Why Guernsey and Jersey should be in an Asia-based manager's UK/European tool kit for investment funds
根西岛、泽西岛——通向英国和欧洲
The mature and stable investment funds and regulatory regimes of the Channel Islands offer Asia-based managers an efficient hub to manage capital flows across the world, write Carey Olsen's Andrew Tually and Susan McKinstray.
根西岛和泽西岛对于希望利用英国/欧洲投融资机会的亚洲管理人来说变得越来越重要。2018年，英国超过了历年以来最大的接收国美国，成为了中国对外直接投资的最大接收国。
The islands of Guernsey and Jersey, located in the English Channel between the UK and France, are world-leading international financial centres offering a tax neutral, efficient and stable hub to manage capital inflows and outflows between the UK, Europe and the rest of the world.
Guernsey and Jersey are becoming more relevant to Asian managers looking to take advantage of investment and fundraising opportunities in UK/Europe. In 2018, the UK was the largest recipient of Chinese outbound foreign direct investment surpassing the US, which has historically been the biggest recipient.[1] As at the end of 2018, Europe saw the largest amount of overseas mergers and acquisitions announced by China, reaching US$65.94 billion, with rapid growth (up 37.9% year-on-year), accounting for 60% of the total global M&A of Chinese enterprises, up nearly 20% from 2017.[2] Whilst more recent data shows a retraction of those flows over H1 2019, Europe still receives three times more investment from China than North America.[3] Further uncertainties in trade friction between the US and China are expected to continue this trend.
Guernsey and Jersey sit at the cross-roads of these capital flows and are well-poised to serve as tax neutral, efficient conduits for them. In addition, and partly in response to the current political situation in Hong Kong SAR, HNW individuals and family offices are also looking at Guernsey and Jersey foundations and trusts as safe havens for wealth, taking advantage of their mature and stable regimes.
It is against this backdrop that Carey Olsen’s Singapore office, which is permanently staffed with senior lawyers with Guernsey and Jersey experience, has seen an increasing number of enquiries from Asian as well as Australian investment managers, family offices and other advisers looking to set up structures in Guernsey and Jersey to either attract capital or to deploy it.
Key facts:
- Funds established by Asian-based promoters in Guernsey and Jersey have increased over the past year by 6% with assets under management increasing by 40% over the same period.[4]
- Japan’s SoftBank Vision Fund, the world’s largest investment fund, is domiciled in Jersey.
- Guernsey and Jersey remain the home for more non-UK LSE listed entities than any other jurisdiction globally.
- Guernsey and Jersey boast broad international appeal and familiarity with their funds promoted or sponsored in more than 55 jurisdictions globally.
- Guernsey and Jersey funds can be registered for sale to more than 90% of the world’s 300 largest pension funds and 37 of the 50 largest sovereign wealth funds.
- Guernsey and Jersey have, between them, a full set of regulatory MOUs with all of China’s financial services regulators and thus enjoy the ability to raise capital in the world’s most populous nation.
- Guernsey and Jersey have entered into tax information exchange agreements with many countries in Asia (including China) and double taxation agreements with Hong Kong and Singapore.
Investment funds and IPOs
Looking at the funds market, the islands have thriving, tried-and-tested funds industries and sophisticated professional workforces with current combined funds under management exceeding £622 billion. The islands have for decades served as jurisdictions of choice for private equity (PE), infrastructure and real estate fund managers based in the US, UK, Europe and Middle East looking to raise funds from corporates, pension funds, insurance companies, professional investors and sovereign wealth funds located not just in Europe but all around the world.
The legitimate avenues for moving money offshore from China are relatively few and becoming fewer. Insofar as offshore IPOs are a route out, there is still a strong pipeline in Hong Kong for Chinese companies listing offshore. Guernsey and Jersey are popular jurisdictions for listings and remain the home for more non-UK London Stock Exchange listed entities than any other jurisdictions globally.
Whilst it should be acknowledged that Cayman funds have traditionally been more popular with Asian promoters and investors, the Guernsey and Jersey regimes are very familiar to UK and European investors. Accordingly, we expect Guernsey and Jersey funds to become increasingly relevant to Asian as well as Australian managers looking to secure funding from the UK and Europe.
