Guernsey Offshore Banking [Guide]

Guernsey offshore banking is a bit of a misunderstood topic. While there are over 20 banks operating on this tiny island, they cater to specific clients with very unique banking requirements.

Not surprisingly, if you fit into one of these client categories, Guernsey could be an excellent place to bank. If not, you may want to consider other offshore alternatives instead.

In this article, we’ll explore the specific client types that are best positioned to benefit from Guernsey offshore banking. We’ll also share the specific benefits and advantages that clients here can look forward to. And, we’ll discuss how to get started with Guernsey offshore banking, even if you’re starting from scratch and have never banked in the Channel Islands before.

Before moving on, if this is your first time visiting GlobalBanks, don’t forget to download your free copy of the Non-Resident Banking Starter Guide. It helps non-residents identify and open offshore bank accounts in jurisdictions like Guernsey. 

Guernsey Offshore Banking 101

Guernsey offshore banking is often misunderstood. That’s because most people simply label Guernsey as a “tax haven,” assume it has limited banking options, and leave it at that.

But, Guernsey offshore banking is far more sophisticated than what you’d expect in the typical offshore financial center. And, unlike many offshore hubs that are dying off as significant portions of the offshore world moves back “onshore”, Guernsey is becoming more relevant and increasingly important. But, more on that in a bit.

Here’s a quick overview of what you need to know in order to determine if Guernsey offshore banking is right for you or not…

Bailiwick of Guernsey

Guernsey Offshore Banking Today
The Bailiwick of Guernsey is a collection of small islands, sitting off the coast of Normandy, France. Just like Jersey, Guernsey is a British Crown Dependency, and together they form the Channel Islands.

The Bailiwick of Guernsey includes three separate states (or sub-jurisdictions) which are Guernsey, Alderney, and Sark. Each of these states is their own island, have their own corporate registry (except for Sark), are fiscally autonomous, and make their own laws related to taxation and a variety of other civil matters. In this article, we will be discussing Guernsey only, as Alderney and Sark will be covered in other articles.

Similar to Jersey, Guernsey also has strong ties to the UK and the City of London. As a Crown Dependency, the UK is responsible for defense and foreign affairs. Additionally, local legislation still technically requires approval from the UK Privy Council.

Guernsey Offshore Industry

Like many offshore jurisdictions, Guernsey offshore banking has evolved since the mid-1900s. That’s when the banking sector started to expand. London merchant banks established a presence from the 1960s, and the groundwork for Guernsey’s offshore financial industry was formed.

But the evolution of Guernsey’s offshore banking industry was (and still is) heavily dependent on specialized financial and wealth management industries. In particular, this includes the formation and administration of trusts, administration of various investment vehicles, and captive insurance entities.

Not surprisingly, Guernsey has become a popular jurisdiction for institutional investors and financial service professionals. Likewise, Guernsey offshore banking has become a favorite destination to service the banking needs of such entities.

Guernsey Offshore Today

Today, Guernsey banks have over £100 billion in deposits, making it a significant offshore financial center. Though unlike other financial centers, Guernsey doesn’t find itself on any blacklists or watchlists.

That said, Guernsey is considered a tax haven. In fact, like other offshore financial centers, it has no capital gains tax, no inheritance tax, no wealth tax, no corporate tax (except for banks at 10%), and favorable income tax rules.

Plus, Guernsey has other benefits as well…

Guernsey Becoming Increasingly Important

Guernsey Offshore Banking Importance
Guernsey is becoming increasingly relevant to certain client groups, in particular, those active in fund management, estate planning, international asset management, private equity, and more.

For example, in 2018 over 30% of the European junk bond issuance moved to Guernsey’s stock exchange. That represented over US $25 billion in one year. Two years prior, that number was basically zero. This was thanks to new EU regulations forcing transparency on bond issues, which (thanks to its independence) don’t apply in Guernsey.

Likewise, while the EU and the UK continue to wrestle through their marital issues, Guernsey is an independent state from all involved parties. And this makes Guernsey (along with Jersey and the Isle of Man), an ideal hub for individuals and businesses that have financial commitments in both the EU and the UK — especially if SEPA transfers are a priority.

Finally, Guernsey is an important launching pad for companies planning to list on the London Stock Exchange. In fact, there are more Guernsey companies on the LSE than any other country in the world — not including the UK of course.

But, what if you don’t have any plans to list on the LSE or issue European junk bonds? Well, Guernsey offshore banking might still work for you.

