Chief Minister of Guernsey Peter Harwood examines the island’s great success in the financial services industry over the past few decades, looking at the range of products which help Guernsey to attract and promote good business.
Funds: Adapting to Ever Changi…
Guernsey has been incredibly successful over the past few decades, and without question the financial services industry has been the key to that success. It is the main engine of growth in our economy and provides jobs and business opportunities. Developing, promoting and defending our finance industry is one of our major economic objectives.
Guernsey’s strategy is a simple, but effective one. It can be summed up in one word: competitiveness.
Guernsey’s success has been built on remaining competitive in a number of areas. This includes maintaining a competitive taxation regime, which is simple and transparent and easy to apply, and implementing a proportionate and responsive regulatory regime. Continued success is also achieved through encouraging and facilitating innovation through the creation of new laws, policies and rules, such as the creation of Protected Cell Companies or the development of closed-ended funds rules. Indeed, both of those innovations led to the creation of new businesses in Guernsey and eventually turned Guernsey into a global leader.
Of course the world has changed a great deal in the last 20 years. In that time we have seen massive changes in the global financial services industry such as the development and evolution of international regulatory standards; the emergence of an international consensus on harmful taxation measures; an increased international focus on countering financial crime and preventing money laundering; and the rise of the BRIC countries, which are now the engines of global economic growth. Through those challenges and many others Guernsey has adapted, survived and prospered through maintaining its competitiveness. Guernsey’s finance sector does not stand still.
For example, Guernsey is now an emerging ‘cleantech’ cluster that now springs to mind whether you are an entrepreneur setting up a cleantech project, or a fund manager looking for the right expertise and location to set up a fund. Our offering is much wider than assisting with finance structuring via investment funds though – it includes banking services, private wealth services, intellectual property services and, in addition, Guernsey’s world-leading expertise in captive insurance.
Intellectual property provides another example of Guernsey not standing still. Intellectual property is key to the development and promotion of new technologies. Since opening its intellectual property office in 2006, Guernsey has reformed its intellectual property laws to establish itself as a leading jurisdiction for the development and exploitation of intellectual property rights. New legislation includes trademarks, copyright, registered and unregistered design rights, database rights, performers’ rights, semi-conductor topographies and plant breeders’ rights, as well as patents and biotechnological rights. And since December 2012, Guernsey has had in place world-first image rights legislation.
Guernsey is innovative and flexible. It is clear that Guernsey’s fund industry will offer flexible options when the EU Alternative Investment Fund Managers Directive is introduced. As a jurisdiction we are committed to meeting the standards that will be set and we are confident that we will be able to offer substance over form, ensuring that Guernsey can continue to meet the bespoke needs of fund managers as well as establishing a competitive edge over other jurisdictions.
Our ‘substance over form’ approach is also reflected in the way we have now introduced foundations in Guernsey. We have developed an approach to foundations that meets the needs of clients, but does so by providing services in a way that reflects our adherence to the highest international standards.
That combination of innovation and compliance will also give Guernsey a competitive edge. Guernsey meets the highest international standards on tax transparency – EU, IMF, OECD. Our firm view, our experience, is that our leadership on that agenda is an important part of our competitiveness. It helps us to attract, promote and foster good business.