Private investment
Offering tax neutrality and a solid network of Double Tax Agreements, the islands are also an attractive base for investors wishing to make private investments locally, particularly into UK real estate which has historically seen a flourish of foreign investment off the back of a weaker Pound.
Benefits of Guernsey and Jersey
Here are some of the benefits of Guernsey and Jersey structures:
Stable
Guernsey and Jersey are politically and fiscally autonomous. They are neither part of the UK nor part of the EU. Both islands have adopted many principles of English common law and equity. Legal redress can be sought through a reliable judicial system, with ultimate appeal to the Privy Council in England.
Professional service
As expected from jurisdictions with such significant levels of funds under management and administration, Guernsey and Jersey have a wealth of first class fund service providers. This creates a virtuous circle – as funds under management increase, so does the depth of expertise which in turn attracts further funds under management. The islands also benefit from dozens of experienced independent non-executive directors who give good substance on-island and ensure that the highest standards of corporate governance are observed.
Service providers located in Guernsey and Jersey are serious about attracting Asian customers and have established offices in key Asian markets, including Hong Kong, Singapore and mainland China. Asian promoters can rely on Guernsey and Jersey service providers to pass on their experience, knowledge and best practice to their customers – this is especially relevant in PE which remains a nascent but rapidly developing asset class in Asia.
Speed to market
Guernsey and Jersey companies and other entities, like limited partnerships, can be established as quickly as within 24 hours. Qualifying private investor funds in both jurisdictions can be established and registered with the relevant regulator within 48 hours.
Sensible and streamlined regulation
Guernsey and Jersey maintain proportionate, flexible and competitive funds regulatory regimes, adopting a risk-based approach to ensure that appropriate levels of investor protection are maintained, whilst at the same time avoiding unnecessarily complex or burdensome regulation. Simplicity is the key here with light-touch regulatory options being tailored for private investment funds targeting sophisticated and institutional investors.
Access to markets
Guernsey and Jersey funds continue to raise significant amounts of capital from European investors by utilising national private placement regimes (NPPR), which have been, and continue to be, the preferred approach for raising funds from sophisticated investors around the world. Yes, AIFMD applies to marketing in Europe but, in practice, that means Guernsey and Jersey managers continue to use NPPR with minor AIFMD-related tweaks (e.g. ensuring prospectuses include certain prescribed disclosures and registering the prospectus with Member State authorities, as required). Eventually, Guernsey and Jersey managers may be able to “passport” their funds as a third country through the whole of the EU once the passporting regime is extended to third countries.
Cost effectiveness
For Asian managers looking to attract European capital, the ability to use NPPR with the option to scale up for full AIFMD compliance later is a flexible and cost effective option, compared to setting up a fully-regulated AIFMD “onshore” manager from day one (say, in Luxembourg). Luxembourg will naturally be more appropriate for larger funds with a retail offering. However, managers marketing to sophisticated investors in Europe do not typically need (or want) to market on an EU-wide basis. Instead, a more targeted approach is preferred, which is more conducive to the NPPR model with its attendant efficiencies and cost savings.
Our enquiries and research show that setting up a manager and/or fund vehicle in Guernsey and Jersey is considerably cheaper than setting up a Luxembourg-based manager/fund vehicle. Those costs savings are not only limited to establishment but continue over the life of the fund with ancillary, recurring costs (e.g. audit and legal fees) being much lower in Guernsey and Jersey than in Luxembourg.
Substance and legitimacy
Sophisticated investors have an increasing respect for legitimate structures with substance. Both islands have rigorous AML requirements and have been assessed by FATF as being among the best quality financial centres in the world for tackling money laundering and terrorist financing.
Diversification
Hong Kong has historically been the platform from which Mainland China wealth expands in the region and globally. But irrespective of any recent troubles, Chinese clients have for some years been seeking greater diversity, with Guernsey and Jersey increasingly being a strong draw for wealth clients due to their stable regulatory environment and autonomy from the UK and Europe.
Tax
Guernsey and Jersey offer tax neutrality, which is important in a funds and cross-border transactions context and both jurisdictions were early adopters of FATCA and CRS, offering transparency. There is also no capital gains tax or inheritance tax in the islands.
Carey Olsen is one of the only offshore law firms in Asia with a Channel Islands Desk permanently staffed with senior lawyers who have Guernsey and Jersey experience.
