In most jurisdictions there is a requirement under local company legislation that directors should prepare accounts and present them to the shareholders at the Annual General Meeting. However, where there is no tax to be assessed on the profits of the company, there is rarely a requirement to present the accounts to any government authority or file them on the public register. Even if the accounts do not need auditing it is good business practice for them to be prepared in accordance with the relevant companies law so that all shareholders and directors have access to – and can be seen to have access to – relevant financial information upon which proper business decisions can be made. Sovereign provides a highly competitive accounts service package that ensures companies avoid penalties by complying with this requirement.
Aviation, including Aircraft Registration
The Guernsey Aircraft Registry was launched in December 2013. The Registry is run as a public-private partnership between the Bailiwick’s Department of Commerce and Employment and Dutch company SGI Aviation. SGI Aviation have established a Guernsey based company – SGI Aviation (Guernsey) Limited to carry out day to day running of the registry with oversight powers and ultimate responsibility resting with Guernsey’s Director of Civil Aviation. The registry is branded as “2-REG, Channel Islands Aircraft Registry” (CIAR) to reflect the “2-“ registration prefix allocated to the CIAR.
Sovereign Trust (Channel Islands) Limited works in conjunction with the aviation division of the Sovereign Group, Gibraltar-based RegisterAnAircraft.com (RANA), to provide solutions to clients who wish to register and hold their aircraft within a structure. Combining the experience acquired over 20 years in the field of aircraft registration and offshore company management, RANA offers a complete range of professional and highly tailored services to aircraft owners and operators worldwide.
Sovereign is able provide introductions to a number of banks in Guernsey and elsewhere in the world with which we have long-term relationships. Sovereign can also assist with account opening procedures.
The introduction of the Guernsey Foundations Law has provided clients with a foundation solution to use alongside, or instead of, a trust. It is a very useful structure for asset protection, wealth planning and dynastic planning. A Guernsey foundation is also useful for corporate entities looking to create an orphan structure where the assets of a particular entity can be held in a foundation, rather than being an asset on that company’s balance sheet.
Once registered, a Guernsey Foundation acquires its own separate legal status or personality, which is separate to its founder, council of members and beneficiaries. A Foundation has limited liability. It can own assets, contract obligations and be part of administrative or judicial processes and its capacity is not limited by anything in the Foundation Rules or the act of any person appointed under the Rules.
The purpose of the Foundation may be charitable, non-charitable or a mixture of both and may benefit a person or class of persons or be to carry out a specific purpose, or a mixture of both. The purpose must be reasonable, certain and possible and must not be unlawful, against public policy or immoral. A Foundation cannot directly engage in commercial trading not incidental to the attainment of its purpose.
A Foundation is treated as a body corporate for income tax purposes in Guernsey. Guernsey companies are subject to tax at 0% on profit in Guernsey, with the exception of income from banking and local property/land, which is taxed at 10%.
A Foundation must appoint a licensed Registered Agent in Guernsey unless the Council is a licensed corporate body or individual based in Guernsey. The Registered Agent must have a Guernsey business address and be licensed as a Guernsey fiduciary. The Foundation must notify the Registrar of changes to the Constitution within one month of those changes.
On submission of an application and accompanying documents, the Registrar can establish a Foundation within 24 hours. A Foundation must file an Annual Validation to the Registrar together with the prescribed fee within one month of the Annual Validation date. There is no requirement to file accounts with the Registrar, but a Foundation must keep accurate and up to date accounting records.
Immigration and Residency
The immigration legislation is more restrictive than the UK, due to Guernsey not being a member of the European Union. However, the property market in Guernsey is divided into an open and local market. Individuals who are not from Guernsey can only live in open market property, unless they have a working licence. This is generally more expensive than local market property.
- Immigrant Investor Programmes
An individual’s passport dictates where they are entitled to live, work or travel. Some passports open doors for you and family worldwide, others seriously limit your freedom of movement and may even compromise your wealth or security. Whether you are seeking to improve your ability to travel, protect your assets or retire to an exotic location, you should consider securing alternative citizenship or residency. Immigrant Investor Programmes (IIPs) allows foreign citizens to invest in return for a formal immigration status. Sovereign and its specialist external partners can guide you through the best IIPs worldwide to suit your particular circumstances and requirements.
