Services · Trusts & private foundations

Guernsey foundations: how they work and what they cost

A legal entity with no shareholders under the 2012 Law: council, guardian, register, tax, and a candid look at who should not use one.

What a Guernsey foundation actually is

A Guernsey foundation is a legal entity with no shareholders and no members holding participations. It was introduced by the Foundations (Guernsey) Law, 2012, which came into force on 8 January 2013. Structurally it sits between a company and a trust: it has a constitution and a governing body like a company, but it has no owners, and it holds property for a stated purpose or for beneficiaries, like a trust.

The practical consequence is straightforward. Once the founder endows the foundation, the property is no longer his. There are no shares to inherit, pledge, seize for the founder's debts or split on divorce. The assets are managed by the council, and the limits of its discretion are written into the constitution drafted for that particular family.

The tasks a Guernsey foundation is normally built for:

• Passing family capital to the next generation without a will and without parallel probate proceedings in several countries.
• Holding shares in private companies and the family holding, where the structure has to outlive the founder.
• Acting as corporate protector of a trust or as the owner of a private trust company.
• Charitable and purpose projects with no beneficiaries at all - the Law allows a foundation that has only a purpose.
• Families from civil law countries where trusts feel alien. A foundation with a constitution and a council is far easier to explain to a bank, a notary or a relative than an arrangement in which property formally belongs to an outsider.

Guernsey is a Crown dependency with its own legislation, its own register and a mature fiduciary industry. This is not an anonymous offshore shopfront but a supervised jurisdiction. That is where both the quality of the structure and its price come from: there are no cheap options here.

The tool is a niche one. Companies and trusts on the island vastly outnumber foundations, of which only a few hundred have been registered since 2013. That means the body of case law is thinner than for trusts, and any non-standard question has to be worked out with lawyers rather than off the shelf.

Foundation or Guernsey trust: what actually differs

Both instruments are available on the island, and choosing between them is a question of mechanics, not prestige.

A Guernsey trust operates under the Trusts (Guernsey) Law, 2007. It is not an entity but a relationship: the settlor transfers assets to a trustee, who becomes their legal owner and must act in the interests of the beneficiaries. A trust is not registered anywhere and its existence is not public.

A foundation is an entity. It owns assets itself, contracts in its own name, sues and is sued, and answers for its own obligations. It must appear on the register. The council owes its duties to the foundation itself, not to the beneficiaries, and that is a fundamental departure from trust law, where the trustee's duties run to the beneficiaries. For some families that is a benefit - less room for claims from unhappy heirs. For others it is a drawback, because a beneficiary finds it harder to hold the managers to account.

If the goal is a structure with no public footprint and flexible management through a professional trustee, a Guernsey trust is the closer fit. If you need an entity that signs contracts, opens accounts and reads sensibly to counterparties in continental Europe, the Middle East and Latin America, the foundation fits better. Neighbouring jurisdictions are covered in our trusts and private foundations section.

The structure: council, guardian, beneficiaries, founder

The 2012 Law defines four roles, and how you allocate them determines both how manageable the structure is and how well it stands up to challenge.

Council. Mandatory. By default it has at least two councillors, although the constitution may provide otherwise. A councillor may be the founder himself or a body corporate. Every councillor is named on the register, must consent in writing to the appointment, and must act jointly with the others unless the constitution allows otherwise. The council keeps the foundation's records at the registered office. No one can be a councillor and guardian at the same time.

Guardian. Not always required. The Law calls for one in two situations: where the foundation has a purpose with no beneficiaries, or where there are beneficiaries with no right to information. The guardian supervises the council and represents those who cannot protect themselves. The founder or a company may act as guardian, but a sitting councillor may not. The guardian keeps records for the duration of the office and for six years after.

Beneficiaries. Here Guernsey offers something most jurisdictions do not - two distinct classes.

• Enfranchised beneficiaries. Entitled to a copy of the constitution, to disclosure of the foundation's records and accounts on written request to the council, and to apply to the Royal Court to block a change of purpose or a winding up.
• Disenfranchised beneficiaries. As a rule not entitled to any information about the foundation. The constitution sets out when and how such a beneficiary moves into the first class - on reaching a given age, for example, or on the founder's death.

The mechanism is genuinely useful where telling a young heir the size of the capital would be premature. It is also exactly why a guardian becomes mandatory: the Law will not leave assets with no supervisory link at all.

