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Guernsey has a solid history in operating collective investment funds. The island has a reputation for providing a healthy choice of experienced fund services providers, together with flexibility of structure and regulation, a stable government, the option of access to the Channel Islands Stock Exchange and preferential taxation. This update reviews the system of successfully setting up a hedge fund in Guernsey.

Guernsey has a solid history in operating collective investment funds. The island has a reputation for providing a healthy choice of experienced fund services providers, together with flexibility of structure and regulation, a stable government, the option of access to the Channel Islands Stock Exchange and preferential taxation. This update reviews the system of successfully setting up a hedge fund in Guernsey.

The situation in Guernsey regarding informal freezes of suspect assets has caused confusion and attracted widespread criticism – foreign clients and lawyers are unable to understand how a system creating such an 'informal freeze' can have been enacted and be allowed to endure. However, following a Royal Court of Guernsey ruling, it seems that there is light at the end of the tunnel.

In early 2011 the Guernsey Financial Services Commission held a workshop for non-executive directors relating to the Internal Capital Adequacy Assessment Process. This update summarises the key take-home points from the workshop for non-executive directors.

In early 2011 the Guernsey Financial Services Commission held a workshop for non-executive directors relating to the Internal Capital Adequacy Assessment Process. This update summarises the key take-home points from the workshop for non-executive directors.

In early 2011, in a joint statement, the States of Guernsey and the Guernsey Financial Services Commission confirmed that it was not Guernsey's intention to seek third country equivalence under the EU Solvency II Directive. Industry groups and trade publications in Guernsey have applauded this strong clarifying statement, coming after what has been a concerted lobbying effort at local level.

In early 2011, in a joint statement, the States of Guernsey and the Guernsey Financial Services Commission confirmed that it was not Guernsey's intention to seek third-country equivalence under the EU Solvency II Directive. Industry groups and trade publications in Guernsey have applauded this strong clarifying statement, coming after what has been a concerted lobbying effort at local level.

Alderney has a longstanding reputation as a centre of excellence in the remote gambling industry. Due to the robust regime that has been implemented by the Alderney Gambling Control Commission, it has attracted the biggest operators and players in the world. The experience gleaned by the commission in regulating the industry has led to a deep-rooted understanding of the sector.

Many factors combine to make Guernsey a competitive jurisdiction for the establishment and administration of all types of trust structure. These include its commitment to tax transparency, as demonstrated through the signing of tax information exchange agreements with 15 countries, and its strong regulatory environment.

The credit crunch has proved an irresistible temptation for companies to expand their use of unpaid internships, but it can be hard to distinguish between 'work experience' and 'working'. Employers should carefully consider the placements that they offer, as they may face prosecution under minimum wage laws.

The States has approved the preparation of an ordinance to amend the Conditions of Employment (Guernsey) Law 1985. The change arises from an interesting example of the interplay between the different laws that impact upon the employment relationship. Occasionally, applying the law will require businesses to balance seemingly conflicting regulations – if in doubt, employers should seek legal advice.

The Commerce and Employment Department has released a consultation document regarding possible changes to the Companies (Guernsey) Law. Many of the proposed changes aim to clarify existing provisions. The consultation generally appears to be a fine-tuning exercise aimed at improving the provisions of a law which is already regarded as taking a modern approach to company law issues.

Although the existing law on limited partnerships in Guernsey functions well, as part of a general review of the jurisdiction's commercial laws, the States of Guernsey has taken the opportunity to propose amendments to the law in order to increase its flexibility and certainty, thereby ensuring that Guernsey remains a frontrunner for those seeking to establish limited partnerships.

International Monetary Fund (IMF) staff will soon revisit Guernsey to continue the assessment of the island's anti-money laundering (AML) legislation, among other things. Although the Guernsey AML framework is generally seen as robust, the Guernsey Financial Services Commission recently introduced changes in order to close certain loopholes, adapt to changing criminal practices and adopt certain IMF recommendations.

Amendments to the Data Protection (Bailiwick of Guernsey) Law 2001 have entered into force. The provisions on disclosure limitations, third-party data controllers and exemptions from the data protection rules all underwent changes, while heavier penatlies for those found to be in breach of data protection rules were introduced.

