Guernsey foundation law ‘a welcome boost’
03 Jan 2013
The introduction of Guernsey’s foundation law on 7 January will be a “welcome boost” for the island’s financial services industry.
Commerce and Employment Minister Kevin Stewart said it would offer the industry “an edge in an increasingly competitive global environment”.
It follows the introduction of similar legislation in Jersey in 2009 and the Isle of Man in 2011.
The department has said it could create an extra £100,000 a year in revenue.
Foundations are similar to trusts, but are based on civil law.
Reputational damage
Trusts are not used in many civil law jurisdictions, such as the emerging markets in continental Europe, South America and the Far East.
The department has said the lack of knowledge of trusts was a barrier for Guernsey’s financial services sector in developing new business.
It said foundations are well established in such jurisdictions and there is a large international market for them with more than 200,000 in the Netherlands.
The department conducted three years of research into possible negative effects on the island’s reputation based on their introduction.
It decided to restrict the creation of foundations to those licensed by the Guernsey Financial Services Commission to ensure they comply with all the necessary regulations.
The law was approved by the Privy Council on 12 December after being passed by the States in July.
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