Chinese companies eye Guernsey captives as they expand in Europe

Guernsey’s reputation for captives is growing among Chinese clients, with the island being the best place for Chinese businesses to set up a captive as they look to expand into Europe, according to Kate Storey, a partner at Walkers.

Storey was a speaker at the Guernsey Finance Shanghai Masterclass, speaking about captives. At the event she highlighted the ability to set up captives quickly in Guernsey, and the proportionate, risk-based approach of its regulator, as among the key benefits of the jurisdiction.

“Proximity to London is a selling point, as is Guernsey's international reputation as a highly regarded legal and regulatory environment, and the high quality of professional services available within the jurisdiction,” she added.

“The fact that entrepreneurs can set up captives to be owned by a trust arrangement for the benefit of their family members was of interest to the audience,” Storey said.

Storey pointed to existing co-operation agreements between Guernsey and China as another reason Chinese companies will will comfortable establishing their captives in Guernsey.

Since March 2017 there have been agreements in place between the Guernsey Financial Services Commission and the China Banking and Insurance Regulatory Commission, and between Guernsey Finance and the Beijing Airport Economic Core Zone.

Charles Scott, managing director of Guernsey-based Asset Risk Management, also spoke at the event, and said working in China is paying dividends for companies that take the time to visit.

“We are working on a business plan for the first Chinese-owned Protected Cell Company as well as a cell in the ARM-owned Windward insurance PCC,” said Scott. “There are a number of other captive projects we are working on, but these are not in the advanced stage yet.”

Guernsey has had a permanent representative in China for more than a decade and has built contacts with government, regulators and potential clients in a range of activities over that time.