One year on from the implementation of economic substance requirements in Guernsey in January 2019, it is evident that the jurisdiction has emerged stronger as a result. Guernsey was moved onto the European Council’s ‘whitelist’ of cooperative jurisdictions at the earliest opportunity in March 2019. Not all jurisdictions were able to satisfy the requirements so efficiently.
Deputy Chief Executive of Guernsey Finance Dr Andy Sloan said: “Given the genuine economic substance of the jurisdiction…the requirements to demonstrate that companies are ‘directed and managed’ in Guernsey in relation to the substance activity…was nothing more than ‘dotting the i’s and crossing the t’s’. It’s clear others have had to make material change in their attempts to meet economic substance requirements.”
According to research undertaken by Guernsey Finance, nine out of 10 respondents believe that substance is now a key determinant of jurisdictional choice and having successfully implemented legislation that addresses the substance requirement without the need for wholesale changes, Guernsey is now seeing an increase in enquiries for new company setups and also enquiries for company migrations and re-domiciliation of existing companies from other offshore jurisdictions.