Who Should Consider Guernsey Offshore Banking?

Guernsey Offshore Banking Opportunities
Now that you’re up to speed on Guernsey offshore banking and its status as an offshore hub, let’s discuss who should consider banking here.

Client Types for Guernsey Offshore Banking

Guernsey offshore banking caters to the same clients that the island’s offshore industry is designed to serve.

  • Institutional investors
  • Guernsey trusts
  • Guernsey foundations
  • Investment funds
  • Family offices
  • Independent asset managers
  • Captive insurance vehicles
  • Guernsey companies
  • High net worth individuals

With this in mind, it should be no surprise that prospective clients of Guernsey offshore banking are typically after private banking, wealth management, financing, and investment management.

For this reason, if you’re looking for personal banking or day-to-day business banking, your options in Guernsey will be limited — though there are some options if you choose carefully.

Alternatively, you may want to consider banking in the Isle of Man or Jersey instead. Both islands offer similar benefits to Guernsey but are better suited to the offshore banking requirements of non-resident individuals.

You can read more about banking in the Isle of Man and Jersey here:

Guernsey Offshore Banking Services

Guernsey offshore banking focuses on the needs of wealthy individuals, institutional investors, and wealth management entities. With this in mind, the types of services you should be seeking in Guernsey include private banking, wealth management, custody, and other related services. We’ll discuss each of these in detail below.

Private Banking in Guernsey

Today, private banking is a loaded term that can cover a range of services, many of which vary widely from bank to bank and country to country.

Generally speaking, in the context of Guernsey, we’re referring to traditional private banking services provided to high net worth (HNWI) and ultra-high net worth individuals (UHNWI), and their wealth planning vehicles.

Such services include a range of banking services, lending, and more. Of course, this also includes being able to access wealth management as well as investment products and services, which we discuss below.

Trust & Fiduciary Services in Guernsey

Guernsey is best known for trusts. And, this little island is widely considered a leading and reputable jurisdiction for the structuring and administration of trusts.

In fact, Guernsey was one of the first countries to regulate fiduciary trust services. And while modern trust laws were adopted in the 1960s and 1970s, Guernsey trusts date back hundreds of years. Today, it’s reported that there are over 20,000 trusts in Guernsey — though no registry exists.

Not surprisingly, many of the international banks that operate in the Guernsey offshore banking sector specialize in the administration of such trusts. This allows clients to unlock the benefits of estate and succession planning, asset protection, tax neutrality, and much more.

Custodian Services in Guernsey

Finally, custodian services are available from many banks in Guernsey. However, these services almost exclusively cater to the needs of institutional, financial, and corporate clients. Such services include the settlement of accounts, reporting requirements, dividend services, and more.

Non-Resident & Expat Banking in Guernsey

In some instances, it’s possible to access certain non-resident and expat banking services. These services range from international bank accounts to international mortgages to acquire properties in the UK. However, bank selection is critical as very few options exist. So, make sure to scrutinize the services your chosen banks offer (along with the related fees), before opening an account.

Challenges of Guernsey Offshore Banking

Guernsey Offshore Banking Challenges
Like all offshore financial centers, banks in Guernsey each have their own client preferences, areas of specialization, and different requirements for account opening. In Guernsey, this includes an emphasis on deposit requirements.

In fact, even though there are a few brand name international banks active on the island, your chances of opening accounts without knowing which banks cater to your client profile, your investment needs, and actually want you as a client are extremely low.

For instance, banks specializing in private banking and wealth management want to know where you fall in their wealth brackets. They also want to understand which specific services you intend to use. In other words, they want to know how profitable you’ll be as a client for the relationship manager and the bank.

Of course, banks in Guernsey have other non-financial considerations as well. Certain banks only accept clients from a small number of countries. Other banks may require specific ties to certain regions or jurisdictions.

Here’s an overview of the challenges applicants face when looking to access Guernsey offshore banking:

  • Finding banks that accept their client profile
  • Finding banks that offer their required services
  • Having sufficient ties to required jurisdictions
  • High deposit and investment requirements for certain banks and client types

Unlocking the benefits of Guernsey offshore banking doesn’t have to be difficult. As long as you have the right information, account opening strategies, approach the right banks and have the right banking contacts. Of course, there are other banking jurisdictions offering similar benefits that could be significantly easier (and more beneficial) for you to access as well.

Ready to Unlock Guernsey Offshore Banking?

Whether you want to unlock Guernsey offshore banking or explore other banking options available to you, we can help.

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