A recent Court of Appeal ruling will have a significant impact on future practice, since Her Majesty's Revenue and Customs could now potentially be joined as a party to any Hastings-Bass application that may have UK tax consequences. Some critics argue that this position could lead to further intervention by foreign revenue authorities in cases which may have tax implications.

Companies, protected cell companies, incorporated cell companies, limited partnership interests and unit trusts can be listed on the Channel Islands Stock Exchange (CISX). The Channel Islands are not within the European Union and so the CISX is not a regulated market for the purposes of EU directives, which do not apply to the issuer by reason only of a listing on the CISX.

The Guernsey Court of Appeal recently held that Guernsey law would follow UK common law on the correct procedure for deciding whether a term regarding jurisdiction has been incorporated into an agreement. In such cases a preliminary decision should be taken on the incorporation of a jurisdiction clause, in accordance with the principles of Guernsey law, but without finally deciding the issue.

A proposal to introduce limited liability partnerships (LLPs) into Guernsey law has been approved by the government. Guernsey's LLP regime will bear some similarities to that of the United Kingdom. Although their use will not be limited in scope, it is expected that the LLPs will mostly appeal to practitioners in professional firms who currently work within a general partnership.

The Companies (Panel on Takeovers and Mergers) Ordinance 2009 will come into force shortly, formalizing an agreement under which the UK-based panel regulates Guernsey takeovers and mergers by administering the City Code on Takeovers and Mergers.

Changing market conditions are having an effect on the risk appetite of investors in selecting investments. Increasingly, investors are mindful of the level of regulation in place in the jurisdictions in which investment vehicles are established. In response, Guernsey has finalized the detail on a number of measures that have been in the pipeline and enacted three new laws.

The entry into force of the Companies Law 2008 brought a significant change to the types of company that still require a statutory audit. It also introduced a different process for adopting the extended exemptions from audit now allowed. While the number of companies that can qualify for audit exemption has increased, the potential for missing critical filing deadlines has grown.

The States of Guernsey has established a deposit compensation scheme to protect the deposits of retail depositors with local banks. The scheme covers the first £50,000 of deposits by individuals. As part of the second level of funding for the scheme, a captive insurance company has been established to fund the first £20 million of risk of the scheme.

One of the many changes introduced in Guernsey's comprehensive new companies law allows a Guernsey company and its members to enter into a scheme of arrangement where 75% or more of the members vote in favour. The Royal Court has now approved the first such scheme under the new legislation.

At first glance, Guernsey leases appear to be virtually identical to UK leases. The style, content and format are strikingly similar and it is obvious that the form of lease used in Guernsey draws heavily on that used in the United Kingdom. However, there are several important distinctions between the two that could easily catch one out.

The Companies (Guernsey) Law 2008 is new legislation which primarily consolidates existing law but will also incorporate a number of improvements. It was approved by the States of Guernsey (the island's government) on January 30 2008 and is now awaiting royal assent. It is expected to enter into force no later than July 1 2008.

The Uncertificated Securities (Enabling Provisions) (Guernsey) Law 2005 permits the Commerce and Employment Department to make regulations providing for title to securities to be evidenced and transferred without a written instrument. It is proposed that regulations be introduced under the law to provide a framework for title to securities to be evidenced and transferred through a computerized system.

There has long been an awareness of the need for a comprehensive overhaul of company law that would integrate and consolidate all existing amendments as well as ensuring the highest international standards. Proposals have been put forward to revise completely Guernsey's company law. This update lists major and other proposed changes.

Recent changes to the IP laws enacted by the States (Parliament) of Guernsey will bring the Bailiwick right up to speed with the rest of the world and provide a unique advantage for Guernsey as a place to manage intellectual property in an offshore, tax-benign environment. The biggest change is in relation to trademarks.

The Employment Protection (Guernsey) (Amendment) Law 2005 has been passed by the States and is now in force. The new law makes some significant changes to the existing law and generally introduces greater rights for employees. This in turn means greater risk - and potential expense - for employers.