Executive Summary
The Bailiwick of Guernsey (the official name) is a British Crown dependency with a high level of autonomy, in which the UK is responsible only for the defense. Guernsey is not a member of the EU, and together with Jersey is known as Channel Islands, being located in the English Channel off the coast of Normandy. Guernsey covers the area of 78 sq. km.

St. Peter Port is the capital of Guernsey. English is the predominant official language, while French is widely used in legislation. Financial services: banking, insurance, investment fund management – bring a third of the annual income to the jurisdiction. An important part of income derives from Specsavers, the largest optical group in the UK that operates in many countries of the world. Other health care companies are domiciled in Guernsey as well. Electricity, water and postal services are owned and management by the State of Guernsey; telecommunication and gas – by independent private companies. Guernsey postal boxes and telephone boxes are identical to the UK ones in their shape, but rather than being red, are painted in a blue colour.

Pound sterling (£) is the state currency, and the jurisdiction issues its own banknotes and coins that circulate together with UK pounds.

The island of Guernsey has a total area of 63 sq.km, but the Bailiwick of Guernsey comprises also smaller islands – Alderny, Herm, Sark and others, that make a total area of 78 sq.km. The highest point on the Island of Guernsey is Hautnez, which raises at 110 m above the sea level. Cropland is the main natural resource. Guernsey is divided in two parts – Haut Pas – high plateau, a more rural zone, and Bas Pas – low-laying plateau, a more residential and industrialized zone of the island. A large deepwater harbor is located at St Peter Port.

Temperate climate with mild winters and cool summers is characteristic to Guernsey. The coldest month is February (+6 degrees C) and the hottest month in a year is August with average temperature being approximately + 20 degrees C. The temperature rarely falls below zero and snow is unlikely to fall and settle on the island. Winter months are usually rainy, but July is the sunniest month.

Map, Flag and Coat of Arm

Types of Company

Private Company Limited by Shares

A company name must be approved by the Registrar and there is no distinction between private and public companies in Guernsey. It takes 1-2 weeks to incorporate a new company. The standard share capital is 10,000 GBP, and at least 0.5% is payable. Bearer shares are not permitted, and a company should have at least two shareholders. A company must have a corporate secretary and at least one director with no residence restrictions, as well as a registered office. All this information is available from a public file. Accounts and annual returns must be filed. There are no precise requirements on the number and nature of meetings that are held.

Private Company Limited by Guarantee
This type of company is similar to a private company limited by shares, but is often used for charity and non-profit purposes.

Exempt Private Company
Limited companies may apply and obtain exempt status, in which Guernsey residents may not be direct shareholders. These companies are known as Category D bodies. Beneficial ownership must be disclosed to the authority, and such a company is not supposed to trade within the jurisdiction.

Exempt Investments Schemes
Investment companies and unit trusts may obtain exempt status as well, and are called Category A, B, C bodies. Any property or investment, apart from a bank account, cannot be held in the jurisdiction, and a Guernsey resident must be involved in the administration services.

Exempt Insurance Companies
Insurance companies are known as Category E bodies, and may obtain an exempt status. Guernsey residents cannot be shareholders of such companies, and income deriving from activities conducted in Guernsey is not exempted. Multiple cells may exist within one company, and the protection basis of cell companies is the same as in exempt companies.

International Company
This type of company applies to bodies of persons that are or are not incorporated. It must never have been an exempt company, a bank or an insurance company. An international company must be fully owned by non-residents and must not trade with other Guernsey residents apart from other international companies. If this company has a business in the jurisdiction, it is taxable. Extensive information must be provided for obtaining an international company status and taxation rate is decided on the individual basis ranging from 0% to 30%. This type of company is often used for captive insurance, industrial and commercial activities, as well as financing operations.

Branch of Overseas Company
If foreign companies do not operate on the territory of the jurisdiction, there are no registration and filing requirements. In addition, if they are not fully managed and controlled from Guernsey, such companies are not taxed there.

General Partnership
Partnership law is very similar to English law. General partners are fully liable for the debts of a partnership. There are no statutory audit requirements, but annual accounts must be submitted to the administrator.

Limited Partnership
General partners of a limited partnership are fully liable for its obligations, while the liability of limited partners is limited up to the capital invested. In case a limited partnership provides financial services, such as banking, asset management, trusteeship, insurance, it must produce and file audited accounts.

No registration or filing requirements are applied to Guernsey trusts. Trust law is based on English common law and appeal goes to English Privy Council. Trustees should be resident in Guernsey. The maximum trust perpetuity is 100 years. No specific provisions exist for purpose and asset protection trusts.

International Trust
There are procedures and arrangement precisely specified in order to export a Guernsey trust to another jurisdiction, or to make an established trust in a foreign country redomicile to Guernsey. Trust accounts must be maintained even though they do not have to be audited.

A tax year in Guernsey starts on 1st January and ends on 31st December, and is called a year of charge.

If a person spends 182 or more days in a year in Guernsey, he is considered to be resident (solely or principally resident) there. Non residents are liable for income tax only on income derived in Guernsey.

It was important to be careful when dealing with real estate in Guernsey, as there was a Dwellings profit tax imposed on speculative operations on lands and buildings, which charged 100% of the profits from selling a dwelling or land, in case it was not used for bona fide residential purposes. Rules of this tax were complicated and it was not imposed frequently. Its suspension came into force by Dwellings Profit Tax Ordinance 2009, in March 2009.

Stamp duty is applied on properties, the value of which exceeds 150,000 GBP. Guernsey benefits from the free market zone of the EU, and there are no tariff barriers between EU member states and Guernsey.

From 1st January 2008 standard rate on income tax was reduced from 20% to 0%, thus abolishing exempt and international business company regimes. The major part of companies registered in Guernsey, as a consequence, are treated as residents for tax purposes. At present even those companies that conduct business on the territory of Guernsey, are liable for income tax at a rate of 0%.Companies which were considered to belong to Category D became resident in Guernsey with income tax charged at 0%, apart from financial business, such as banking, as well as income derived from Guernsey land, which is liable to 10% of income tax.

There are no capital gains, capital transfer, sales taxes or VAT. Withholding tax is charged on several activities.

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