The Channel Islands each have their own unique advantages when it comes to offshore company incorporation. Guernsey is an independent and self-governing country. It has a long-held reputation for political stability and high degree of respectability. As with Jersey and The Isle of Man, Guernsey is not actually part of the UK, however by virtue of the Treaty of Accession entered into with the United Kingdom, it is associated with the EU, which makes Guernsey an attractive proposition for those looking to do business in Europe.
Guernsey is renowned worldwide as a safe place to do business. Its independent government work hard to ensure that companies incorporated in Guernsey enjoy favourable treatment.
Guernsey companies can only be incorporated by a corporate service provider (CSP) licence holder under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000, as amended (the Fiduciaries Law).
A summary of Guernsey Corporate Taxes is available here.
What makes Guernsey so attractive?
Tax-Free for foreign nationals – Guernsey offers 0% corporation tax for all companies owned by non-residents, trading outside Guernsey, irrespective of profits. The only exception is for those companies conducting financial services, which are regulated by the Guernsey Federal Services Commission. They would need to pay tax on their nett profits at 10%.
Further tax benefits – For non-Guernsey residents there is no capital gains, inheritance, capital transfer, VAT or general withholding tax. There is also no stamp duty on the issue, transfer or redemption of shares.
Low capitalisation – For Guernsey company formations there is no authorised capital or capital maintenance requirements. Companies can be incorporated with an unlimited number of shares at no par value for easy of future transfer.
No distinction between private and public companies – As there is no recognised difference between private and public companies, meaning any Guernsey company limited by shares may offer their securities to the public.
Quick company incorporation – A new Guernsey company can be incorporated in around five days of submission.
What is required to form a Company in Guernsey?
Company structure – Guernsey limited Companies require a minimum of one director and one Shareholder. The residency of the officers and members are subject to business activities.
Selection of a company name – The proposed name of the Company needs to be approved by the Guernsey Registry before the company incorporation can begin. The name must be not be the same or similar to any other company incorporated in Guernsey. It must also not infer that the company is associated with governmental or illegal activity.
Assessment by the Guernsey Authorities – following submission of your company application, an assessment will be undertaken by the Guernsey Authorities to establish whether any compulsory additional local substance requirements will be imposed upon the incorporation and any additional costs associated with it.
Registered office – The Company’s registered address must be in Guernsey and must not be a PO Box. All official documentation will be sent to this address.
Meet the anti-money laundering requirements – In order to meet our client due diligence requirements under EU Anti Money Laundering legislation you will need to provide a certified copy of the passport and current utility bill of each of the directors and shareholders. This is required in all circumstances, even if you choose to use our Nominee Service.
What are the anti-money laundering requirements in Guernsey?
In order to meet our client due diligence requirements under EU Anti Money Laundering legislation you will need to provide a certified copy of the passport and current utility bill of each of the directors and shareholders. This is required in all circumstances, even if you choose to use our Nominee Service.
What documents will I receive following the formation of the Company?
Once the company has been formed, you will be issued with the certificate of incorporation, memorandum and articles of association, Share certificates and all other company documents as required by law. These documents can then be used to open a bank account for the company and must be maintained to record any changes to the company.
What are the annual requirements in Guernsey?
Annual general meeting : AGMs can be indefinitely waived for Guernsey incorporations.
Annual return : An annual return, known as an annual validation is required for all Guernsey Companies.
Financial statements : The filing of annual financial statements in Guernsey is required. However companies can vote to waive audit requirements, reducing administration and cost.
What are the main types of Non-cellular Companies available in Guernsey?
A company limited by shares : the most familiar type of company, a company limited by shares has a share capital and its members (shareholders) have limited liability whereby any liability for the company’s debts is limited to the amount (if any) unpaid on the shares held
A company limited by guarantee (LBG) : an LBG can, but does not have to, have a share capital. Liability for the LBG’s debts is also limited but in the case of an LBG, liability is limited to the guaranteed amount made by its guarantee members, ie the amount a guarantee member has agreed to contribute to the assets of the LBG in the event of its winding up (which continues for one year after ceasing to be a member)
An unlimited liability company : similar to an LBG, an unlimited liability company can have a share capital (but does not have to). The liability of its members is however unlimited both while a member of the company and for one year after ceasing to be a member
A mixed liability company : a mixed liability company gives the option of having a share capital (if preferred) and a variety of different types of members, eg guarantee members, unlimited members and shareholders (if it has share capital). Members’ liability can be prescribed by the company’s memorandum and articles of incorporation or, in the absence of such, members’ liability will be joint and several to the maximum extent of their liability
What are the main types of Cellular Companies available in Guernsey?
A Protected Cell Company with Limited Liability (PCC) : a PCC is a company which has has a non-cellular core and separate cells. It is a single legal person; however the protected cells (a cell) are not (although each cell must have its own name or designation and have its own cell capital). Assets in a PCC are either ‘cellular’, ie attributable to a particular cell or ‘non-cellular’, ie core assets. Subject to certain exceptions, the assets of one cell are not available to shareholders or creditors of another cell, or to shareholders or creditors of the core. Assets held by the PCC which are not distinctly held by a particular cell are deemed to be assets of the core.
An incorporated cell company with limited liability (ICC) : an ICC is a company with the ability to create its own incorporated cells (IC) as part of its corporate structure for the purpose of segregating and protecting the assets of the incorporated cells. An ICC is based on the same principles as a PCC in that an ICC may comprise any number of ICs however, unlike a protected cell of a PCC, an IC is a single legal person separate from its ICC with many of the attributes of a non-cellular company.
What is the regulatory environment like in Guernsey?
With a flexible regulatory environment, Guernsey offers a multitude of vehicles including cellular and non-cellular corporations, partnerships, limited partnerships, limited liability partnerships, unit trusts, trusts and foundations. There are also proposals to introduce limited liability companies (LLCs), a flexible hybrid structure combing the features of a company and a partnership.
How easy is it to close a Guernsey company?
Please contact us in order to discuss closing your company in Guernsey.
How fast can I incorporate a Company in Guernsey?
There are three service options:
Normal Incorporation : a standard company incorporation which can be processed within 24 hours
Rapid Incorporation : a same day two hour incorporation (used in exceptional circumstances)
Special Incorporation : a 15 minute incorporation for basic asset holding companies with standard articles of incorporation (Articles), in each case, subject to receipt and satisfaction of requisite information/documentation.
What about banking facilities in Guernsey?
Guernsey is an important regional investment centre and has developed sophisticated international banking facilities to support it. Many major international banks have branches here, together with local commercial banks and the financial system.
For assistance with opening a bank account in Guernsey, please contact us.