Guernsey Offshore Company
Well over half a century ago, in 1950, the bailiwick of Guernsey became of the pioneers of offshore/non-resident regimes. At that time, nonresident registered companies (offshore companies) were subject to a set Corporation Tax of £500 per year.
Since, that law has been rescinded and replaced by more modern laws by which all offshore companies are converted to resident corporations, now subject to full taxation. However, Guernsey companies can benefit from full tax exemptions if the companies complied with the new Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989.
As such, Guernsey companies following this arrangement are referred to as Exempt Companies. The Guernsey offshore company will not pay any taxes on income generated outside of Guernsey. As an advantage for Guernsey offshore corporations, similar to Belize corporation, they can establish branch business, management offices and the like in Guernsey. Guernsey companies are no longer restricted to doing business offshore.
Motivated by new international regulatory demands, there has been a complete overhaul of the tax schedule for Guernsey companies. The 0/10 tax code is for Guernsey companies, offshore and onshore alike.
Under this tax code, regular trade Guernsey companies are subject to 0% tax whereas loan companies and banks are subject to a flat tax rate of 10%. Guernsey companies that generate income from utility or building activities are subject to a tax rate of 20%.
The 0/10 slogan is misleading in that; the Guernsey companies are subject to one of four tax options, and not just 0 and 10. Some Guernsey companies can maintain an exempt status as long as the company’s income is generated outside Guernsey. Further still, some companies/entities can pay a yearly exemption fee of £600.
The main type of Guernsey Company best suited for international business is the Ordinal Company. This Guernsey company can function as either an onshore (domestic) Guernsey company, or as an offshore company.
A Guernsey company is a legal person, separate from its members, which comes into existence upon incorporation and continues until it is removed from the Register of Companies. The Guernsey offshore company can be: a company limited by shares or limited by guarantee; an unlimited company or of mixed liability. A company is considered a mixed liability company if it has shareholders has share capital, has both guarantee and unlimited members.
Guernsey companies that are limited by shares must have share capital. The member’s liability is limited to the amount of any unpaid shares held. Companies limited by guarantee many have share capital, and the member’s liability is limited to the guarantee amount.
Guernsey companies must be incorporated with at least one member. The primary incorporation and formation document for the Guernsey offshore company are the Memorandum of Incorporation and the Articles of Association and the certificate of Incorporation which is issued by the Registrar.
Within the Memorandum of Incorporation the Guernsey company name, the company’s registered address, the type of company, the type company in respect to the liability of its members. If the company is one that has share capital, details on shares in respect to each member must be noted.
The beneficial owners of Guernsey offshore companies are required to sign a declaration of compliance that essentially states the company is incorporated pursuant to the provisions of the law .
The name of a Guernsey offshore company should end with an expression indicating the type of company, mixed liability or ML; limited guarantee company – Limited by guarantee or LBG; company limited by shares – Limited, With limited liability, Ltd.; Avec responsabilité limitée. Two or more Guernsey companies can amalgamate to form a single or a new entity; amalgamations can be undertaken with companies registered in Guernsey or incorporated in foreign jurisdictions.
Guernsey offshore companies can be incorporated in one day, and all companies must have a resident agent in Guernsey who handles the incorporation process.