Guernsey is a small island economy with a population of approximately 67,000 people. The economy is heavily reliant on the financial services industry, which accounts for the majority of economic activity in the country. Guernsey is known for its expertise in offshore finance and is home to a number of banks, insurance companies, investment funds, and trust and fiduciary service providers.
In addition to financial services, Guernsey has a small agricultural sector, as well as a growing tourism industry. The island’s mild climate, natural beauty, and rich cultural heritage make it a popular destination for visitors from around the world. Overall, Guernsey has a relatively prosperous economy, with a high standard of living and a low unemployment rate. The country has a strong regulatory framework and a stable political environment, which has helped to attract foreign investment and promote economic growth.
Consequently, if you too are contemplating starting a company in Guernsey but are concerned about Guernsey company setup cost and timeline then Tetra Consultants is here to solve all your problems. In this article, Tetra Consultants’ team of experts has provided an overview of the benefits of setting up a company in Guernsey along with insights on the steps of Guernsey company registration as well as the Guernsey company setup cost and the timeline associated with it.
Why should you opt for a company set up in Guernsey?
Guernsey is a popular jurisdiction for company set up for several reasons, including:
- Taxation: Guernsey has a favorable tax regime, with no capital gains tax, inheritance tax, or value-added tax (VAT). Guernsey companies are subject to a standard rate of corporate tax of 0%, making it an attractive location for businesses seeking tax-efficient structures.
- Political stability: Guernsey is a stable jurisdiction with a strong legal system based on English law. It is a British Crown dependency, which means that it has a high level of autonomy while still being under the protection of the UK government.
- Reputation: Guernsey has a reputation as a reputable and well-regulated financial center. It is home to many well-known financial services firms and has a strong track record of compliance with international standards on anti-money laundering and counter-terrorist financing.
- Flexible company structures: Guernsey offers a range of company structures, including limited liability companies, protected cell companies, and incorporated cell companies. This flexibility allows businesses to choose a structure that best suits their needs and objectives.
- Proximity to Europe: Guernsey is located in the English Channel and is just a short flight away from major European cities such as London and Paris. This makes it a convenient location for businesses seeking to access European markets.
Steps to register a company in Guernsey
Here are the general steps to register company in Guernsey:
- Determine the suitable company structure: To officially register company in Guernsey, you need to be aware of the requirements and legal structures available in the nation. If engage Tetra Consultants, our team of experts will thoroughly understand your business needs and goals and advise and guide you on the available business structure and the process to register a company and the requirements associated with it.
- Additionally, to carry on the business registration process on your behalf you need to authorize an agent to duly represent you in front of the regulatory authorities. Hence at the first step of company formation in Guernsey, the client will sign a power of attorney in our favor to further the process of company formation in the nation.
- Guernsey offers several options in terms of business structure for company establishment. Each one has its own specialty. The different types of business structures available for company formation in Guernsey are described below.
Companies Limited by Share: The most common type of business entity formed in Guernsey is a company limited by shares. Typically, trading businesses and straightforward asset-holding entities will be established as companies limited by shares.
- The fundamental advantage of companies limited by shares is that each shareholder’s liability for the obligations of the corporation is restricted to the amount (if any) still owed on the shares they own. As a result, after the subscription fee for the shares is paid (for instance, a member may pay £5 in exchange for 5 shares at $1 each), the member will no longer be liable for the company’s obligations.
- Companies with a share capital may have one or more members, but at least one director is required.
Companies Limited by Guarantee: Companies limited by guarantee are frequently used to incorporate charities and sports and/or social clubs since they are typically utilized where the members do not expect to obtain any remuneration for their stake.
- In general, members of a company limited by guarantee do not own shares (although there is the option under Guernsey company law for companies limited by guarantee to issue shares and have shareholders as well as guarantee members). Rather, each member agrees to donate a fixed sum (such as £1) to the company’s assets in the event that it is wound up, limiting their liability to that amount.
- Corporate entities limited by guarantee may have one or more members, each of whom may have a separate guaranteed sum, as well as a minimum of one director.
