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Our
recommended choice for Channel Island companies is Alderney. It
is the third largest island of the Channel Islands. Like Guernsey
and Jersey, the island enjoys a mild climate and independence, with
its own government and a small but perfectly formed offshore finance
and ecommerce sector.
Geographically,
the island is closest to mainland France (8 miles), whilst Guernsey
(23 miles), Jersey (30 miles), and the Isle of Wight (60 miles)
are not that far away. There are direct flights to Southampton,
Bournemouth, Guernsey, and Jersey, with other routes to the UK currently
being planned.
There
is also a ferry service to France. |
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Finance
Industry Overview
The
finance industry on the island is regulated by the Guernsey Financial
Services Commission, and administered by the Alderney Registrar
of Companies.
It
is well established, with full banking, legal and accountancy services
on the island.
In
common with Guernsey and Jersey, Alderney has a stable government,
low taxation and confidentiality. Unlike these other islands, Alderney
services are regarded as very reasonably priced. |
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Company formation and administration
The
companies (Alderney) Law 1994 which came into force in mid 1995
is a modern company law. Its main features are: |
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A
Minimum membership of one person. Incorporated by registration; |
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General
meetings may be held anywhere; |
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Private
companies may dispense with AGMs; |
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Non-resident
directors and corporate directors are allowed; |
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Provision
for the application of standard form articles if required; |
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Abolition
of the ultra vires rule; |
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Provision
for share capital in any currency; |
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Simplified
accounting for private companies, without the need to appoint
an auditor; |
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Private
companiesmay have a minimum of one director and a secretary; |
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Provision
for resolutions of members and directors in writing; |
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Modern
provisions for amalgamations, arrangements, investigations
and winding up. |
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| Anonymity
may be increased through the use of local resident directors and nominee
shareholders. |
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Types
of company
There
are 3 types of company allowed: |
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| Local Companies |
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A company,
which is resident in Alderney, is liable to income tax on the whole
of its income (net of expenses) wherever such income arises or accrues.
A company
incorporated in Alderney is treated as a resident in the island
and consequently liable to income tax at the standard rate of 20%.
However, the company may be eligible for ‘exempt’ or
‘international’ status. |
Exempt Tax Companies |
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A company
incorporated in Alderney, which satisfies certain condition, may
apply for tax-exempt status. An exempt company is able to hold board
meetings in Alderney, for example, to conclude contracts, without
those meetings constituting the carrying on of a business provided
that the only other activities conducted in the island are of an
administrative or clerical nature.
In
order to qualify as an exempt company the conditions that need to
be satisfied are that: |
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The
beneficial ownership of the company is in the hands of non-residents
(except in certain circumstances); |
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Dividends
are not payable under deduction of income tax; |
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An
exempt company is not required to file annual accounts, only
such information as is necessary to quantify Alderney sources
of income; |
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Managerial
and secretarial services are carried out by a person resident
in Alderney for remuneration calculated on am arms length
basis; |
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A
person resident in Alderney carries out custodial services
unless the Income Tax Authority is satisfied that in the circumstances
of a particular case such a requirement would be unreasonable; |
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No
investment or other property situated in Alderney may be held
other than a relevant bank deposit or an investment scheme
or exempt company |
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An
exempt investment scheme is not required to file annual accounts
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| International
Business Companies |
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An
Alderney incorporated company, which is owned by a non-resident,
may be used for the conduct of international trading activities,
which generate income derived exclusively from non residents of
Alderney. Such a company may qualify for International Company status.
In
order to qualify as an International Company, certain conditions
must be satisfied: |
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An
international company is resident in Alderney for all the
purposes of the income tax law, but it will pay tax at a rate
above zero but not more than 30%; |
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International
companies may be of interest to those involved in international
treasury operations, and to large international companies,
which need to show a substantial tax domicile where significant
tax is paid. If the compnay can mmet the requirements of the
authorities, a tax rate between 1% and 30% can be
negotiated, and remains fixed for a period of 5 years, after
which it can be reviewed; |
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Prior
to application for such status, a potential international
company’s business plan is discussed with the administrator
of income tax, including the rate of tax to be applied. The
terms agreed between the applicant and administrator is subject
to ratification by the income tax authority at the time of
formal application for international company status; |
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An
application for international company status by an Alderney
incorporated company must be made prior to the date
of registration of the company’s constitutive documents.
Applications must be in writing but there is no official application
form; |
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An
international company is required to submit annual accounts
to the administrator of income tax
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| Charges |
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Charges
for the setup and maintenance of Alderney companies are as follows: |
| Incorporation
Fee |
£750 |
$1500 |
€1085 |
(one
off charge) |
| Company
Secretary |
£590 |
$1180 |
€850 |
annual
charge |
| Filing
Fee |
£100 |
$200 |
€145 |
annual
charge |
| Compliance
Levy |
£80 |
annual
charge |
| Alderney
Telephone Number |
£50 |
$100 |
€72.50 |
(non-geographic) |
| Accounts
(required, but can be done by another party) |
£250 |
$500 |
€360 |
minimum |
| Directors
fee |
£290 |
$580 |
€420 |
minimum,
if required |
Exempt
tax fee*
*if an exempt tax company |
£600 |
$1200 |
€870 |
| If
you require an internet domain registration to accompany the
formation click here |
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Note:
These prices are correct at the time of writing, but are subject to
change due to the changes currently taking place in the Channel Islands.
If you contact us we can provide an accurate price based on the current
position which might be lower than that quoted above.
Orca Alderney Rating
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| Corporate
registration efficiency |
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| Cost |
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| Confidentiality |
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| Local
banking facilities |
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| Legal
system |
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| Political
stability |
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| Reputation |
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The future corporate tax strategy |
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A new corporate taxation strategy is planned which will enhance the
competitiveness of the Island’s finance sector. The proposals
are that: |
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The
general rate of income tax paid by companies will be reduced
to 0% from 2008; |
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The
profits of certain companies licensed by the Guernsey Financial
Services Commission, (e.g, banks, fiduciaries, insurance,
and fund managers) will be taxed at 10%, but with domestic
and offshore insurers subject to the 0% rate; |
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The
statuses of exempt company and international company will
be abolished with effect from 1st January 2008. after which
all companies will be subject to the 0% or 10% rate
as appropriate; |
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Resident
individuals will continue to pay tax at 20% on assessable
income, including the proportion of the profits of a company
in which they have a beneficial interest. |
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| The current recommendation is that the new corporate tax structure be completely implemented by the end of 2008. However, the exact timing and details will be dependant on competitive pressures and international standards. |
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