72 The Guide to Wealth Planning 2013
Guernsey: are Asian clients
While the BVI and Cayman seem to be the Coca Colas and Pepsis of the offshore world for
Asian clients, Fiona Le Poidevin, Chief Executive of Guernsey Finance reveals the ways
in which Guernsey might be particularly attractive to wealthy Asians – both in and
outside of Asia.
When seeking solutions for structuring
their wealth, Asian investors are fairly
open to placing their assets in offshore
locations. But there is a tendency for
Asian clients – and advisers – to stick
to what they know, and for this reason,
the BVI and the Cayman Islands
remain the preferred choices for offshore
Historically, Guernsey’s primary introducer
markets for new business flows
have been the UK, continental Europe
and the US. However, the maturity of
these markets and the impact of the
global financial crisis have impacted
new business opportunities in these
markets, explains Fiona Le Poidevin,
chief executive of Guernsey Finance.
As such, over the last few years, there
has been a refocusing of the Island’s
drive for new business to include
emerging markets, such as Asia.
“Asia offers Guernsey diversification
from reliance on our traditional core
introducer markets,” says Le Poidevin.
Similarly, placing funds in Guernsey
can offer Asian clients diversification
for asset protection purposes. Having
some assets held offshore can protect
them from potential domestic issues in
the client’s home country. Some geographical
diversification is also logical
– for example, a client might choose
to hold some assets in the Caribbean,
some in Asia, and some in European
As well as onshore Asian high net worth
individuals and families, the large diaspora
of globally mobile Asians also
represents a significant opportunity to
Guernsey. This group includes second
generation high net worth family members
who have been educated in the
UK or Europe and have opted to remain
overseas either for work or because
they prefer the lifestyle.
The Island’s proximity to both London
and continental Europe means that it is
a convenient offshore option for these
clients: easily accessible, and in the
same time zone.
Guernsey Finance is a joint industry
and government initiative to defend
and promote the long term reputation,
stability and development of Guernsey
Fiona Le Poidevin
as a leading international centre for financial
Numerous visits and exchanges with
government officials, regulators, sector
network associations and intermediaries
have helped to raise Guernsey’s
profile in Asia.
The Guide to Wealth Planning 2013 73
The agency has also had a representative
office in Shanghai since 2007,
and has relationships with Shanghai
Municipal Financial Services Office,
the China Insurance Regulatory Commission
(CIRC), the China Securities
Regulatory Commission (CSRC) and
the China Banking Regulatory Commission
In November 2013 Guernsey Finance
attended the STEP Asia conference in
Singapore and a series of other meetings,
including the Monetary Authority
of Singapore (MAS).
And in the same month, the Guernsey
Financial Services Commission (GFSC),
signed a Memorandum of Understanding
(MoU) with CSRC to facilitate the
exchange of information between the
authorities, to ensure compliance with
their respective regulatory requirements.
This aims to promote investor
protection and the integrity of the investment
“The Island has a reputation for being
well regulated,” says Le Poidevin. “Its
high standards are delivered within an
environment which is not secret but
which is still able to offer clients the
assurance of appropriate security and
Guernsey was one of the first jurisdictions
to regulate trust and corporate
service providers. And independent assessments
by the IMF and the OECD
continue to place the Island in the top
tier of international finance centres in
terms of its standards of both regulation
and transparency and exchange of
information for tax purposes.
“As early as 2011, for instance, the Island
moved over to automatic exchange
of information in relation to equivalent
measures under the EU Savings Tax
Directive,” reveals Le Poidevin. “Other
jurisdictions are only now adjusting to
More recently, Guernsey signed a FATCA
style agreement with the UK government
– and will shortly sign a Model
1 intergovernmental agreement with
the US under FATCA, which requires
foreign financial institutions to report
US accounts to the Internal Revenue
Service via local tax authorities.
It could be argued that Guernsey’s
thorough regulatory regime and high
standards of transparency could be
off-putting for some clients.
Many clients in Asia don’t feel comfortable
with institutions having their
personal data, for security reasons.
In some Asian countries, kidnapping
and blackmail are a real threat for
However, Guernsey employs high data
protection standards to ensure client
security and privacy, Le Poidevin assures.
Client data held in Guernsey is
only available to the relevant Corporate
Service Provider (CSP) and the
appropriate regulatory authorities.
And in addition, Guernsey’s innovative
and up-to-date private client laws
are particularly attractive to clients
around the world.
The jurisdiction has a 50 year history
of establishing and administering private
wealth structures. Today this offering
includes a variety of structures
that have been developed to meet the
specific needs of wealthy individuals
A Guernsey private trust company
(PTC) can be used for succession purposes,
but also offers clients the flexibility
to maintain management and
control of the underlying assets during
their lifetime. Many clients take advantage
of Guernsey’s purpose trust to
hold shares in a PTC.
A Guernsey purpose trust has no registration
or disclosure requirements un
74 The Guide to Wealth Planning 2013
der Guernsey law, meaning the ownership
of the PTC can be confidential.
Guernsey was the first jurisdiction to
introduce a protected cell company
(PCC), back in 1997. The PCC allows
clients to create one or more cells
within the company, the assets and liabilities
of which are segregated from
the non-cellular assets, and from the
assets and liabilities of other cells.
This ring-fencing of assets means that
Guernsey Foundations were introduced
at the start of 2013. Whilst Guernsey
is a common law jurisdiction, the
law has been drafted in such a way
as to reflect legal drafting in civil
law jurisdictions – which do not usually
recognise trusts, but are familiar
with foundations. Guernsey foundations
are expected to be of particular
interest to wealthy individuals, family
businesses and entrepreneurs in
emerging market countries, many of
“Our long and strong heritage in servicing private clients over the last
50 years also means that we have a tried and tested infrastructure,
including a robust [and independent] legal system.”
when a cell incurs liabilities, such liabilities
are attributable to that cell only.
And in 2006 Guernsey brought in the
incorporated cell company (ICC).
An ICC may create one or more incorporated
cells, the assets and liabilities
of which are segregated from
the assets and liabilities of the ICC
and of the other incorporated cells.
which are civil law jurisdictions. An
example would be mainland China.
It’s crucial that a jurisdiction can offer
clients the services and support necessary
to set up and maintain these sorts
Guernsey boasts more than 150 licensed
fiduciary services providers,
ranging from multinational organisations
to independent, boutique firms.
It also has more than 50 licensed fund
managers, administrators and custodians,
currently managing assets
of GBP286 billion (US$463 billion).
And there are more than 30 licensed
banks with deposits of £90 billion
These businesses are supported by a
network of professional support services,
including multi-jurisdictional law
firms and global accountancy practices.
“Our long and strong heritage in servicing
private clients over the last 50
years also means that we have a tried
and tested infrastructure, including a
robust legal system which is renowned
for its independence – especially in relation
to judgements made by foreign
courts,” says Le Poidevin.
“We will never profess to be the cheapest
jurisdiction, and would never want
to be. But we provide a bespoke service
for our clients in order to ensure that
their assets are administered in the
best possible way, and protected for
the benefit of future generations.”