Guernsey Offshore Company Formation
A Guernsey company is formed under the Companies (Guernsey) Law 1994 as amended. The type of company normally used for international trading and investment is the company limited by shares. Guarantee companies and protected cell companies are available. There must be a minimum of two shareholders and one director. A corporate director may be used. Bearer shares are not permitted. A Guernsey company may be re-domiciled to another jurisdiction.
Before forming the company it is necessary to disclose the names of the persons who will be the beneficial owners to the Island Authorities. This information is not available to the public. For this reason shelf companies are not available in Guernsey. Private companies make an annual return and pay a filing fee and must have a registered office in Guernsey. Accounts need not be audited.
Exempt Private Company
In response to international developments Guernsey is changing its tax system. The exempt company regime will be abolished from 2008 and all companies will pay a zero rate of tax. Certain finance sector companies operating within Guernsey will be taxed at 10%. The arrangements set out below will not apply from 2008.
A private company can apply to the Comptroller of Income Tax to be exempt from taxation. The granting of exemption is subject to various conditions being met, principally the following:
- Guernsey residents must not have any direct interest in the shares of an exempt company, but may own shares in a company, which does
- Particulars of the 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
Exempt status must be applied for annually.
Procedure to incorporate a company in Guernsey
A Guernsey company is incorporated by submission of the Memorandum and Articles of Association to the Financial Services Department, together with notification of the Registered Office address, the names, nationalities and addresses of the directors and shareholders, character references relating to the beneficial owners and a full description of the proposed company’s trading and/or investment activities.
Restrictions On Trading
A Guernsey Exempt Company cannot trade within Guernsey or undertake the business of banking, deposit taking, insurance, assurance, reinsurance, fund management, asset management (other than its own assets) or any other activity associated with the banking, finance and insurance industries.
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