New businesses are popping up across the island of Guernsey as new government initiatives seek to attract talent from across Europe, the Americas, Asia and the Middle East. Andrew Niles, Director at Intertrust Guernsey, explains how this is working in practice.
Victor Hugo once said: "initiative is doing the right thing without being told".
Guernsey's success has been built upon its own reaction to the continuous changes and challenges in the global business environment. This is no different today than it was 200 years ago; we remain a facilitator of business.
Guernsey is highly attuned to global matters, ensuring it can continue to create innovative solutions to international challenges. The island's businesses invest significant resources into human capital, world-class systems to meet regulatory requirements and the diversification of product bases.
Corporate, funds and private clients face many global challenges and they look to their service providers for support in navigating these issues. Guernsey's industry and government have built proactive business development mechanisms that reach out across Europe, the Americas, Asia and the Middle East. These efforts are complemented by government agencies such as Guernsey Finance and Locate Guernsey.
In August 2016, Guernsey Finance launched the new "We are Guernsey" brand, which communicates the major features of the island as a finance centre (substance, excellence, quality, security, and innovation), and links them to Guernsey's own culture and community. As a significant contributor to Guernsey's economy, the finance industry is routed in our history and culture.
Locate Guernsey is a government-led inward investment initiative that was established in January 2016. Its role is to promote the island to those considering corporate or personal relocation. The creation of Locate Guernsey demonstrates the proactivity undertaken to promote the island as an attractive territory for businesses and individuals.
Guernsey continually produces new and innovative products and it is the role of industry and Guernsey Finance to promote these to various markets. Recently these have included Wealthify, a robotic investment adviser, MLP's and PIF's in the fund sector, ILS structures in the reinsurance space, and longevity risk structures in the UK pensions area.
Alongside our promotion of existing products, we also help sectors penetrate new markets. Currently, this includes captive insurance into China, QNUPs into South Africa, and buy-to-let mortgages into the Middle East. We also work with industry to re-develop products for the modern market place.
Capital markets are also well represented on the island. The Channel Islands Securities Exchange (CISE) offers a responsive and innovative listing facility for international companies to raise capital from investors based around the globe. There was growth in new business of more than 13 percent during the first half of 2016 and today there are more than 2,200 listed securities with a total market value in excess of £400 billion.
During the last year the CISE has seen continued growth in the number of London Stock Exchange (LSE) Main Market and AIM quoted companies issuing convertible debt, rather than equity, as a more convenient and cost effective method of attracting new capital. The Exchange has also seen a new pipeline of business in high yields bonds emerge following the EU's introduction of the Market Abuse Regulation (MAR). It has put in place a raft of obligations for securities traded on EU facilities that are disproportionately onerous on high yield bonds. As such, issuers who would have previously listed products on EU markets are now increasingly using the CISE where there are robust yet proportionate rules.
The States of Guernsey recognise the importance of providing a modern administrative framework for businesses and individuals. Guernsey's Information Gateway Online Reporter is currently the only AOEI portal to provide an Application Programming Interface (API) to Financial Institutions filing FATCA and CRS reports. In recent years the Income Tax Department has invested in automation, developing a user-friendly electronic tax filing portal. The government recognises that keeping pace with the digitisation of commercial activity is a key differentiator for the island and in 2015 the States of Guernsey launched the Digital Greenhouse, dedicated to supporting the development of Guernsey's digital and creative sectors.
Financial services businesses in Guernsey are overseen by the Guernsey Financial Services Commission (GFSC), which licences banking, insurance, investment and fiduciary businesses. The GFSC's risk based approach reflects the good practice set out by the Organisation for Economic Development and the Financial Action Task Force, and it co-operates closely with law enforcement agencies and with the Channel Islands Financial Ombudsman. It is proactive in ensuring that Guernsey's regulatory framework adapts with local and global trends. During 2015 and 2016 the GFSC launched consultations on the regulation of credit provision, pensions and alternative investments during 2015 and 2016. The innovations unit provides a point of contact for individuals and companies looking to operate new and innovative products or services on the island, helping applicants to navigate the regulatory framework.
Guernsey's business community and clients are well supported by excellent regulation, legal infrastructure and transparent systems. We offer companies a flexible robust platform on which to build their business.
Guernsey offers a fiscal regime that is positive for businesses and individuals, alongside an open property market – which represents a straightforward route into Guernsey - and a high quality of life.
Understanding that it must constantly invest in human resources, the island has developed a policy that provides both state and private education together with vocational training tailored to the financial industry. The government also recognises the need to enhance and diversify its workforce and is able to grant long-term work licences to international professionals coming to the island.
With an engaged and stable government that is devoid of party politics, Guernsey is ideally positioned, in both a strategic and geographic sense to offer flexible and proactive solutions to global businesses and clients around the world in the speediest of timeframes.
Guernsey's approach to building, diversifying and preserving its financial services industry embodies Victor Hugo's quote about initiative.
An original version of this article was first published in eprivateclient's 2017 Guernsey report, January 2017.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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