Unlimited Liability Company: Unlimited liability companies can issue both limited and unlimited shares. Members with limitless shares have infinite accountability for the company’s obligations. In other words, they essentially underwrite the company’s obligations to the extent of their own personal holdings.
- Members who possess unlimited shares have unlimited liability for the company’s obligations only while they are members or for one year after they cease to be members.
- Because of its nature, the usage of unlimited liability businesses is limited. They may be utilized when it is required to hold assets or contracts through a body corporate and creditors demand the members to stand behind the company’s commitments.
Cell Companies: Guernsey was the very first nation to pass legislation allowing the formation of protected cell businesses (PCCs), and it has since passed legislation allowing the formation of incorporated cell companies (ICCs). Cellular companies have gained popularity in the investment fund and insurance industries, notably among captive insurers. A PCC’s name must conclude with the words “Protected Cell Company” or PCC, whereas an ICC’s name must end with the words “Incorporated Cell Company” or ICC.
Reservation of company name: The next step in the Guernsey company registration process is to reserve a company name by adhering to compliances posed by the relevant authority in Guernsey which mainly concerns the name of the company should not be the same, the prohibition of using words signifying the involvement of Guernsey government and other statutory conditions. Once confirmed, you can proceed with the reservation of the company name with the Guernsey Business Registry.
Preparation of MOA: Once the company name is reserved, you can subsequently begin with the preparation of important documents required to register your Guernsey entity. The required documents consist of a memorandum and articles of association of the company. Our legal team will provide the draft of such documents for review and comments. Once the documents are approved, we will proceed to submit the same to the Guernsey Registry through Greffe.
Corporate bank account opening: Admittedly corporate bank account opening is not an easy task. But, our specialized compliance team will ensure swift account opening for your company.
Obtain a tax identification number: Apply for a tax identification number with the Guernsey Revenue Service.
Register for social security and other taxes: Register your company for social security and other applicable taxes with the Guernsey Revenue Service.
What is the overall Guernsey company setup cost and timeline?
- The overall cost of setting up a company in Guernsey can vary depending on various factors such as the type of company, the complexity of the structure, and the services required.
- While the cost to register a company in Guernsey is relatively low, it may be difficult to set up a company in Guernsey without engaging a service provider. This is because a company incorporated in Bahrain must have a local registered office. If your company does not have one, you will need to engage a service provider who can assist with the provision of a local registered office.
- Furthermore, drafting a constitution and opening a corporate bank account for your Guernsey entity may be difficult and time-consuming because it requires the necessary legal expertise and negotiation skills, respectively. Hence it may be much more convenient to employ a service provider to set up your company in Guernsey.
- For a typical Guernsey Limited Liability Company, Tetra Consultants expect to complete the registration within 2 weeks. This additionally depends on the time taken and approval granted by the Guernsey authorities. In most cases, it will take a shorter amount of time as compared to the time when any additional trading license is required to operate the entity.
- Simultaneously, Tetra Consultants’ banking team will begin the corporate bank account opening process. We expect to get a bank account secured for your entity within 4 weeks.
- Prior to the start of the engagement, Tetra Consultants will send you a project plan with the timelines stipulated for company registration, preparation of documents as well as corporate bank account opening. This is to ensure that all parties are clear on the upcoming project.
- Obtaining licenses and permits: Depending on the business activities, additional licenses and permits may be required, which can take additional time to obtain.
- It is important to note that the above timeline and costs are estimates, and the actual timeline and costs may vary depending on the specific requirements of the company. It is recommended to seek one-on-one consultation from Tetra Consultants’ team of experts to ensure that all legal and regulatory requirements are met.
- Tetra Consultants provides you with a fast and easy way to register company in Guernsey through our service package which includes company registration with the Guernsey Companies Registry; the provision of a local company secretary, and registered address; the opening of a corporate bank account; tax registration; and annual accounting and tax services. Tetra Consultants will also recommend the type of business entity suitable for your company, based on your long-term goals and business model.
- Contact us now if you wish to find more information about the company setup process in Guernsey and our comprehensive range of services allowing you to do the same. Our experienced team will revert within the next 24 hours.