Founder. Endows the foundation with its initial capital; the Law sets no minimum. The founder may reserve powers to amend the constitution, change the purpose or terminate the foundation, subject to two limits: those powers must be set out in full in the charter, and they lapse on the founder's death, or after 50 years from establishment where the founder is a legal person. After that the structure runs on its own.

Resident agent. If none of the foundation's officials is a Guernsey licensed fiduciary or authorised person, the foundation must have a resident agent. The agent must be resident in Guernsey and a licensed fiduciary, may request the foundation's records at any time, and is responsible for keeping filed particulars current.

Registration: charter, rules, timing and registry fees

The constitution of a foundation is made up of two documents, and the difference between them matters.

The charter is filed with the Registrar. It must state the name of the foundation, its purpose, a description of the initial endowment, and the duration if the foundation is to subsist for a limited period. It contains the founder's declaration that he wishes the councillors to comply with its terms. Any reserved powers of the founder must be spelled out here in full, or they do not operate.

The rules are not filed. They set out how the council works, how councillors and the guardian are appointed and removed, how officials are remunerated, and all the operational detail. This is an internal document, and anything that does not have to sit in the charter is better placed here.

The register is split in two. Part A is public: the foundation's name and registered number, the names and addresses of the councillors, the guardian's details, and the registered office. Part B is confidential: the statement of purpose, the declarations and every document filed. Information in Part B cannot be disclosed without the consent of the person it relates to, other than where the Law allows or a court orders it.

Registration itself is quick. The Registry processes a standard application within 24 hours and a fast-track one within two hours. The bottleneck is not the Registry but compliance: collecting documents on the founder, the source of funds and every participant takes weeks, not hours.

Guernsey Registry fees

Registry fees apply from 1 December 2025 under the Foundations (Fees) Regulations 2025. Government fees change regularly, so we confirm the current figure at the date of filing.

The annual renewal is filed every year, with the foundation deadline falling at the end of March. Missing it is not fatal, but the penalty accrues daily and a foundation in arrears fares worse in bank reviews.

Privacy, GFSC supervision and the licensed administrator

Start with the uncomfortable part. A Guernsey foundation gives you privacy from the public, not invisibility from states.

Not publicly visible: the founder's name, the beneficiaries, the size of the capital, the purpose of the foundation, the content of the rules. All of that either sits in the confidential Part B or is never filed at all. Publicly visible: the name and number of the foundation, the councillors, the guardian and the registered office. Where a professional administrator sits on the council instead of family members, the public part says nothing about the family.

What is disclosed non-publicly, and to whom:

• Beneficial ownership data. Filed with the Registry, but recorded in neither Part A nor Part B. Since August 2025, supervised entities on the island have been able to request that data for customer due diligence. A separate consultation on legitimate interest access closed on 10 April 2026. The direction of travel is clear: access widens over time, it does not narrow.
• Automatic exchange. Under CRS and FATCA a foundation is classified either as a financial institution or as a passive non-financial entity. Either way, information on the founder and on those who receive distributions reaches the tax authorities where they live.
• The administrator. Knows everything about the structure and is obliged to keep records, answer the regulator and file suspicious activity reports.

Administering foundations in Guernsey is a regulated fiduciary activity under the 2020 fiduciaries law, supervised by the Guernsey Financial Services Commission (GFSC). In practice that means three things worth preparing for. First, source of funds review is deep, and a general account of savings accumulated over years will not do - documents are required. Second, the administrator may decline to take the structure on, and may refuse an instruction it considers contrary to the constitution or the law. Third, the administrator does not answer to the founder; it answers to the foundation and the regulator. Some people find that a shock, but it is precisely what makes the structure hold up in court: if the council is in reality run by the founder over the phone, an opponent gains the argument that the foundation is a facade.

How a Guernsey foundation is taxed

For income tax purposes a Guernsey foundation is treated as a company. The standard rate of corporate income tax on the island is 0 per cent. Higher rates of 10 and 20 per cent apply to specific activities listed in the income tax law: banking and other regulated business, income from local real estate, utilities, trading within Guernsey itself. A private foundation holding a portfolio and shares in companies normally falls outside them.

What that gives you in practice:

• Distributions to non-resident beneficiaries attract no Guernsey tax.
• Income from sources outside the island, and most local passive income such as bank interest, produce no Guernsey liability where the founder and beneficiaries are non-resident.
• The island has no capital gains tax, no inheritance tax and no VAT.

Now the important part. A zero rate in Guernsey does not make the structure tax-free. Tax arises where the people live. Your country of residence may:

• Treat the foundation as a controlled foreign structure and tax undistributed profits in the hands of the founder or a beneficiary. We cover the mechanics on our CFC rules page.
• Tax the endowment itself as a gift.
• Require a filing about participation in a foreign structure, with penalties for silence.
• Levy an exit charge if you change residence after the foundation is set up.

