Knowledge

This briefing provides an overview of the various regulatory frameworks in place that work towards making Guernsey an economically secure and internationally recognised jurisdiction, including its tax, regulatory and data protection regimes.

Tax regime

The tax regime in Guernsey is separate from that of the United Kingdom. The States of Guernsey, the island's elected representative body, sets out the island's own legislation and policy and the island is self-funded.

Tax rates in Guernsey have historically been low. Standard corporation tax in Guernsey is 0%, although all companies must file an annual tax return. A rate of 10% may be applicable to businesses conducting certain regulated activities, including some banking, fund administration and insurance business, and a rate of 20% applies to certain businesses, such as telecommunications, gas supply and large retail businesses. Tax exempt status is available for investment funds and other regulated companies.

Importantly, there are no capital gains, value-added or sales taxes or any stamp duty.

The island has taken steps to ensure that these relatively low tax rates do not conflict with international tax standards. Guernsey is 'whitelisted' for tax purposes by both the Organisation for Economic Co-operation and Development (OECD) and the European Union (the "EU"), whilst also maintaining domestic measures to prevent tax avoidance.

Tax reporting

From an international perspective, Guernsey adheres to the US Foreign Account Tax Compliance Act ("FATCA") as well as the Common Reporting Standard ("CRS"), demonstrating its commitment to global tax transparency initiatives and the prevention of cross-border tax evasion. 

Under FATCA and CRS, financial institutions in Guernsey (including banks, investment funds and trust companies), must meet reporting and due diligence requirements where an entity is controlled by a US citizen or resident, or any other resident of a CRS-compliant jurisdiction. Reporting must be completed annually, and the information is then exchanged with the Internal Revenue Service in the US or the relevant body in CRS countries.

The island has also signed Tax Information Exchange Agreements with 61 jurisdictions to facilitate the exchange of relevant information between tax authorities. A full list of the states that Guernsey has TIEAs with – including the UK, the US, Switzerland and Ireland – can be found here.

Economic substance

Guernsey introduced the Income Tax (Substance Requirements) (Implementation) Regulations, 2018 (as amended and consolidated in the Income Tax (Substance Requirements) (Implementation) Regulations, 2021) (the "Substance Regulations") in order to ensure cooperation with international standards.

The Substance Regulations apply to all companies (and other undertakings), anywhere in the world, which are tax resident in Guernsey and which carry on any 'relevant activities' (including banking, insurance and fund management business), requiring them to demonstrate that they have sufficient 'economic substance' in Guernsey. The Substance Regulations impose certain obligations on these undertakings, such as demonstrating adequate employees, expenditure and physical assets in Guernsey.  

For more information on economic substance, please see our detailed briefing on Economic substance rules in the Channel Islands.

Financial crime regulation

With a financial services sector dating back decades, Guernsey has a well-established, and continually evolving, structure in place to ensure the highest standards of regulation. Thus, those making use of Guernsey entities can be confident that they are based in a respected and well-regulated jurisdiction.

The Guernsey Financial Services Commission (the "GFSC") is the regulator for financial services in Guernsey and has a long history of ensuring that the island's regulatory regime operates to the highest international standards. The GFSC is committed to maintaining Guernsey's position as a leading international finance centre, delivering balanced, progressive, risk-based financial regulation.

The Guernsey Financial Intelligence Unit (the "FIU") is an operationally-independent organisation, and is responsible for analysing and reporting on financial intelligence. The FIU plays a key role in contributing to the island's robust regulatory systems, so that risks are properly identified and mitigated.

Beneficial ownership

Since 2017, the island has operated a centralised and non-public register of beneficial ownership of Guernsey legal persons, under the Beneficial Ownership of Legal Persons (Guernsey) Law, 2017. Beneficial ownership information must be provided on all companies, foundations, incorporated limited partnerships and limited liability partnerships. The Guernsey Registry maintains a non-public register with information on beneficial owners. The information contained can only be accessed by specified individuals from the GFSC, the FIU and the Guernsey Registry so they can discharge their statutory duties. This system enables the island to ensure that it remains compliant with international standards. 

Anti-money laundering

In February 2025, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism ("MONEYVAL") published their mutual evaluation report on Guernsey following a review of the island's anti-money laundering and financial crime prevention measures. MONEYVAL's report found that the island was compliant or largely compliant with all 40 of the recommendations set out by the Financial Action Task Force (FATF).

Data protection

Guernsey, whilst not part of the EU and directly subject to the European General Data Protection Regulation ("GDPR"), has introduced many of the principles of GDPR through the Data Protection (Bailiwick of Guernsey) Law, 2017, which ensures that similar high standards are met for the safety and protection of data. This has led to adequacy decisions from both the UK and the EC, which confirmed that Guernsey's data protection and privacy standards were sufficient to safeguard UK and EU personal data, enabling the transfer of personal data without the need for further safeguards or specific authorisation.

Conclusion

As a jurisdiction, Guernsey demonstrates a truly global outlook. The island consistently keeps pace with evolving international standards, ensuring that they are implemented to the highest level.

Accordingly, Guernsey is a highly attractive and stable jurisdiction for fund, corporate and trust administration and this overview has touched on just some of the reasons why.

If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.