Guernsey: Guide To Public Offering Of Companies In Guernsey, Isle Of Man And Jersey

Last Updated: 21 March 2016
Article by Jeremy Berchem, Simon Harding and James Gaudin


If you are using an offshore company to list on the London Stock Exchange (LSE) or the Alternative Investment Market of the LSE (AIM), on most occasions, you will be using a company domiciled in one of the Crown Dependencies of Guernsey, the Isle of Man or Jersey. If you are using an offshore company to list on any other stock exchange or market, it is likely a company domiciled in one or more of the Crown Dependencies will already be listed there.

Appleby acts in conjunction with the lead advisers to companies proposing to list to ensure that all aspects of the listing undertaken in the relevant jurisdiction run smoothly including, but not limited to: advising on the most appropriate form of corporate vehicle, drafting or reviewing constitutional documents of the company; reviewing the prospectus to ensure legal and, where relevant, regulatory compliance; advising on corporate governance and directors' duties; and advising on local due diligence issues.


The main advantages for using any of these jurisdictions for public offerings are:

  • they are known to investors and the path to listing is straightforward;
  • fast incorporation of companies;
  • low rates of corporate tax;
  • no capital gains or stamp duty taxes;
  • shares may be held in uncertificated form through CREST/Euroclear;
  • flexible company laws based on and similar to English laws;
  • well-regulated offshore financial centres;
  • convenient time zones; and
  • all located within the British Isles but not part of the European Union.


3.1 Incorporation

In each jurisdiction, companies can be incorporated quickly either using a standard set of constitutional documents (which can be subsequently amended to incorporate the provisions necessary for listing) or bespoke constitutional documents compliant with the listing rules of the relevant exchange/market.

3.2 Public/Private Companies

There is no distinction between public and private companies in Guernsey.

There is no distinction between public and private companies under the Isle of Man Companies Act 2006 (2006 Act), and very little under the Companies Act 1931 (1931 Act). Companies incorporated under the 2006 Act or a public company incorporated under the 1931 Act may be listed.

In Jersey, a private company which circulates a prospectus relating to its securities or is a market traded company (within the meaning of the Companies (Jersey) Law 1991, as amended) shall be subject to the provisions of the law as though it were a public company.

3.3 Directors and Ownership

Details of the directors, the proposed activities of the company and its corporate group as well as the ultimate beneficial owners of the company will need to be provided to the appointed licensed corporate services provider in Guernsey and in the Isle of Man and the Jersey Financial Services Commission (JFSC) in Jersey.

There is no requirement for the directors to be resident in Guernsey, the Isle of Man or Jersey, save where an entity is regulated.

3.4 Registered Office

Every Guernsey, Isle of Man and Jersey company must have its registered office in Guernsey, the Isle of Man and Jersey respectively.

3.5 Migrations

A company which is incorporated outside Guernsey, the Isle of Man or Jersey may apply for authorisation to seek to be redomiciled into Guernsey, the Isle of Man or Jersey (as the case may be), if it is authorised to make such application by the laws of its home jurisdiction. A company incorporated in Guernsey, the Isle of Man or Jersey may apply for authorisation to seek continuance as a body incorporated under the laws of a foreign jurisdiction.

3.6 Mergers

Guernsey companies may merge with both Guernsey and non-Guernsey companies.

The Isle of Man 2006 Act contains express provisions for the merger of two or more companies. As long as one of the companies in the merger is a 2006 Act company, the other company or companies may be either a company incorporated under the 1931 Act or a 2006 Act company.

The 1931 Act allows for the merger of 1931 Act companies by means of a scheme of arrangement. A scheme of arrangement must be approved by a majority in number representing three-fourths in value of the members of each company which it is proposed to merge. The scheme of arrangement must be sanctioned by the Manx High Court before it becomes effective.

Jersey companies may merge with foreign companies, foreign incorporated bodies and also bodies that are incorporated in Jersey but are not companies, such as foundations (Jersey companies are already permitted to merge with other Jersey companies). All mergers will be subject to a merger agreement between the merging companies or bodies. The effect of the merger will be either a survivor body (one of the existing merging bodies, which absorbs the others) or a new body created by the merger, pursuant to the merger agreement.

4. TAX

4.1 Guernsey

Guernsey companies are subject to zero rate tax (save for those involved in certain industries within Guernsey). Companies incorporated in Guernsey may be considered tax resident in another jurisdiction where they are centrally managed and controlled in that other jurisdiction. Guernsey investment funds are eligible to be exempt from tax.