If the foundation carries on an activity within the economic substance rules, whether island substance is required has to be checked separately. Country-by-country rates are collected in our world tax rates section. We always ask clients to model the tax outcome in their country of residence first and discuss registration second; doing it the other way round often ends with the structure being wound up a year later.

What setup and annual administration cost

The cost of a foundation has three layers: our work on drafting and filing, the Registry fees, and the remuneration of the licensed administrator acting as councillor or resident agent.

Prices are indicative and cover our work on a standard case. We confirm the exact quote in writing after a short call, so you know the final figure before work starts. Government fees and bank charges are counted separately unless expressly included.

The final figure depends on the number of participants and the countries they live in, the number and complexity of the assets, whether a professional guardian is needed, whether audited accounts are prepared, and how many banking relationships have to be maintained. A structure with one portfolio and two beneficiaries and one with a trading holding, real estate in three countries and eight heirs differ by a multiple, not a margin.

A word on economics. Annual costs are fixed; they do not shrink with the capital. On assets of a few hundred thousand dollars, administration eats a visible share of the return, and it is more sensible to discuss simpler answers - up to and including an ordinary Guernsey company or a well-drafted will.

Guernsey, Jersey and Liechtenstein foundations compared

These three jurisdictions are usually weighed against each other, and the differences are not cosmetic.

Jersey. Foundations (Jersey) Law, 2009. A guardian is mandatory in every case, whether or not the foundation has beneficiaries. The council must include a qualified member - a licensed provider registered under the island's financial services law. Beneficiaries by default have no right to information, and neither the council nor the foundation owes them duties. Incorporation takes a few days and the standard registry fee is modest.

Liechtenstein. The Stiftung under the PGR is the oldest of the three traditions, rooted in civil law, in a country inside the EEA. Minimum capital is 30,000 in Swiss francs, euros or dollars, fully paid up. A private foundation is usually not entered on the commercial register but deposits its charter instead. The annual minimum corporate income tax is CHF 1,800, and a structure qualifying as a private asset structure pays only that - at the price of being barred from commercial activity.

The practical read: Guernsey wins on flexibility around beneficiary rights and on not forcing a licensed person onto the council, Jersey on the depth of accumulated practice, Liechtenstein on sitting inside the EEA and on standing with European banks. If you are weighing a foundation against a trust in the same group of jurisdictions, look at the Jersey trust and the Liechtenstein trust.

Who should not use a Guernsey foundation, and what goes wrong

We talk people out of this structure regularly. Here is when.

• A claim is already on the horizon. Moving assets into a foundation once a creditor is known, a demand has been served or a divorce has started is read by courts as putting assets beyond reach. Asset protection works in calm weather and only in advance.
• The founder will not let go of control. If the founder decides and the council merely papers it, an opponent will argue in court that the foundation is a facade. Reserved powers exist, but they must be in the charter and they lapse on death regardless.
• The capital does not justify the cost. Fixed annual costs do not shrink and fall due every year, including a bad one.
• The aim is to hide from a tax authority. It does not work. Information exchange, the beneficial ownership register and controlled foreign structure rules close that door. A foundation solves succession and governance, not concealment.
• Assets that are hard to administer. Cryptocurrency, early-stage startup stakes, collectibles, an operating business in a high-risk sector - licensed administrators often decline such structures or price them at a multiple.

What can go wrong after registration

• The bank does not open the account. The Registry registers the foundation in a day; the bank reviews the file for months and may still say no. We discuss the bank before registration, not after. See Guernsey accounts for structures.
• A dispute between the council and the beneficiaries. An enfranchised beneficiary can go to the Royal Court to block a change of purpose or a winding up. Those proceedings are slow and expensive.
• Conflict over beneficiary class. An heir who learns he has no right to information takes it badly. Set the conditions for moving between classes in advance and explain them to the family while the founder is alive.
• Leaving costs more than arriving. Migrating the foundation out of Guernsey costs a £2,500 fee plus legal work on both sides. Changing jurisdiction on a whim is not on the table.
• Participants change tax residence. A beneficiary moving to a country with strict foreign structure rules can undo the whole tax logic of the arrangement, and the structure has to be revisited.
• The founder dies with an unprepared council. If succession within the council is not addressed, the foundation is left with a body no one can replenish. The Law does provide a default appointment mechanism, but it is better not to test it.

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