Guernsey Foundations Set For 2012 Introduction, Consultation Begins

by Jason Gorringe, Tax-News.com, London

29 April 2011

Guernsey's Commerce and Employment Department has launched a six-week consultation on the proposed new foundations law.

The Guernsey Government has already agreed in principle to the introduction of foundations and directed the preparation of legislation.

The consultation in particular invites responses on:

• The precise nature of the foundation structure;
• Initial capital requirements;
• Extent of founder powers;
• Consideration of fiduciary duties;
• Taxation; and,
• Market demand for foundations.

“The launch of this consultation on the draft legislation is an important step towards the introduction of foundations into Guernsey law,” said Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the island’s finance industry.

“Our wealth management industry has grown a reputation for its high standards and significant expertise in using trust and company structures and the introduction of foundations will provide another tool for practitioners to meet the needs of clients. In particular, we expect the foundation structure will be attractive to clients based in civil law jurisdictions in Europe and also further afield in the emerging markets of China, Russia and Latin America where the trust concept is less familiar than in common law countries such as the US, Canada and the UK.”

“The drafting team has taken time to consider the exact nature of the foundation structure and so it will be interesting to see the consultation feedback on this element and the legislation as a whole.”

“I’m hopeful that by early next year Guernsey practitioners will be able to offer a foundation which enables clients to preserve and enhance their wealth and assets through a highly-regarded structure in a reputable jurisdiction.”

The consultation period on the Foundations (Guernsey) Law closes on May 23.

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