Guernsey is one of the Channel Islands in the English Channel near the French coast, and is a self-governing British Crown dependency. It is well-known for its Financial Sector and Tax Friendly regulatory system. In this webinar, we shall look at the overview of tax and regulatory system in Guernsey. In particular, we shall understand the benefits for Fund Management activities. We shall also look at relevant statistics relating to economy and demography of the Country.

1. Guernsey: A Perspective for Offshore
Investment and Fund Management
CA Divakar Vijayasarathy

2. Credits and Acknowledgments
V Thirumal
CA Jugal Gala

3. Legends used in the Presentation
CICRA Channel Islands Competition & Regulatory Authorities
CIV Collective Investment Vehicles
DTA Double Taxation Arrangements
FATF Financial Action Task Force
GDP Gross Domestic Product
GFSC Guernsey Financial Services Commission
IOSCO International Organisation of Securities Commissions
OECD Organisation for Economic Cooperation and Development
RPI Retail Inflation Index
TIEA Tax Information Exchange Agreements

4. Presentation Schema
Guernsey Advantages Finance Sector Regulator
Offshore
Investment and
Fund
Management
Background Present Situation Taxation
Tax for
Corporates
Exemption for
Offshore Funds
Eligibility
Conditions for
Exemption
Withholding Tax
Anti Avoidance
Rules
International Co-
operation and
Involvement
Statistics

5. Guernsey
As a result, Guernsey has its own legislature which allows it to determine its own local laws,
including taxation
As a British Crown Dependency, Guernsey celebrated 800 years of independence in 2004
which means the island’s links to the UK are through the Crown rather than Parliament
Guernsey is located in the Gulf of St Malo, 120 kilometers south of the United
Kingdom(“UK”) and about 50 kilometers west of France
The Bailiwick of Guernsey is a group of islands (called Guernsey, Alderney, Sark, Herm,
Jethou, Brecqhou and Lihou) within the Channel Islands

6. Advantages
Guernsey has developed and continues to evolve as a thriving reputable international
business centre through its willingness to explore and expand on ideas
Competitive Stability Quality
• Low tax regime which is compliant
with international standards
• World class professional services with
a global network
• Proportionate and responsive
regulation which is internationally
recognised
• An agile pro-business government
• Frequent connections to London hubs
• AA-* credit rating by Standard
and Poor’s
• Part of the sterling zone (pound
sterling currency)
• Mature legal system
• Trusted location for securing
storage and processing of data
• Accessible government advice
and services
• Resilient and highly secure data
connectivity
• Excellent professional services,
including a 24/7 company
registry
• Skilled workforce across a
diversified economy
* obligator's capacity to meet its financial commitments on the obligation is very strong

7. Finance Sector
Guernsey has been an international finance centre for more than 50 years and there are five core pillars to its finance industry:
Banking
Insurance
Investment
management
Trust & Company
Investment funds
30 international banks are available to meet financing needs of individuals and businesses
• Guernsey’s insurance industry is renowned for its expertise and innovation in providing risk management
solutions
• Guernsey is the largest captive insurance domicile in Europe and an emerging centre for reinsurance business
Guernsey boasts a broad spectrum of investment management providers, varying from subsidiaries of
international investment houses to independent boutiques
• Guernsey domiciled funds are used for cross-border distribution into all corners of the globe
• Guernsey is also home to more non-UK entities listing on the London Stock Exchange than any other
jurisdiction globally
Guernsey provides individuals and their families with legally robust and tax efficient structures for
purposes of asset management, succession and tax planning

8. Regulator
The Guernsey Financial Services Commission is the regulatory body for the finance industry in
the Bailiwick of Guernsey.
It seeks to secure good regulatory outcomes with integrity, proportionality and
professional excellence, thereby generating confidence for the jurisdiction
It is independent public body funded entirely by the licensees with their Fees
The Guernsey Financial Services Commission, while robust, has a reputation for its flexible,
pragmatic and open-door approach
• The Commission supervises and regulates over 2,000 licensees from within the
banking, fiduciary, insurance and investment sectors
• In accordance with standards set by international bodies such as:
o Basel Committee for Banking Supervisors,
o International Association of Insurance Supervisors, the International
Organisation of Securities Commissions (IOSCO) and
o Financial Action Task Force (FATF) on Money Laundering

9. Offshore Investment and Fund Management

10. Background
This led to Guernsey soon becoming a world leader among financial centres for the private equity funds market, and home to
the leading private equity fund administrators
As Guernsey attracted more and more private equity funds, a body of experience and expertise accumulated across the island
Regulated by the Guernsey Financial Services Commission (GFSC), the island adopted a more open and pragmatic approach to
these types of products
Initially attracting the smaller closed ended fund market in the ‘80s and ‘90s, Guernsey began administering private equity
funds, which at that time were considered to be in an alternative and start-up category
It experienced massive expansion following the suspension and subsequent abolition of exchange controls in 1979, and over
the following 40 years, evolved to become one of the world’s largest offshore finance centres, with a thriving funds industry
Since the 1960s, Guernsey had a funds business community

