Registration of foundations can only be undertaken by Guernsey licensed fiduciaries and, in anticipation of the foundations law coming into effect, the Guernsey Financial Services Commission has issued a consultation on a draft code of practice applicable to foundation service providers. The commission has requested comments on the consultation by 25 January 2013.
In pushing ahead with the Foundations (Guernsey) Law, 2012, Guernsey is following Jersey, where a foundations law went live on 17 July 2009, and the Isle of Man’s entry on 1 January 2012.
Collas Crill fiduciary expert Edward Stone said he expected to see a “significant rush of registrations in the island”.
Members of the States of Guernsey assembly agreed in July last year to implement legislation aimed at enabling trust advisers on the island to offer foundations to their clients.
Foundations are seen as appealing to investors from countries with a civil law tradition, who are often unfamiliar with trusts and in particular, their concept of the separation of legal and beneficial ownership. Foundations are said to appeal to Middle Eastern investors in particular.
In format, they are typically described as being more similar to a company than a trust. However, unlike a company, foundations have no shareholders, and their powers are exercised by a council.