There is no inheritance tax, capital gains tax or goods and services tax in Guernsey.

4.2 Isle of Man

Isle of Man companies are liable to Manx income tax at a zero rate on their profits. Companies incorporated in the Isle of Man may be considered tax resident in another jurisdiction where they are centrally managed and controlled in that other jurisdiction.

There is no inheritance tax or capital gains tax in the Isle of Man.

4.3 Jersey

A standard zero rate of corporate tax now applies to companies being listed on a stock exchange. However, companies incorporated in Jersey may be considered exclusively tax resident in another jurisdiction where they are centrally managed and controlled outside Jersey, are tax resident in the jurisdiction of control and management, and where the rate of corporation tax in that jurisdiction is 20 per cent or higher.

There is no capital gains tax in Jersey nor is stamp duty payable on the authorised share capital or on the issue or transfer of shares (other than shares of a Jersey company owning Jersey real estate).


In each jurisdiction, subordinate legislation exists pursuant to which shares may be settled through the CREST system in the same manner as shares in UK established companies: Guernsey – the Uncertificated Securities (Enabling Provisions) (Guernsey) Law 2005; Isle of Man – the Uncertificated Securities Regulations 2006, as amended; and Jersey – the Companies (Uncertificated Securities) (Jersey) Order 1999.


6.1 Dividends and Distributions of Capital

Distributions, including dividends, made by a Guernsey company may be paid out of any source, including any capital account, provided the directors certify that the company passes a statutory solvency test (which requires both cashflow and balance sheet solvency).

A company incorporated in the Isle of Man under the 2006 Act may make distributions, including dividends, out of any source, including any capital account, provided the directors certify that the company passes the statutory solvency test. For companies incorporated under the 1931 Act there is a statutory definition of distributable profits. Accountancy advice should be sought to determine what profits are available for distribution, and dividends may not be paid out of capital or borrowed money.

Distributions (including dividends), for a par value Jersey company may be made out of any source including any capital account (apart from the capital redemption reserve or the nominal capital account) provided that the directors make the required solvency statement.

6.2 Redemption and Re-purchase of Shares

Guernsey has moved from a capital maintenance model to a solvency model. As such, a reduction of capital, to the extent a company has an authorised share capital, is permitted subject to the board certifying that the company passes a statutory solvency test. The solvency test is also a prerequisite to the redemption or re-purchase of shares which, upon a redemption or re-purchase, must be cancelled unless they are held as treasury shares. A limit of 10% also applies to the amount of shares that a company can hold at any time in treasury.

In the Isle of Man, there is a fundamental principle applicable to 1931 Act companies that they cannot generally reduce their share capital or effectively return capital to members, without complying with stringent statutory requirements.

The share capital of a 1931 Act company may be reduced in two ways, depending on whether the reduction is to un-issued or issued share capital:

  1. un-issued shares in a company's authorised capital may be cancelled, and the authorised share capital reduced appropriately, if the company's articles permit it without the need for a court application; and
  2. a court application is needed if share capital represented by issued shares is to be reduced.

The 2006 Act permits the redemption, purchase or other acquisition by a 2006 Act company of its own shares provided the directors certify that the company passes the solvency test.

The redemption or re-purchase of shares or depositary certificates in respect of shares in a Jersey company is permitted from any source provided the directors sign statements of solvency.

Reduction of capital of a Jersey company may be achieved by the directors providing a solvency statement or subject to confirmation by the court where the shares in the company are limited and the reduction extinguishes or reduces the liability on any amount unpaid on a share or reduces the net assets of the company.

6.3 Financial Assistance

A Guernsey company may give financial assistance to acquire its shares or shares in its holding company provided it passes the statutory solvency test.

Under the 1931 Act it is unlawful for an Isle of Man public company or its subsidiaries to give financial assistance for the acquisition of shares in that public company. Equally it is unlawful for a public company to give financial assistance for the acquisition of shares in its private holding company. However there is no prohibition against a private company giving financial assistance for the acquisition of shares in itself or its private holding company. Companies formed under the 2006 Act may give financial assistance to acquire its shares or shares in its holding company.

Jersey companies may give financial assistance to acquire its shares or shares in its holding company but if that assistance amounts to a distribution of company assets it may need sanction by special resolution.