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[1] Statistics complied by Baker McKenzie and Rhodium Group (2019).
[2] Ernst & Young report “2018 China Outbound Investment Overview” (2019).
[3] As above.
[4] Monterey Insight Reports 2017 & 2018.
An original version of this article was published in the Asia Business Law Journal, November 2019.
© Carey Olsen 2019.
海峡群岛成熟而稳定的制度可以成为管理全球资本流动的高效中心
根西岛和泽西岛位于英法之间的英吉利海峡，是世界领先的国际 金融中心，提供了一个管理英国、欧洲和世界其他地区之间资本流入和流出的税收中立、高效和稳定的中心。
2018年底，欧洲是中国对外并购规模最大的地区，达到了659.4亿美元，增长迅速（同比增长37.9%），占到了中国企业全球并购总额的60%，比2017年增长了近20%。虽然近期的数据显示，2019年上半年有一些资金进行了回调，但欧洲从中国获得的投资仍然是从北美获得的三倍。中美贸易摩擦的进一步不确定性预计会延续这一趋势。
根西岛和泽西岛位于这些资本流动的十字路口，已经准备好为其提供税收中立和有效的渠道。此外，为了在某种程度上应对香港当前的政治局势，高净值人士和家族办公室也利用其成熟而稳定的体制，将根西岛和泽西岛基金会和信托视为财富的避风港。
正是在这样的背景下，一直配备着拥有根西岛和泽西岛丰富业务经验的资深律师的凯瑞奥信律师事务所新加坡办公室收到了越来越多来自亚洲和澳大利亚的投资经理、家族办公室和其他顾问的咨询，他们都希望在根西岛和泽西岛设计结构以吸引或者配置资金。
重要事实：
- 亚洲地区发起人在根西岛和泽西岛设立的基金在过去一年里增加了6%，管理的资产同期增长了40%。
- 全球最大的投资基金日本软银愿景基金注册于泽西岛。
- 相比于全球其他法域，根西岛和泽西岛依然是在伦敦证券交易所上市的非英国实体注册最多的地方。
- 根西岛和泽西岛拥有广泛的国际吸引力和熟悉度，它们的基金在全球超过55个法域进行募集。
- 根西岛和泽西岛的基金可以通过注册销售给超过90%的全球最大的300家养老基金，以及全球最大的50家主权财富基金中的37家。
- 根西岛和泽西岛与中国所有的金融服务监管机构签署了全套的监管谅解备忘录，因此可以在这个全球人口最多的国家募集资金。
- 根西岛和泽西岛与包括中国在内的许多亚洲国家签订了税收情报交换协定，并与香港和新加坡签署了避免双重征税协定。
投资基金和首次公开发行
看看基金市场，这些岛屿已经蓬勃发展，尝试并检验了基金行业和成熟的专业人才，目前管理的基金总额超过了6220亿英镑（8046亿美元）。这些岛屿在过去几十年间一直是总部位于美国、英国、欧洲和中东的私募股权、基础设施和房地产基金管理人寻求向欧洲和世界各地的企业、养老金、保险公司、专业投资者和主权财富基金募集资金的首选地区。
将资金从中国转移到海外的合法途径相对较少，并且越来越少。其中海外上市是一条出路，中国企业赴香港上市的渠道仍然很强。根西岛和泽西岛是上市的热门法域，相比于全球其他法域，仍然是在伦敦交易所上市的非英国实体注册最多的地方。
虽然必须要承认的是开曼群岛基金在历史上更受亚洲发起人和投资者的欢迎，但根西岛和泽西岛对于英国和欧洲投资者来说更加熟悉。因此，我们预计根西岛和泽西岛基金对于希望从英国和欧洲募集到资金的亚洲和澳大利亚管理人会变得越来越重要
私人投资
