Guernsey: Solid Foundations Or Castles In The Sand… A Review Of The Foundations Laws Of Guernsey And Jersey - Similarities, Differences And Practical Applications

Last Updated: 4 December 2012
Article by Mason Birbeck and Angela Calnan

Jersey's foundations law came into force in 2009. It gave birth to a new Jersey legal entity, this creature of statute being the Jersey foundation. Guernsey is now following suit. Its foundations law is expected within the next six months.

What has the experience been in Jersey, and what can be expected for Guernsey? The foundation is an entity with long-standing roots in civil law jurisdictions, so is it a useful construct in these now, essentially, common law jurisdictions or simply castles in the sand?

The Jersey experience

Why did Jersey feel the need to re-invent the foundation for its own use?

The spread of global wealth brought with it the perception that Jersey's finance industry needed to adapt to attract clients from increasingly diverse markets, and that adding the foundation to Jersey's offering of wealth management vehicles could help attract clients from emerging markets, such as those in the Middle East and Far East. Certain of Jersey's competitor jurisdictions were similarly motivated and looking to either introduce or remodel existing foundations laws, which probably catalysed Jersey to push on with adoption of its own.

It is probably fair to say that the take up of Jersey foundations has fallen short of expectations at the time the enabling legislation came into force.

The Jersey foundation emerged on the scene at a time of turmoil for the finance industry worldwide. Reluctance to create new wealth planning structures has been a consequence of enduring economic uncertainty. Its introduction also came when certain civil law offshore jurisdictions were enduring heavy criticism from the OECD. However, the exodus of foundations migrating from those jurisdictions to Jersey that some had predicted never materialised.

Foundations are relatively new to many intermediaries who source business to Jersey, so there remains a learning curve element. There is also some uncertainty as to the taxation treatment of Jersey foundations in the UK and other nations for which tax efficiency is often a critical structuring criterion. These are not aspects that affect more tried and tested Jersey trust and corporate vehicles.

It is unlikely Guernsey will be immune to the above factors, but it may benefit from Jersey's groundwork in promoting a Channel Islands-based foundation.

Jersey and Guernsey compared


Jersey and Guernsey foundations are conceptually very similar. A founder (who establishes the foundation) and council (responsible for its decision-making) are functionaries of both.

A foundation in either jurisdiction will have the same fundamental elements. It will have separate legal personality and can own assets and operate in its own name. It can be established for any legal objects, including to benefit persons or carry out specified purposes (or both). It is formed by registration with the relevant island's registrar (however, registration does not compromise confidentiality because very little information is disclosed on the public records). It can do anything lawful, and certain limited restrictions on a foundation's ability to carry on commercial activities itself can be addressed through a subsidiary vehicle.

Having regard to those similarities, it seems likely Guernsey foundations will share similar uses to those of its Jersey counterparts. However, there are some important distinctions.

Important differences....

Both Jersey and Guernsey require a registered office be maintained in the island and, therefore, a locally based person with which the foundation has a connection. However, their requirements for involvement of persons regulated by the financial services authorities are slightly different.

The council of a Jersey foundation must have at least one "qualified member", whereas if a Guernsey licensed fiduciary is not appointed to the council or acting as guardian, one must be appointed as its "resident agent".

The registered agent must be a Guernsey based licensed fiduciary. It will have power to request copies of the foundation's records and any other documents or information necessary for it to comply with its duties as a licensed fiduciary. This appears to be more of a policing function as compared to the Jersey model which requires the regulated person to have a management function.

Beneficiary status

Another difference between the Guernsey and Jersey regimes is beneficiary status.

Guernsey law draws a distinction between "enfranchised beneficiaries" (those with a right to receive certain information about the foundation), and "disenfranchised beneficiaries" (those that have no such right to information). In contrast, Jersey law provides that, unless stated in the foundation's constitutional documents, a beneficiary does not have a right to receive any information about the foundation.

The Guardian

A Jersey foundation must have a guardian, whose role is, essentially, to ensure the council carries out its functions. A Guernsey foundation, however, only requires a guardian where there is a purpose in respect of which there are no beneficiaries, or there are "disenfranchised beneficiaries". As such, the guardian in the Guernsey context is more akin to the enforcer of a purpose trust.

A Guardian of a Jersey foundation owes no duties to its beneficiaries. In contrast, a guardian of a Guernsey foundation established with beneficiaries owes certain duties to those beneficiaries.

Reserved powers

Both Jersey and Guernsey foundations recognise the ability of the founder to retain powers in relation to the foundation. These are more limited in the case of Guernsey, so that the founder may only reserve powers for (i) himself and (ii) his lifetime (if the founder is a natural person) or up to fifty years after the establishment of the foundation (if the founder is a legal person). In the case of Jersey, the founder will have such powers in relation to the foundation and its assets as are provided in the charter and regulations, and such rights may be assigned to another person.


The variations in approach will have to be fully understood when considering whether to utilise a Jersey or Guernsey foundation. The hope is that they will be perceived as complementary, offering clients enhanced structuring flexibility across the islands and that, in time, the clear and innovative legislation developed in both Jersey and Guernsey will make the Channel Islands the foundation jurisdiction of choice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions