Law on Foundations in Guernsey

31.07.2012 Guernsey is not out of the general trend: on 30th July, Parliament has approved the Foundations law, which is designed to increase the economic attractiveness of the island. Guernsey - «trust» jurisdiction, however, the adoption of this Law demonstrates that the authorities do not want to be limit only to trust and so, following the example of the Republic of Panama, they are trying to raise investment to the island through the creation of the Fund. Alan Binningtone, Director of work with private clients in the RBC Wealth Management noted: not all countries know the definition «trust», that is why the customers from continental Europe will be given an opportunity to create a more familiar instrument, for example, the funds that will be interesting for the people with high personal incomes and will contribute to the development of their business in Guernsey. Guernsey’s authorities assure that funds will be subject to the same legal regulation as trusts: the new Law contains the requirement that one of the members of the Foundation’s Board must be a reporting person. In addition, despite the fact that the beneficiaries would have the right to force the Council to perform its duties, it is the required for each Fund to have a so called «guardian», to whom the members of the Board will be liable. Commenting on the use of funds in other jurisdictions, Alan Binningtone says: «the new law allowing the movement of funds from the other jurisdictions in Guernsey, will be of interest to individuals with existing structures, wishing to move their funds in a jurisdiction that is in the "white list" of the OECD». Through the adoption of the new Foundations Law, Guernsey is trying to come to the fore in the restructuring of the investment flows from all over the world, while ensuring the fully confidentiality and individual approach to each investor.

Expert’s opinion

"Companies incorporated on the «Queen» Islands long ago and deeply occupied its place in the world investment market. The constant improvement of the legislation on the Islands is intended to attract investors from all over the world.
Unfortunately, the Islands of Jersey and Guernsey are located so far away that to come to them is much more problematic than in the same the Isle of Man.
The cost of living and doing business is also high. There is a policy of entry’s restriction.
It turns out, a paradoxical situation: the authorities take measures on attracting of investments, but there is no staff who could serve new companies. Elementary, there is also no housing enough for this stuff.
Restrictions on the issuance of work visas restrain also the inflow of specialists, which could serve the companies.
As a result: on the Islands formed a sort of club moneybags who can buy local lawyers and staff to work in their companies.
On the one hand, it deters the private investors.
On the other hand, the company incorporated on Guernsey and Jersey is the sign of the entrance into the European investment establishment."

Lomakin Yaroslav ( Managing Partner of Honest & Bright Company Ltd)