这些岛屿提供了税收中立和稳定的避免双重征税协定网络，对于希望在当地进行私人投资，尤其是在英国房地产领域进行投资的投资者来说，也是一个具有吸引力的基地。历史上，在英镑走弱的情况下，外国投资通常会蓬勃发展。
根西岛和泽西岛的优势
根西岛和泽西岛结构具有以下优势：
稳定。根西岛和泽西岛在政治上和财政上都是自治的。它们既不是英国的一部分，也不是欧盟的一部分。这两个岛屿都采用了英国普通法和衡平法的许多原则。寻求法律救济可以通过可靠的司法制度，最终上诉至英国枢密院。
专业服务。正如所预期的那样，作为管理如此庞大规模资金的法域，根西岛和泽西岛拥有大量一流的基金服务提供商。这就形成了一个良性循环——随着管理的基金不断增多，专业知识的深度也随之增加，从而吸引更多的基金进行管理。这些岛屿还得益于数十位经验丰富、独立的非执行董事，他们提供良好的岛上实质服务，并确保遵守最高标准的公司治理。位于根西岛和泽西岛的服务提供商非常重视吸引亚洲客户，并在香港、新加坡和中国大陆等亚洲主要市场设立了办公室。亚洲发起人可以依赖根西岛和泽西岛的服务提供商，将他们的经验、知识和最佳实践做法传递给客户——这一点在私募股权领域尤为重要，私募股权在亚洲仍然是一个新兴但发展迅速的资产类别。
快速进入市场。根西岛和泽西岛的公司和其他实体，比如有限合伙企业，最快可以在24小时内建立。这两个法域符合条件的私募投资基金均可以在48小时内成立并在相关监管机构注册。
合理和精简的监管。根西岛和泽西岛保持着均衡、灵活和具有竞争力的基金监管制度，采取了一种基于风险的方法，以确保保持适当程度的投资者保护，同时避免不必要的复杂或繁重的监管。简单是这里的关键，针对成熟和机构投资者的私募投资基金，可以量身定做一些宽松的监管方案。
进入市场。根西岛和泽西岛的基金继续通过国家私募发行制度（NPPRs）向欧洲投资者募集大量的资金，这一直是并且将继续是从世界各地成熟投资者那里募集资金的首选方法。是的，《另类投资基金经理指令》（AIFMD）适用于在欧洲的销售，但在实践中，这意味着根西岛和泽西岛的基金经理继续使用国家私募发行制度，并对AIFMD进行一些微调（比如，确保募集说明书中包含某些规定的披露内容，并按照要求向成员国的监管机构注册募集说明书）。最终，一旦护照制度扩展到第三国，根西岛和泽西岛的基金管理人或许能作为第三国将其基金通过“护照”进入到整个欧盟。
成本效益。对于希望吸引欧洲资金的亚洲管理人来说，与从第一天起就建立一个完全受到监管的AIFMD “在岸”基金管理人（比如卢森堡）相比，采用国家私募发行制度是一种灵活而划算的选择，并且日后可以选择扩大规模全面遵守AIFMD。卢森堡自然更适合进行零售发行的大型基金。不过，面向欧洲成熟投资者募集的基金管理人通常不需要（或不想）在整个欧盟范围内进行销售。相反，更有针对性并具有相应的效率和节约成本的方法是首选，这更有助于国家私募发行制度模式。
我们的调查和研究表明，在根西岛和泽西岛设立基金管理人和/或基金实体要比在卢森堡设立管理人/基金实体便宜许多。这些成本不仅限于基金的设立，并会在基金的整个生命周期内持续发生，而根西岛和泽西岛的辅助成本（审计和法律费用）要比在卢森堡低许多。
内容和合法性。成熟的额投资者越来越尊重有实质内容的合法结构。这两个岛屿都拥有严格的反洗钱要求，并被国际反洗钱金融行动特别工作组评为世界上应对洗钱和恐怖主义融资最优质的金融中心之一。
多元化。在历史上，香港一直都是中国大陆财富在该地区乃至全球扩张的平台。但抛开近期的麻烦，中国客户这些年来一直在寻求更多的多元化，根西岛和泽西岛因其稳定的监管环境和来自英国和欧洲的自治权对富有客户的吸引力越来越大。
税收。根西岛和泽西岛提供税收中立，这在基金和跨境交易中是非常重要的，而且这两个法域都是外国账户税收遵从法案和通用报告准则的早期采纳国家，提供了透明度。此外，这两个岛屿也不征收资本收益税或遗产税。
凯瑞奥信律师事务所是亚洲少数几家在海峡群岛设有办公室的离岸律师事务所之一，一直配备着拥有根西岛和泽西岛丰富业务经验的资深律师。
