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GUERNSEY COMPANY
Guernsey is one of the most well regulated and well respected offshore centres in the world where restrictive due diligence requirements limits the type of person or institution from setting up a business on the island. In some opinions Guernsey offers similar services to Gibraltar, except that costs are considerably higher in Guernsey.
Geographical Location
The Channel Islands
The islands of Guernsey, Jersey and the other Channel Islands represent the last remnants of the medieval Dukedom of Normandy that held sway in both France and England . These islands were the only British soil occupied by German troops in World War II.
Guernsey
Guernsey is the second largest of the Channel Islands, and together with Alderney and Sark forms the Bailiwick of Guernsey. The Bailiwick occupies a total land area of 194 sq. km.
Population
The population is approximately 65,500.
Political Structure
The Bailiwick of Guernsey forms part of the British Isles, but is not part of the United Kingdom . H.M. Queen Elizabeth II is the Chief of State, and is represented by a Lt. Governor. There are no political parties in Guernsey and the 60 seats in the Assembly of States are all held by independents. 33 of the 60 seats are elected by universal suffrage. Alderney and Sark also have their own local assemblies, with Alderney also having its own Companies Registry.
Infrastructure and Economy
Guernsey previously relied on Horticulture (primarily tomatoes) and Tourism as the basis of its economy. In recent years, Horticulture has been in decline, and Guernsey 's financial centre has become increasingly important. Most of the major international banks have either a branch or subsidiary in Guernsey . The Island is also home to branches or subsidiaries of many major international insurance companies.
Language
English
Currency
Guernsey Pound which are at par with Sterling . Guernsey produces its own notes and coins, but U.K. Pound sterling also circulates freely on the Islands.
Exchange Control
None
Type of Law
Common Law
KEY FEATURES TABLE
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General
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Political Stability
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Good
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British Based Legal System
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Yes
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Type of Company
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Exempt
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Disclosure of Beneficial Owner
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Yes
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Migration of Domicile Permitted
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No
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Tax on Offshore Profits
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Nil
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Non-English Language Names Allowed
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Yes
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Corporate Requirements
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Minimum Number of Shareholders
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Two
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Minimum Number of Directors
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One
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Bearer Shares Allowed
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No
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Corporate Directors Permitted
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Yes
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Secretary Required
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Yes
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Standard Authorised Share Capital
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£5,000 ($9,250)
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Local Requirements
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Registered Office/Agent
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Yes
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Company Secretary
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No
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Local Directors
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No
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Local Meetings
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No
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Government Register of Directors
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Yes
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Government Register of Shareholders
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Yes
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Annual Requirements
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Annual Return
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Yes
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Audited Accounts
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No
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Recurring Government Costs
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Annual Tax/Licence Fee
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£500 ($925)
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Annual Return Filing Fee
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£100 ($185)
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COMPANY FORMATION
Type of Company for International Trade and Investment
Exempt Company
Procedure to Incorporate
Consent to incorporate a Guernsey company must be sought from The Financial Services Commission, application is then made to a Judge in Chambers for consent to register. Memorandum and Articles of Association, statement of location of Registered Office and details of the first directors are then lodged with the Registry.
Restrictions on Trading
Cannot, without regulatory approval, undertake, inter alia, commercial banking, trust, insurance, financial or investment business.
Powers of Company
A Guernsey Company has all the powers of a natural person.
Language of Legislation and Corporate Documents
English.
Registered Office required
Yes. In the jurisdiction.
Registered Agent required
No requirement.
Name approval required
Yes, by formal request to the financial services Commission
Shelf Companies Available
No, due to disclosure requirement of beneficial ownership and trading activities.
Time Scale to Incorporate
One Week.
Name Restrictions
A name that is similar to or identical to an existing company or registered entity. Names of well known multi-national companies, without prior written consent. Names that have implied illegal activities. Names that imply Royal or Government patronage, either local or foreign.