11. Present Situation
Currently, almost 1,000 investment funds and well over 2,000 sub-funds are administered in the island. The current
value of funds under management and administration in Guernsey is £286.1 Billion
Growth has been rapid, and the island has been able to maintain its impressive ability to adapt rapidly to changes
in legislation and international best practice
Guernsey is keen to build upon its high quality hedge fund business, and the conditions are right for fund
managers to flourish
Guernsey projects itself as a centre of excellence for the funds sector
The island’s safety as well as its political and economic stability has encouraged a number of high profile players
to establish a physical presence within the island, managing and administering their products in Guernsey
The island’s excellent work/life balance is a great magnet for former city dwellers who appreciate being able to
regain time and enjoy the island’s great quality of life
A low tax jurisdiction with a pragmatic and innovative regulator, skilled workforce and high-quality professional
services community provides Guernsey with all the key elements for long-term hedge fund success

12. Taxation

13. Tax for Corporates
While Individuals pay tax at 20%, there are three rates for companies,
depending upon the source of income:
Company Standard Rate 0%
Company Intermediate Rate (for
below mentioned sources)
10%
• Banking business
• Domestic insurance business
• Fiduciary business
• Insurance intermediary business
• Insurance manager business
• Fund administration business
• Custody services by banks
• Investment manager services (except those provided to collective investment vehicles)
• Operating an investment exchange
• Income from compliance and other related activities provided to regulated financial
services businesses
Sources of income
Guernsey levies no capital gains, inheritance, capital transfer, value added or general withholding taxes

14. Contd.
Company Higher Rate (for
below mentioned sources) 20%
• Trading activities regulated by the Channel Islands Competition & Regulatory
Authorities (CICRA)
• Income from the ownership of lands and buildings
• Importation and/or supply of hydrocarbon oil or gas in Guernsey
• Large retail business carried on in Guernsey where the company has a taxable
profit of more than £500,000
Sources of income
Collective investment vehicles (Offshore Funds) may apply for exempt status in Guernsey (as explained in subsequent slide)

15. Exemption for Offshore Funds
Exempt bodies (as mentioned above)may
also invest on a tax free basis in:
A relevant Guernsey bank deposit
Another body to which an exemption from
tax has been granted;
Shares in a Guernsey company
Investment fund vehicles (companies, partnerships, unit trusts) may apply for
exemption from tax in respect of income from sources outside Guernsey.
The exemption fee is a flat annual fee of £1,200
Tax free basis shall mean that the income from these investments shall not be taxable in the hands of investment fund vehicle

16. Eligibility The following entities can apply for exemption:
Any Collective investment vehicles ("CIV") established in or outside Guernsey – CIV is a body(company, partnership
or unit trust) established to enable members of the public to participate in, or receive profits or income arising from,
the acquisition, holding, management or disposal of the property/assets, or sums paid out of such profits or income
(the fund management activity shall be in Guernsey)
A body established in Guernsey or elsewhere solely for the purposes of:
the management of a specific CIV mentioned above,
enabling investment into a specific CIV mentioned above,
the acquisition or the management of the assets of a specific CIV mentioned above,
facilitating the funding of, or borrowing by, a specific CIV mentioned above, for the acquisition of its assets
A body established for the purposes of undertaking collective investment in which the units are
listed on an exchange or market approved by the Director of the Revenue Service
• A company which is in the beneficial ownership (or which is a wholly owned subsidiary) of
an exempt body may itself apply for exempt status
• However, such a company would only be eligible for exemption to the extent that it does
not have income taxable at the company intermediate rate or company higher rate

17. Conditions for Exemption
- Person(s) resident in Guernsey, regulated by the Guernsey Financial Services Commission, provides
support services (e.g. managerial, secretarial and custodial services) to the exempt body
- Remuneration for the services calculated on an arm's length basis.
No investment or other property situated in Guernsey is held other than investments specified earlier
Majority of shares/units are not held in the beneficial ownership of Guernsey residents
On making payment of a dividend or distribution, the unit trust/company provides a list of the names,
addresses and gross amounts of any income distributions paid to Guernsey investors

18. Withholding Tax
Guernsey does not levy any withholding tax on interest, royalties or service fees
Dividends paid by Guernsey companies to non-residents are also free from withholding tax
Guernsey companies paying dividends to Guernsey resident individuals must deduct
withholding tax of 20%, although lower rates can apply to the extent that the income from
which the dividend is paid is taxed at the 10% or 20% rates
If the company has exempt status, it is not required to deduct withholding tax from dividends
paid to Guernsey resident individuals, although it is required to report the dividend to the
Director of the Revenue Service.

