Guernsey Banking License

Guernsey Banking License The Guernsey Financial Services Commission (GFSC) expects new banks entering the Guernsey market to be reputable, of good standing and with an established track record in banking. Any bank wishing to establish a presence in Guernsey must make an application under the Banking Supervision (Bailiwick of Guernsey) Law, 1994, as amended (Banking Law).   Key Features Application for registration must be made to the GFSC. The GFSC has the discretion to refuse and revoke licences and to attach conditions to registration. When considering whether to grant an application for a banking licence the GFSC must be satisfied that the applicant, and any person who is or is to be a director, controller or manager of the applicant, meets the minimum criteria for licensing. The criteria include:

• the applicant must be an institution;
• the business of the applicant is/will be carried on with prudence, professional skill and integrity appropriate to the nature and scale of its activities and in a manner which will not bring the Bailiwick of Guernsey into disrepute as an international finance centre;
• the Bailiwick of Guernsey is deriving/will derive economic benefit from the applicant’s operation to an extent acceptable to the GFSC;
• every person who is or is to be a director, controller or manager of the applicant is a fit and proper person to hold that position. In determining this, the GFSC will consider, amongst other things:
• his probity, competence, experience and soundness of judgment for filling that position;
• the diligence with which he is fulfilling or likely to fulfil those responsibilities; and
• his knowledge and understanding of the legal and professional obligations to be assumed or undertaken;
• at least two individuals resident in the Bailiwick and of appropriate standing and experience shall effectively direct the business of the applicant; and
• the applicant is/will conduct its business in a prudent manner.

As a rough guide, an applicant should have at least £1 million of assets although, as the GFSC requires Guernsey banks to maintain a minimum risk asset ratio of 8%, many banks have higher minimum risk asset requirements. Banks are required to maintain a minimum Common Equity Tier 1 (“CET1”) capital ratio of 8.5% (comprising a 6% requirement plus a 2.5% Capital Conservation Buffer) for Pillar 1. Pillar 2 capital should be comprised of at least 75% CET1.   Legal Requirements

Requirements	Description
General
Corporate  vehicle permitted	Guernsey company
Local physical office required	No
Share capital or equivalent
Minimum paid-up capital	USD 1,000,000
Directors
Minimum number	2
Corporate directorship allowed	Yes
Local director required	No
Shareholders
Minimum number	2
Corporate shareholders allowed	Yes
Local  shareholders required	No
Service Providers Required
Company Secretary	Yes

  Tax Treatment There is no capital, value added or inheritance taxes in Guernsey, nor any stamp or document duties except in respect of Guernsey real property. With the exception of certain businesses, companies (including funds) now pay a standard rate of 0% income tax on profits. Funds still have the option to apply for exempt company status (on payment of an annual fee of £600).   Duration to Set Up 3 months   Distinctive Benefits of Licence

• Robust yet flexible regulatory environment
• Professional infrastructure and quality of workplace
• Tax neutrality and Tax Exchange Agreements

  The Valsen Advantage

• End to end comprehensive service
• Speedy and efficient service
• Expert advice on structuring options
• Dedicated ongoing compliance support
• Extensive network pool of service providers