Funds
On 12 June 2020, the Guernsey Financial Services Commission (GFSC) introduced a fast-track licensing regime for investment managers of overseas (non-Guernsey) funds.
The fast-track solution allows overseas fund management companies to migrate to Guernsey and obtain the required investment business licence in just 10 business days. As an alternative, a newly incorporated Guernsey management company can also be established and licensed within 10 business days, under the same regime.
The fast track solution was developed in response to a significant number of enquiries from managers of overseas funds, wishing to establish funds in Guernsey, whether through the migration of existing overseas fund managers or the establishment of new funds requiring Guernsey fund managers.
- Reputation – Fund managers are attracted to Guernsey due to its strong legal, technical, and professional services infrastructure, with a wide choice of quality lawyers, fund administration firms and locally based directors. In addition, Guernsey is in the EU, and is FATF and OECD "white listed" for tax transparency and fair taxation standards.
- International Compliance – Guernsey has introduced legislation to meet EU requirements on economic substance. This legislation requires fund managers to carry out their core income generating activities in their jurisdiction of tax residence. Guernsey's pre-existing financial services infrastructure and regulatory framework means that fund managers established on the island are able to meet the requirements on economic substance. Guernsey's robust yet balanced regulation of fund managers and its longstanding pedigree and reputation as a world leading jurisdiction in private equity are also key to Guernsey's popularity.
- Experience – Fund administrators and auditors in Guernsey have extensive experience in working with overseas non-Guernsey funds. Non-Guernsey schemes, for which some aspect of management, administration or custody is carried out in Guernsey, represented a net asset value of £37.7 billion at the end of 2020, and is a growth area.
- Other fast-track solutions – The fast-track option for managers of overseas funds is in addition to the existing fast track licensing processes available for Guernsey managers of Guernsey funds (also 10 business days). There is also a fast-track option for registering Guernsey funds within 3 business days for registered funds, and 1 business day for private investment funds (PIFs) and the PIF Manager.
Dixcart Fund Administrators (Guernsey) Limited works closely with Guernsey legal counsel, to facilitate migrations and provide high quality on-going support and administration services to ensure compliance with regulatory requirements, economic substance, and best practice.
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.