19. Anti Avoidance Rules
Guernsey does not have specific anti-avoidance rules such as transfer pricing, thin capitalisation or controlled
foreign company rules
However, Guernsey has a broad general anti-avoidance provision which targets transactions where the effect of
the transaction or series of transactions is the avoidance, reduction or deferral of a tax liability
The Director of the Revenue Service in Guernsey can make such adjustments to the tax liability to counteract the
effects of any perceived avoidance, reduction or deferral of the tax liability

20. International Co-operation and Involvement
Guernsey continues to lead on tax transparency and meeting global standards through intergovernmental information
exchange agreements which help to further enhance its reputation as a responsible and transparent financial centre
Guernsey is compliant or largely compliant with 48/49 of the Financial Action Task Force (FATF) recommendations
(which relates to prevention of money laundering)
OECD endorsement - Member of the OECD’s ‘whitelist’ (commitment to implement transparency and effective
exchange of information for tax purposes)
Guernsey is party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Guernsey has signed 60 tax information exchange agreements (TIEAs) to date
Guernsey has signed 13 full double taxation arrangements (DTAs) and 12 partial DTAs to date

21. Statistics

22. Population
Year Births Deaths Natural
increase Immigration Emigration Net
migration
Natural
increase
and net
migration
Net
admin
changes
Total
population
at end
2015 588 527 61 3,734 3,796 -62 -1 -22 62,046
2016 594 579 15 3,647 3,793 -146 -131 -7 61,908
2017 539 603 -64 3,644 3,442 202 138 0 62,046
2018 495 543 -48 3,659 3,151 508 460 0 62,506

23. GDP
Year GDP (£ millions, constant prices) Annual % change in constant GDP
2009 2,982 -
2010 2,876 -3.60
2011 3,025 5.20
2012 2,914 -3.70
2013 2,946 1.10
2014 2,980 1.20
2015 2,986 0.20
2016E 3,076 3.00
2017E 3,218 4.60
2018E 3,272 1.70

24. GDP Per Capita
Year
GDP per capita
(£s, constant prices)
Annual % change in constant
GDP per capita
2009 48,005 -
2010 46,174 -3.80
2011 48,188 4.40
2012 46,300 -3.90
2013 47,067 1.70
2014 47,804 1.60
2015 47,981 0.40
2016E 49,452 3.10
2017E 51,862 4.90
2018E 52,531 1.30

25. Sectoral Contribution to GDP
41.16%
10.96%8.65%
8.21%
8.09%
3.87%
3.56%
15.49%
Finance
Professional, business, scientific and
technical activities
Public administration and trading bodies
Households
Wholesale, retail and repairs
Administrative and support service
activities
Construction
Others
2018E

26. Earnings by Economic Sector
Median
earnings (£)
Lower quartile
earnings (£)
Upper quartile
Earnings (£)
Agriculture, horticulture, fishing and quarrying 28,966 20,508 39,219
Manufacturing 27,874 20,132 36,129
Electricity, gas, steam and air conditioning supply 38,795 31,209 54,234
Water supply, sewerage, waste management and remediation activities 32,502 25,801 39,492
Construction 33,642 25,734 41,278
Wholesale, retail and repairs 23,344 16,711 32,405
Hostelry 20,774 17,261 25,921
Transport and storage 31,220 22,443 41,118
Information and communication 39,220 26,792 60,074
Finance 46,427 31,358 70,465
Real estate activities 36,083 24,416 56,481
Professional, business, scientific andtechnical activities 43,103 29,367 66,755
Administrative and support service activities 30,023 20,321 41,743
Public administration 36,229 25,397 49,525
Education 27,468 19,421 47,919
Human health, social and charitable work activities 24,724 17,509 34,589
Arts, entertainment and recreation 24,502 17,664 35,793
Other service activities 20,049 15,033 27,270
Activities of households as employers 21,753 14,930 28,754
Four Quarter Average Earnings of Employees as at 30th June 2019
Contribution from finance sector being the highest

27. Employment
Sector %
Agriculture, horticulture, fishing and quarrying 1.30
Manufacturing 2.00
Electricity, gas, steam and air conditioning supply 0.90
Water supply, sewerage, waste management and remediation activities 0.40
Construction 8.40
Wholesale, retail and repairs 12.10
Hostelry 6.60
Transport and storage 3.70
Information and communication 2.40
Finance 19.20
Real estate activities 0.80
Professional, business, scientific and technical activities 8.70
Administrative and support service activities 5.30
Public administration 17.00
Education 1.90
Human health, social and charitable work activities 6.30
Arts, entertainment and recreation 1.20
Other service activities 1.50
Activities of households as employers 0.20
Employment by economic sector at 30th June 2019
Finance
Sector %
Banking 29.5
Fiduciary 28.3
Funds 21.1
Insurance 12.4
Other 8.7
Total 100.0
Finance sector generates highest
employment amongst all the
sectors

28. Total Funds under Management
Total Funds under Management (£ Billion)
Guernsey Open-ended Schemes 48.2
Guernsey Closed-ended Schemes 180.2
Non-Guernsey Schemes* 57.7
Total 286.1
* Non-Guernsey schemes, for which few aspects of management, administration or custody is carried out in Guernsey

29. Geographic Breakdown of Investments
Investments by Open
Ended Schemes
As at Dec 2018

30. Geographic Breakdown of Investments
Investments by Close
Ended Schemes
As at Dec 2018

31. Geographic Breakdown of Investments
Investments
by Non-
Guernsey
Schemes
As at Dec 2018

32. Thank You
DVS Advisors LLP
India-Singapore-London-Dubai-Malaysia-Africa
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