Friday, February 1, 2013
Low-tax Guernsey remains the top domicile of incorporation globally for non-UK entities listed on the London Stock Exchange, according to end-of-year data from the London Stock Exchange (LSE).
The statistics show that at the end of December 2012 there were 122 Guernsey-incorporated entities listed on either the Main Market, the Alternative Investment Market (AIM), the Specialist Fund Market (SFM) or as "Trading Only."
This is comfortably more than the major economic powers of the United States (43), Russia and Australia (both 31), India (30), South Africa (10), Germany (7), China (5) and France (3).
It was also well ahead of competitor centers Jersey (86), Ireland (54), the Isle of Man (52), the Cayman Islands (46), Bermuda (44) and the British Virgin Islands (37). Thereafter, Luxembourg is home to 11, Singapore eight, Gibraltar five, Hong Kong three, and Malta two.
A major bonus of incorporating a company in Guernsey is that corporate tax is 0% for all firms, except for those involved in specified banking activities, which pay 10% tax, and utility providers and companies deriving income from land and real estate, which pay 20% income tax.
Fiona Le Poidevin, Chief Executive at Guernsey Finance - the promotional agency for the island's finance industry, said: "These figures show that Guernsey remains home to more non-UK entities listed on the LSE than any other jurisdiction globally, including our competitor international finance centers. The fact that so many companies and securities on the exchange are incorporated in Guernsey means that we have developed significant expertise in London listings and this continues to be recognized by professional advisers in the City of London and beyond."
In addition, Guernsey was the domicile of choice for non-UK entities listing on the Main Market of the LSE, with a total of six companies. In second place was Jersey (four), followed by Canada and Cyprus (both two) and then Egypt, the Isle of Man, Kazakhstan, Netherlands and Russia (with one each).
Including UK entities, Guernsey (67) has the most number of entities listed on the Main Market of the LSE, followed by Jersey (35), Ireland (28) and Bermuda (21).
Jersey (49) is home to the most number of AIM-traded entities, with Guernsey (42) taking second place, then the Isle of Man (40), the Cayman Islands (38), the British Virgin Islands (33) and Ireland (26).
The AIM is unique in that it has historically provided smaller businesses the opportunity to raise capital. However these investments are generally seen as being more risky, albeit with higher returns than typical investments in blue chip companies. Companies listing on the AIM benefit both from less onerous regulatory requirements and tax incentives.
Meanwhile, Guernsey is also home to more than two-thirds of all listings on the SFM. The Specialist Fund Market is the London Stock Exchange's regulated market for highly specialized investment entities that wish to target institutional, professional and highly knowledgeable investors only.
In addition, Guernsey (70) is the clear market leader in terms of the number of 'Equity Investment Instruments' - the majority of investment funds - listed on the LSE, followed by Jersey (16) and the Cayman Islands (12).
Le Poidevin continued: "The data shows that Guernsey is an extremely popular location for establishing vehicles to facilitate listing on the LSE, whether the Main Market, AIM or the SFM. However, companies incorporated in Guernsey can list not just on the London Stock Exchange but also the local Channel Islands Stock Exchange, Euronext Amsterdam, markets in Australia and Toronto, as well as the Hong Kong Stock Exchange, among many others."
"This means that Guernsey provides a gateway to accessing capital from around the world, including the developing economies where there is the largest growth in private and corporate wealth which will be looking for suitable global investment opportunities. This is a major attraction of establishing investment structures in Guernsey and is a feature which we will be reemphasizing during our work in both the ‘traditional' and the 'emerging' introducer markets during 2013."