The Bailiwick of Guernsey comprises Guernsey (at 25 sq. miles, the second largest Channel Island), Alderney, Sark, Brecqhou, Herm, Jethou and Lihou and lies in the Gulf of St Malo, about 75 miles from the southern coast of England and 30 miles from the northern coast of France. The Bailiwick has a population of just over 60,000 people. Over the years Guernsey has developed a reputation as an extremely well regulated, reputable and significant financial centre having a skilled English speaking work force and operating in the same time zone as the UK.
Constitutionally, Guernsey is a self governing Crown Dependency having its own legislative assembly (the States of Deliberation) and owing allegiance to the Crown in its capacity as the Duke of Normandy. Historically the island was part of the Duchy of Normandy and became part of England in 1066 after the Battle of Hastings. In 1204 when Richard 1 lost his French possessions the Channel Islands remained loyal to the English Crown and, for that loyalty, were rewarded with effective self governance. The Crown appoints a Lt. Governor to represent its interests. The UK Government has nominal responsibility for the island”s defence and international relations.
With its historical ties to Normandy, Norman law has been the background to much of the island”s legislation until recent years although from a business perspective the law is significantly affected by English common law. The Royal Courts of Guernsey, presided over by the Bailiff (appointed by the Crown) adjudicate on any matters under Guernsey law.
Guernsey is not a member of the European Union but has associate status. Many of the directives issued by the EU are extended to have effect in Guernsey.
Being self governing Guernsey has created its own tax system and imposes a flat rate of income tax on its residents but not non-residents. To date, Guernsey has avoided the imposition of Capital Gains tax, Inheritance Tax and Value Added Tax.
The low tax regime, coupled with the islands political stability and stable economy, has enabled the island to become a successful financial centre enabling non-residents to hold and protect their international assets in structures administered in Guernsey.