Ten Day Fast Track Regime Boosts Guernsey's Appeal to Migrating

Global Legal and Professional Services

Ten day fast track regime boosts Guernsey's 1 September 2020 appeal to migrating Fund Managers

Walkers’ Global Investment Funds Group offers Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Irish and Jersey law advice on investment funds on a global basis and is one of the largest specialist International Financial Centre funds teams worldwide.

Earlier this year Walkers partner Kate Storey, on behalf of the Guernsey Investment & Funds Association, worked with the Guernsey Financial Services Commission to introduce a fast track licensing regime for investment managers of overseas (non-Guernsey) funds. The new fast track regime, which launched in June, enables an overseas fund manager to obtain the Guernsey regulator's approval to migrate to Guernsey and the necessary Guernsey investment business licence within a 10 business day period. Alternatively, a newly incorporated Guernsey manager can be established and licensed within 10 business days under the regime.

The fast-tracking applies for either a general partner of a non-Guernsey limited partnership, or a standalone manager wishing to move domicile to Guernsey, and applies to managers of open-ended or closed-ended schemes established outside Guernsey.

When the manco migrates to Guernsey all of its assets and liabilities automatically continue with the Guernsey company by operation of Guernsey law.

This development has arisen after Guernsey has seen a significant number of new enquiries over the past 18 months about establishing managers of overseas funds in Guernsey, whether through migrating existing overseas fund managers or establishing new Guernsey fund managers for overseas funds – the new licensing regime caters for both scenarios. Much of this interest in Guernsey is investor led.

A complementary new regime for migrating non-Guernsey limited partnerships to Guernsey has also been introduced this year.

Fund managers are being attracted to Guernsey due to its strong legal, technical and professional services infrastructure with a wide choice of quality fund administration firms and locally based directors, and its EU and OECD "white listed" tax transparency and fair taxation standards. In 2018 Guernsey introduced legislation to meet EU requirements on economic substance which require that fund managers carry out their core income generating activities in their jurisdiction of tax residence. Guernsey's pre-existing financial services infrastructure and regulatory framework meant that fund managers established here were readily able to meet the EU requirements when they were implemented.

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Guernsey's strong substance and tax standards compliance is combined with robust yet proportionate regulation of fund managers by the Guernsey regulator and Guernsey's longstanding pedigree and reputation as a world leading jurisdiction in private equity.

Fund administrators and auditors in Guernsey have long experience of working with overseas non-Guernsey funds. Non-Guernsey schemes for which some aspect of management, administration or custody is carried out in Guernsey, had a net asset value of £40.7 billion at the end of 2019, and this is a growth area.

This new fast tracking regime for managers of overseas funds adds to the existing fast track licensing processes in Guernsey for Guernsey managers of Guernsey funds (also 10 business days), and the fast track registration of Guernsey funds within 3 business days for registered funds, and 1 business day for private investment funds (PIFs) and the PIF Manager.

Kate Storey and Matt Sanders head up the Walkers funds team in Guernsey, which according to the Monterey Guernsey Fund Report 2019 doubled its share of the Guernsey funds market over the last year. The team advises on every stage of the fund's life-cycle, supported by dedicated specialists in M&A and restructuring, regulatory law, fund financing, fintech and disputes. With ten offices globally in key fund jurisdictions, Walkers offers an international perspective and a strong bench of experienced Guernsey lawyers who work with leading managers, investors and administrators.

Contacts For further information please contact

Kate Storey Matt Sanders Partner - Guernsey Group Partner - Guernsey T. +44 (0) 1481 748 924 T. +44 (0) 1481 748 914 M. +44 (0) 7781 174 829 M. +44 (0) 7781 138 037

E. [email protected] E. [email protected]

Disclaimer The information contained in this advisory is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.