This page contains a Flash digital edition of a book.

N 2009, the Jersey authorities decided to launch their own foundations product aimed at jurisdictions with a civil rather than a common law system, including Latin America, Asia and the Middle East. At the time, Heather Bestwick, Technical Director of Jersey Finance, made great play of the fact that foundations would add to the mix of products on offer.

“Jersey is very keen to constantly refresh the product range to keep up its position in the finance industry,” she said. “We’re always looking to help the industry develop and to produce more business for the existing firms.” Since then, foundations have got off to a solid, if unspectacular, start. At the

time of writing, around 100 have been set up, with uses ranging from philanthropy to housing ‘orphan assets’. Observers in Jersey are, in the main, happy with progress. Over in Guernsey, this progress has been observed with interest. A foundation is, in essence, an incorporated entity with a separate legal personality (similar to a company) but without shareholders, and it holds assets for beneficiaries/purposes (similar to a trust). It holds these assets in its own name for purposes set out in its constitutional documents, its administration being carried out in accordance with contractual as opposed to fiduciary principles. Now Guernsey has decided to launch its own version, after the prospect of foundations being introduced into law was first mooted in 2004. Guernsey Finance recently announced the official launch will be in early 2012. Which begs two questions: Why? And why now? On the first, Russell Clark,

a Partner in the Fiduciary Law Group at Carey Olsen in Guernsey, believes the addition of foundations to Guernsey’s offering makes sense for several reasons. “I think it’s another weapon in our armoury, and it’s something that opens up new markets to us and our skills jurisdiction,” he says. “In Guernsey what we’re

“I think it’s another weapon in our armoury and it’s something that opens up new markets to us”

really about is administration of assets, and we’re opening this core product to new markets where it’s easier to sell the concept of a foundation. That’s because people understand what a foundation is, as opposed to going in there and trying to explain to them how a legal system has different types of property ownership that allows trusts to exist.” On the question of timing, Peter Niven, CEO of Guernsey Finance, says

foundations have been on the agenda for some time. “Actually, we started the process before Jersey, but they put their legislation together reasonably quickly,” he says. “But having said that, what we found is that trying to design a product that sits in a common law framework yet remains recognisable to someone coming from a civil law jurisdiction has not been as easy as we had originally thought. So I think what we’ve tried to do is get it right rather than get it out quickly.”

The same, but different Clearly a lot of work has gone into the drafting of the new law. Much of that work has been influenced by the eminent trust lawyer Filippo Noseda, a Partner at London firm Withers. As a civil lawyer who has worked extensively on common law trusts, Noseda has previously worked with the Isle of Man, and was viewed as the ideal candidate to bring the two elements together. In the view of Gavin Ferguson, Managing Partner at Appleby in Guernsey,

Noseda’s input has been crucial in drafting a law that will appeal to a larger number of potential customers in civil law jurisdictions. “His involvement gives an indication that the States have sought advice from somebody who comes at it from both perspectives. As a common law trust person I wouldn’t have

➔ October/November 2011 17


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84