Guernsey has been home to listed investment funds since 1953 when the fund now known as Threadneedle UK Select Trust Limited was admitted to trading on the London Stock Exchange.
Today Guernsey is the domicile of 70 investment funds which are listed on the London Stock Exchange which is more listed funds than all other jurisdictions excluding the UK added together. So far in 2014 five funds have been formed in Guernsey and listed on the London Stock Exchange.
Does tax avoidance push funds to Guernsey? No, it's true that Guernsey investment funds are exempt from taxation in Guernsey but then most investment funds in all jurisdictions are rightly tax exempt. This is morally defensible; collective investment schemes should not be taxed because the investors in these funds suffer tax on their income or gains.
So is a desire to avoid regulation pushing funds to Guernsey? No, Guernsey has adopted regulation equivalent to the Alternative Investment Fund Managers Directive and of course funds listed on the LSE have to comply with the Stock Exchange Rules wherever they are formed.
So why is Guernsey so popular for these structures? Well we speak English, use sterling and are in the same time zone as London with regular connections to UK airports.
Our sixty year track record with listed investment funds means that lawyers, auditors, company secretaries, regulators and fund administrators in Guernsey have unmatched expertise.
Furthermore Guernsey's innovative structures and processes like protected cell companies and the registered fund application process allow fund managers to launch investment funds efficiently and in Guernsey we do not penalise funds which invest in alternative assets like social infrastructure and clean technology.
In this niche area Guernsey contributes to the continuing dominance of the London Stock Exchange.
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