It has already agreed in principle to the introduction of foundations, however a six-week consultation on the proposals is drawing to a close. The consultation sought to garner industry views on issues such as their exact structure, capital requirements and taxation.
Guernsey’s plans to create a foundations law follows their successful introduction in fellow Channel Island Jersey in 2008. Since the introduction of the financial vehicles in Jersey 94 foundations have been established. Jersey does not keep records of the number of trusts that exist, but there are 881 regulated trust company businesses, according to the Jersey Financial Services Commission website.
Foundations play a similar role to trusts and are likely to be mainly used as vehicles for holding and protecting family assets and inheritance planning, with most clients likely to come from civil law, rather than English common law, countries where trusts are not acceptable legal structures.
In a statement, Peter Niven, chief executive of Guernsey Finance, a body which promotes the financial services of the Crown Dependency, said he hoped the foundations law will help attract investment from some of the emerging economies.
He said: “Our wealth management industry has grown a reputation for its high standards and significant expertise in using trust and company structures and the introduction of foundations will provide another tool for practitioners to meet the needs of clients.
“In particular, we expect the foundation structure will be attractive to clients based in civil law jurisdictions in Europe and also further afield in the emerging markets of China, Russia and Latin America where the trust concept is less familiar than in common law countries such as the US, Canada and the UK.”
The consultation period on the foundations law was launched on Monday 11 April and closes next week on Monday 23 May. For more information and to view the draw legislation visit: http://www.guernseyregistry.com/ccm/navigation/foundations/