Names Requiring Consent or a Licence
"Bank", "Insurance", "Assurance", "Re-Insurance"
Language of Name
The name of a Guernsey registered Company can be in any language as long as the authorities are advised of the meaning on the name application form. The name application will then be granted, or otherwise, under the current guidelines regarding the use of certain words, etc.
Suffixes to Denote Limited Liability
A company with limited liability must end its name with Limited, no abbreviations are permitted.
Disclosure of Beneficial
Ownership to Authorities Yes, prior to incorporation. If beneficial ownership changes Financial Services Commission has to be informed and consent sought.
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
Authorised Share Capital
The normal Authorised Share Capital is £5,000 ($8,000) or its foreign currency equivalent, although authorised capital may be nominal e.g. £2 ($3.20).
Minimum Issued Capital
Equal to the value of the shares issued to the subscribers.
Classes of Shares Permitted
Registered Shares
Preference Shares
Redeemable Shares
Non-redeemable Shares
Shares with or without voting rights
Bearer Shares Permitted
No.
Taxation
Exempt companies pay an annual license fee of £500. Resident Guernsey companies pay income tax at a rate of 20 percent on world-wide income.
Double Taxation Agreements
Yes, with United Kingdom and Jersey, but only applies to resident individuals and companies.
License Fees
Exempt companies pay an Tax exemption fee of £500.
Annual Return filing Requirement
Yes. Has to be filed by end of February in each year.
Penalties
No statutory penalties for late filing of Tax exemption, but late filing of such fee may result in loss of Exempt status. Statutory penalties apply for late filing of Annual Return.
Financial Statement Requirements
Required for Resident Companies, not for Exempt, although Financial Services Commission reserves the right to call for accounts at any time.
STRUCTURE OF MANAGEMENT
DIRECTORS
Minimum number of Directors
One, who must be a natural person. If a company has a sole Director, the sole Director cannot be the Company Secretary.
COMPANY SECRETARY
Company Secretary Required
Yes. Can be a natural person or body corporate.
SHAREHOLDERS
Minimum number of Shareholders
Normally two.
Jersey Private Company Limited by Shares
Companies incorporated in Jersey are governed by the Companies Law 1991 which is based largely on the English 1948 Companies Act. Jersey companies are limited by shares; there are no forms comparable to those of English companies limited by guarantee or unlimited companies. A private company is any company that is not a public company.
Shelf companies are not available in Jersey ; however the formation process is quick and inexpensive provided that a new company does not intend to carry on business on Jersey itself. Private companies make a annual return with a fee of £120 and must have a registered office in Jersey . Accounts need not be audited, but have to be filed with the Jersey revenue authorities.
A company wanting to do business as such on the island will need to provide a great deal of information to the authorities in order to obtain the necessary consents and licenses; in fact the authorities actively discourage new business activity in most cases in order to conserve scarce resources.
Exempt Private Company
A private company limited by shares can apply to the Comptroller of Income Tax to be exempt; the application costs £600 and is subject to the following conditions (this is a simplified statement):
- Jersey residents must not have any direct interest in the shares of an exempt company, but may own shares in a company which does.
- The exempt company's beneficial owners must be disclosed to the Financial Services Commission
- The company must not have failed to pay income or corporation tax in a previous year
- The company must not have been exempt in a previous period separated from the current period by one year or more, unless there has been a substantial change of ownership
International Business Companies
Since 1993, the status of International Business Company can be held by a newly-incorporated Jersey company or the branch of a foreign company. An IBC is resident in Jersey for tax purposes but the rates of tax are very low on non-Jersey income. Jersey residents may not hold shares in an IBC. An annual advance tax payment of £1,200 must accompany an application for IBC status. As for private companies in general, beneficial ownership has to be disclosed, but is not kept on the public record.
There is no legislation in Jersey governing ordinary partnerships; the law for General Partnerships is similar to English law as in the Partnership Act 1890. Partnership is between persons (which can include companies) and the liability of each partner is unlimited. There is no requirement to register details of a partnership. Resident partners are liable for tax on world-wide profits.
More information about forming a Gibraltar Company
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