6.4 Auditors

Certain Guernsey companies may be exempt from audit requirements although it would be unusual for a listed company to be audit exempt.

Certain Isle of Man companies may be exempt from audit requirements. All public companies established under the 1931 Act, and listed companies established under the 2006 Act must appoint auditors.

In Jersey, a public company must appoint an auditor to examine and report on its accounts in accordance with the law. However, in certain circumstances, the requirement may be disapplied but it is unlikely to apply to a listed company.


A company which is listing its shares on, for example, the main market of the LSE or AIM, must provide a prospectus or listing particulars (primarily containing information on the company and its business) which satisfies certain listing and prospectus rules.

In addition to the requirements of the relevant exchange, there are the following regulatory requirements depending on the jurisdiction of the company.

7.1 Guernsey

Provided the Company is listing on an IOSCO recognised exchange, there are no regulatory requirements.

7.2 Isle of Man

If an Isle of Man corporate vehicle falls within the definition of a collective investment scheme it must be licensed by the Isle of Man Financial Supervision Commission (FSC). However if the corporate vehicle does not provide its investors with a right of exit then, even if it is an investment vehicle aimed at spreading investment risk, it will not be an open-ended investment company under Manx law and therefore will not be subject to regulation in the Isle of Man as a collective investment scheme. Closed-ended investment companies are therefore treated in the same way as any other company for regulatory purposes and no approvals are required from the FSC.

There are no prescriptive requirements relating to the content of a prospectus, although companies formed under Manx law must ensure that any prospectus issued by them includes all material information of which the directors were aware at the time of its issue (or of which they would have been aware had they made reasonable enquiries) and which a prospective investor would reasonably expect to be included to enable him to make an informed investment decision as to whether or not to invest. The information must be set out fairly and accurately. The prospectus is not subject to any filing requirements, unless the company is regulated by the FSC.

7.3 Jersey

Prior to issuing securities in a Jersey company, it is necessary to obtain consent under the Control of Borrowing (Jersey) Order, 1958 from the JFSC.

Prospectuses in Jersey should contain prescribed information in compliance with the provisions of the Companies (Jersey) Law 1991, the Companies (General Provisions) (Jersey) Order 2002 or the Collective Investment Funds (Certified Funds – Prospectuses) (Jersey) Order 2012 and require approval of the Registrar of Companies in Jersey.

The prospectus should include all material information a prospective investor would reasonably require including details relating to the offer, capital, material contracts, accounts and reports, directors, secretary, advisers and include prescribed statements. There may be derogations from the requirements of the law provided the Registrar of Companies is satisfied they do not affect the substance or are intended to mislead. There should also be a statement by the directors that the facts contained in the prospectus are true and accurate in all material respects and not misleading.

A memorandum of compliance should be completed, signed and filed with the final form of prospectus. The final form of prospectus should be signed by or on behalf of the directors of the company and will be filed in the public registry. There is no additional cost to the initial incorporation fee.

Every Jersey company must have its registered office in Jersey. The Registrar of Companies must be satisfied before: a) registering a company; or b) approving a change of address, that the occupier of the premises proposed to be used as the registered office has authorised the use of the premises for that purpose.

Although the time taken by the Registry to carry out the review stages can vary, there is usually response to the initial review stage within five days and the document review stage within a further five days. Occasionally, those stages may be combined to create one stage with a five day review. The formal registration/consent stage rarely takes more than one or two days.


8.1 UK Disclosure and Transparency Rules

There are no statutory disclosure and transparency provisions under Guernsey, Isle of Man or Jersey law requiring shareholders to disclose interests in shares. It is now standard practice to include provisions in the constitution of the company to reflect the requirements of the relevant stock exchange.

8.2 Pre-emption Rights

Although the respective legislation in Guernsey, Isle of Man and Jersey does not provide for pre-emption rights, certain stock exchanges require such provisions and they are generally included in constitutive documents of a company in order to increase investor protection.

8.3 UK City Code on Takeovers and Mergers

Listed companies which are managed and controlled in Guernsey, Isle of Man or Jersey must adhere to the UK City Code on takeovers and mergers. Companies which are not required to comply with the Code usually, as a matter of good practice, include provisions in the constitution of the company prohibiting or restricting share purchases in the circumstances set out in the Code and the directors have wide powers relating thereto.

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.

In association with
Related Topics
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