- Our list of available IIPs includes, but is not limited to:
• Antigua and Barbuda
• Canada (Quebec)
• St. Kitts and Nevis
• United States
Insurance is one of the most effective ways to manage risks and protect your assets, and is a vital part of the wealth management process. Gibraltar-based Sovereign Insurance Services (SIS) provides a full range of insurance broking services – from home, contents, travel, accident and life cover through to more complex products such as “key man”, professional indemnity and kidnap and ransom cover – at the most competitive pricing levels available in the international insurance markets. SIS is licensed by the Gibraltar Financial Services Commission to act as an insurance intermediary for general insurance business within the European Economic Area (EEA) but also has strategic partnership arrangements with a series of underwriters and brokers throughout the international insurance community so as to be able to meet a client’s insurance requirements anywhere in the world.
Setting up a Company
It is relatively straightforward to set up or purchase a company but it is important to understand how to structure the ownership of that company, how it should be administered and how to organize its commercial arrangements. Every case is different and a high level of expertise is required to ensure that the corporate structure is effective and fully compliant. Once we have understood your personal and business requirements, Sovereign is in a unique position, through its global network of offices, to give guidance on a suitable structures available to meet those needs.
Marine, including Yacht Registration
Guernsey is a Category 2 British register which means that it is restricted to pleasure yachts of not more than 150 tons gross and other commercial vessels as specified, operating within local waters. There would be no VAT exposure for a Guernsey company purchasing/holding a yacht from outside the EU for use outside the EU. The Guernsey Register is administered by the States of Guernsey Registry of British Ships.
Gibraltar-based RegisterAYacht.com (RAY) is the marine division of the Sovereign Group. It was formed in 2000 to provide marine corporate and administration services to yacht owners, as well as to maritime law firms, yacht managers and brokers and other professional firms involved in the yachting industry. Initially established to register vessels under the British Red Ensign, RAY is now registering, administering and managing yachts – both pleasure and commercial – on a worldwide basis.
Nominee Shareholder Services
A minimum of one shareholder is required and corporate shareholders are permitted. Bearer shares are not permitted and details of the beneficial owner of a company must be communicated to the Guernsey Registry as part of the incorporation process. A share register must be maintained at the registered office address of the company and must be available for inspection by any member of the public. Details of shareholders are also maintained on the public file at the Company Registry but anonymity can be preserved by the use of nominee shareholders. Documents can be sent electronically from the company to shareholders where agreed by the shareholder.
Overseas Property Ownership
Sovereign assists many of its clients with the acquisition of real estate worldwide. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our regional knowledge of property ownership laws and regulations, along with our tax planning expertise, we can help you reduce any potential exposure. Most people who own or intend to own property abroad will not be fully conversant with local legal procedures or taxes – stamp duties, municipal and wealth taxes – and may not fully recognise the longer term implications in terms of potential exposures to capital gains tax, inheritance tax or forced heirship rules. Substantial benefits may be derived through the use of corporate, trust or foundation structures to address these issues.
By outsourcing your payroll you can free up your valuable time and resources to concentrate on the important business of running your company. Sovereign can provide a comprehensive yet flexible outsourced payroll service tailored to each of our client’s specific requirements.
Pension plans are an important component of all wealth planning. Sovereign offer a range of retirement savings solutions and pension plans including Qualifying Recognised Overseas Pension Scheme (QROPS), Qualifying Non-UK Pension Scheme (QNUPS) and other retirement savings options.
- Qualifying Non-UK Pension Scheme (QNUPS)
Under UK legislation introduced in 2004, effective from 6 April 2010, UK resident individuals are entitled to transfer their non-UK pension assets to a Qualifying Non-UK Pension Scheme (QNUPS) within the meaning of the Inheritance Tax Act. QNUPS are open to UK residents, including those permanently residing in the UK, and overseas residents.On moving abroad many British expatriates will still have an exposure to UK inheritance tax on their estate as they will be considered by HMRC as domiciled in the UK. Domicile is not the same as residence and is not easily changed. The exposure to UK inheritance tax can continue many years after a person ceases to live in the UK.
QNUPS may also provide attractive pension planning for non-UK resident and non-UK domiciled individuals who may decide to move to the UK. Our QNUPS pensions are registered with the Guernsey Income Tax Office and are bound by the rules that govern Guernsey pensions.
- International Retirement Savings Plans
An international retirement savings plan is a low cost highly efficient method to plan your retirement and long-term future. It enables you to accumulate wealth to fit your financial circumstances as they change. There is no need for a regular fixed monthly commitment as assets can be added to the plan at any time. Free from income or capital gains tax, retirement fund growth will be maximized from the outset.International Retirement Savings Plans can be established as individual plans, joint plans for spouses or as multi-member plans. This allows for the creation of a bespoke plan for members, with a multi-member plan providing an additional opportunity to contribute jointly held assets and to specify from the outset the proportion the assets are to be held in between members. Additionally, the International Retirement Savings Plans are an unapproved retirement annuity trust, which provides greater flexibility than schemes approved by the Retirement Annuity Supervisor of Guernsey Income Tax Office. It therefore should be regarded more as a retirement savings plan than a pension in the traditional sense. An International Retirement Savings Plan is open to anyone aged over 18 years of age, save for residents of Guernsey and Jersey.
An International Retirement Savings Plan provides you with a retirement vehicle where you remain in control; you decide where the retirement fund is invested and how it is held, and the plan can be tailored to comply with any rules where you live. The plan is fully adaptable should you need to re-locate to another country and is therefore “portable”.
- Qualifying Recognised Overseas Pension Scheme (QROPS)
On moving abroad many British expatriates will have left their UK pension arrangements in place. These pensions remain subject to UK pensions law. As a result, the pension income may be subject to UK income tax (20% deducted at source). Additionally, the UK investment restrictions relating to pensions would apply indefinitely and the member payment charges (up to 55%) may apply on death.Under UK legislation introduced in 2004, effective from April 2006, expatriates or UK residents who have a demonstrable intention to move overseas may transfer the value of their UK pension rights to a non–UK pension scheme and thus potentially avoid most of the normal restrictions imposed on the pension fund if it remained in the UK. The transfer must be made to a Qualifying Recognised Overseas Pension Scheme (QROPS) that is recognised by HM Revenue & Customs (HMRC).
Guernsey was able to accept transfers into a QROPS until May 2012 when HMRC denied Guernsey as a jurisdiction to accept further transfers. Sovereign continues to administer a significant number of QROPS in Guernsey but all new transfers must be made via the Group’s Malta, Gibraltar and Isle of Man offices.
A minimum of one director is required for a Guernsey company and corporate directors are permitted. Details of directors must be kept at the registered office and appear on the public file kept at the Company Registry. The directors must file an Annual Validation Return with the Company Registry by 31 January each year. The Annual Validation gives details of the current directors and registered agent, the share capital of the company and confirms that the register of members is up to date. To ensure that a Guernsey company is not deemed tax resident in any other country it is advisable that the majority of the board of directors is based in Guernsey. Sovereign can provide professional director and management services.
Trademark and Intellectual Property Services
The intellectual property (IP) associated with a business name or system can be one of its most valuable assets – but only if it is properly protected. Any business that wishes to establish a national or international identity should take steps to protect the use of its name, logo or other IP, such as patent rights, formulae/processes, designs, trademarks, franchises, licence agreements, “know-how” and copyrights. Given the importance of IP to modern businesses, Sovereign has established an intellectual property division that specialises in registration, monitoring, advice and proactive assistance.
Guernsey launched the world’s first image rights legislation and image rights register in late 2012 and remains the only the jurisdiction to do so. The law has opened up a new chapter in asset protection and exploitation management and has seen a steady stream of registrations with the island’s Intellectual Property Office.
Traditionally, the main way to protect the intellectual property in a personality has been through trademark rights. While there are other related IP rights that come into play, such as copyright and design rights, trademarks are the most relevant. However, they only go so far in protecting the rights of the modern celebrity and sports star, whose interests are wider ranging than ever before. Guernsey’s image rights legislation addresses the needs of the modern marketplace by allowing a personality to formally register not only images but also other characteristics of themselves.
The rationale is that individuals should have control over their image and how it is used, but they should also have the capacity to earn a livelihood from that image. Guernsey offers an environment with the financial infrastructure and expertise necessary where this can become a reality. Sovereign has been assisting clients to protect valuable intellectual property rights for over 20 years and can assist with the registration of image rights on the Guernsey Registry.