Guernsey Funds Boosted By OECD Membership
by Jason Gorringe, Lowtax.net, London
13 August, 2015
A clarifying statement agreed by the UK Treasury and the Ministry of Justice about Guernsey's position within the OECD bolsters the island's attractiveness as a fund domicile, according to Guernsey Finance, the promotional agency for the island's financial services industry.
Representatives of Guernsey's Government, the regulator, and industry bodies have been working together to inform EU and European Economic Area (EEA) authorities of Guernsey's position in the OECD. As a result, on June 23, 2015, the States of Guernsey (Guernsey's legislative assembly) issued this statement agreed with the UK authorities: "The OECD Convention was extended to Guernsey on July 20, 1990. This means that the OECD Convention applies to Guernsey and it is part of UK's membership of the OECD. OECD decisions and recommendations apply to the same extent to Guernsey as they do to the UK."
Whether or not a fund's domicile is in the OECD has become increasingly important to the investment funds sector. This is because of requirements from certain market regulators. For example, in some jurisdictions there are prohibitions on the marketing of funds that do not originate from an OECD country.
Guernsey is within the OECD but this fact has not always been apparent as Guernsey is included through the UK's membership of the OECD. This clarification helps reinforce Guernsey's position as an internationally compliant and reputable jurisdiction, and strengthens the attractiveness of Guernsey as a fund domicile, Guernsey Finance said.
Guernsey Finance Chief Executive Dominic Wheatley said: "The statement once again emphasizes our quality and standing in the international funds environment. Those working with or in Guernsey's funds industry have always known that Guernsey is within the OECD, but for those less familiar with the island that has not necessarily been the case. This statement removes any doubt about our position and reinforces the fact that Guernsey is a leading international finance center."
Guernsey Investment Fund Association (GIFA) Chairman Andrew Whittaker said: "As the OECD, G20, and European Commission continue to work on the implementation of tax transparency measures to tackle corporate tax avoidance, investment managers and investors are becoming increasingly concerned with the tax status of their funds' domiciles. The clarification of Guernsey's position in the OECD is good news for Guernsey."
Another GIFA spokesperson, Paul Wilkes, added: "This membership represents a great opportunity and advantage for Guernsey funds over some of its offshore rivals. The island's unique position as an offshore domicile with OECD membership provides comfort to our clients and their investors. This is another example of Guernsey's commitment to tax transparency and best international practice."
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