Guernsey Launches Consultation On Introducing LLCs
Jason Gorringe, Tax-News.com, London
09 September, 2019
Guernsey is proposing to adopt limited liability companies (LLC), in a move intended to enhance the island's competitive position in the United States.
Guernsey adopted limited liability partnerships in 2013. It is expected that LLCs – tax transparent by default – would be treated as partnerships for the purpose of taxation in Guernsey, but could decide at the point of establishment to be taxed as a company.
LLCs are commonly used in the US as structures for trading businesses, holding vehicles, and special purpose vehicles. LLCs offer a flexible hybrid structure for any lawful business purpose or activity, offering legal personality and limited liability in a tax-transparent structure.
Launching the consultation, the Government said there has been commercial interest in Guernsey in introducing LLC legislation.
Dominic Wheatley, Chief Executive of promotional agency Guernsey Finance, said: "This move will be positive in developing Guernsey's flows of funds business from the US, which is increasingly a target market for the Guernsey funds industry. The island's expertise in private placement helps managers to access investment on both sides of the Atlantic, and this move will provide further opportunity for cross-border structuring."
Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance, added: "The development of LLCs is one priority in the development of new product for Guernsey, which we set out in our policy framework for financial services last year."