Guernsey leading the way…
Guernsey companies have continued their track record as the leading offshore vehicles for listing on the various markets of the London Stock Exchange (LSE).
As at 31 December 2014, there were currently 122 Guernsey-incorporated entities listed on the LSE markets, significantly more than other competitor jurisdictions including Jersey (92), Isle of Man (54), Republic of Ireland (53), Cayman (50), BVI (44), Bermuda (41), Russia (33), US (32) and India (31). These Guernsey- incorporated entities include both investment funds and listed trading companies1.
Guernsey added 13 new entities to the LSE markets during last year, which is also more than any other jurisdiction except the UK.
During 2014 Guernsey not only became home to more new non-UK listings than any other jurisdiction but there were also some particularly notable listings across all three markets of the LSE. Guernsey listings on the Main Market included two renewable energy funds; the Island provided the largest listing of the year on AIM; and Guernsey listings on SFM included two debt funds.
This further enhances Guernsey's position as the leading jurisdiction for non-UK LSE listings, particularly investment funds. It also reaffirms the high regard in which the Island's infrastructure and expertise is held by professional advisers in the City of London and beyond.
Guernsey entities listed on the LSE Main Market during 2014 included the John Laing Environmental Asset Group and NextEnergy Solar Fund, both renewable energy focused entities, and Schroders' European Real Estate Investment Trust.
Figures from the LSE show that Guernsey has the largest number of non-UK entities listed on the Main Market of the LSE (70), 37 entities listed on AIM including the largest listing of 2014; and that the Island is home to 15 of the 22 entities listed on SFM2.
In addition, Guernsey is the clear market leader in terms of the number of 'Equity Investment Instruments' – the majority of investment funds – listed on the LSE (73), followed by Jersey (18) and Cayman (14).
The data shows that Guernsey is the jurisdiction of choice for listings on the LSE. However, companies incorporated in Guernsey can also list on the local Channel Islands Securities Exchange (CISE), Euronext, markets in Australia, Johannesburg, Toronto and Frankfurt, as well as the Hong Kong Stock Exchange (HKEx), among many other exchanges around the world. This means that Guernsey provides an ideal gateway to global capital markets.
Key advantages of Guernsey
Using a Guernsey company as the vehicle for an LSE listing may enable a foreign trading group to access London's capital markets whilst remaining fiscally and regulatory offshore (UK tax advice should be taken and followed in every case). Other key advantages of using a Guernsey company are set out below:
- For non-Guernsey resident investors, Guernsey companies provide tax neutrality at the holding company level;
- Certain Guernsey vehicles are eligible for exempt tax status such that they will not be considered resident in Guernsey for Guernsey income tax purposes and will be exempt from tax in Guernsey on both bank deposit interest and any income that does not have its source in Guernsey (flat fee of £1,200 per annum);
- In the absence of exempt tax status, the current rate of Guernsey income tax for a company resident in Guernsey is zero;
- Guernsey companies do not under Guernsey law have to make withholdings on account of tax when paying dividends (except to Guernsey resident investors);
- No capital gains, capital transfer or corporation taxes payable in Guernsey and no stamp duty on the issue, transfer, switching or redemption of shares in a Guernsey company;
- Guernsey's companies law includes many English companies law principles, but offers more flexibility and brings Guernsey into line with jurisdictions such as the BVI and New Zealand;
- Guernsey's companies law has moved away from the capital maintenance ethos to a capital solvency requirement for any form of distributions made by the company;
- The Takeover Code applies to Guernsey companies which have any of their securities admitted to trading on a regulated market in the UK or on any stock exchange in the Channel Islands or the Isle of Man;
- Shares in Guernsey companies may be held and traded in uncertificated form;
- Securities of Guernsey companies are able to be settled through CREST, without the need for depositary settlement arrangements;
- Incorporation of companies in Guernsey is easier, speedier and cheaper than in many other jurisdictions;
- Guernsey offers a range of different fund products offering different levels of regulation to suit the targeted investor group;
- Investors are familiar with Guernsey as a well-regulated international finance centre;
- Guernsey has a wide selection of company administrators experienced in dealing with listed vehicles;
- Guernsey is in the same time zone as London with a business day that begins before Tokyo closes and continues well into New York trading time; and
- Guernsey is geographically close to Europe but independent from the EU.
Recent LSE listings on which we have advised:
- July 2014: Schroders' European Real Estate Investment Trust
- April 2014: NextEnergy Solar Fund Limited
- March 2014: John Laing Environmental Assets Group Limited
- December 2012: Starwood European Real Estate Finance Limited
- June 2011: Genel Energy plc (formerly Vallares PLC) – advising on the Guernsey law aspects
- May 2015: Toro Limited
- July 2014: SQN Asset Finance Income Fund Limited
- October 2013: Chenavari Capital Solutions Limited
- November 2011: Damille Investments II Limited