An Offshore Gem, Cracked.
If you are looking for peace & safety within our ever changing world – perhaps the little unknown island of Alderney can be a great place for you. Alderney boasts it’s community-focused, safe, common law British culture, quality of life & active lifestyles. Some local third parties have created resources to know how to relocate there more easily to attract like-minded families. With only a population of around 3,000 people, it’s a close-knit island that supports one another with some beautiful sceneries year round.
The island is in the unique position of having super-fast broadband connectivity, ideal for the ever evolving digital world. In 2018, the connection upgrade by Sure Almost doubled the average speeds of previous connectivity, meaning increased support for local businesses, social networking, communication between individuals and friends, and enabling children and adults to learn. Solid Internet plus Amazon delivers there as well to really live up the zero VAT experience.
Company Niche
Alderney has the perfect infrastructure to give small to medium sized businesses what they need, given the substantial investment in the islands broadband connectivity in the last two years, there is a natural fit with eCommerce companies, geographically portable businesses and other online employment ventures. The island’s business environment, in particular its user-friendly company law, has been a key factor in the success of the island’s eGaming industry which is world renowned.
Company Rules
Alderney companies are governed by the provisions of the Companies (Alderney) Law, 1994 which may be viewed at www.guernseylegalresources.gg
Some of the features of the Law include: SCROLL DOWN IF NOT INTERESTED
- Incorporation may only be effected by using the services of a licensed Corporate Services Provider
- A minimum membership of one person which may be a natural or legal person
- A company shall at all times have a registered office in Alderney where all legal process concerning the company may be served and to which all other communications and notices to be given to the company may be delivered or posted.
- A minimum of two officers, which may be corporate if required (if public)
- Each founder member is the owner of at least one share in the company;
- Provision for share capital in any currency (no requirements)
- Private Companies require one director; Public companies two (requirements for everyday operations different between public and private). Every company shall have a secretary. A sole director of a company shall not also be the secretary thereof.
- No company shall have as secretary a body corporate the sole director of which is a sole director of the company.
- Private companies: enter the name of any person in its register of members so as to increase the number of its members beyond 20
- Each incorporated company requires a sign displayed at the registered address
- If the company’s first general meeting is not held within a period of 3
months immediately following the day on which the company was incorporated, the directors shall appoint the first auditors as soon as possible after the expiry of that period - They have their own registry independent of Guernsey’s (even though taxes are collected in Guernsey).
Other Features for Offshore Pals
- Register of Beneficial Ownership (private)
The Registrar keeps a separate Register of Beneficial Ownership which is not available for public inspection and can only be accessed by authorised entities in specific situations governed by the provisions of The Beneficial Ownership of Legal Persons (Alderney) Law 2017 and associated Regulations which may be viewed at guernseylegalresources.gg
- No tax on Trusts whose beneficiaries live outside the island
- No Inheritance Tax, No Capital Transfer Tax, No Capital Gains Tax, No Value Added Tax (VAT)
- A maximum of 20% Personal Income Tax on worldwide income – Alderney’s tax is administrated by Guernsey
- One person may form a company.
- No Corporation Tax (exceptions include specified banking activities, regulated utilities and income derived from Guernsey properties; at 10-20% depending)
- Government fees for companies are 170 GBP a year. Very competitive. (However this does not factor in the registered agent fees & others).
Everything looks quite good, a zero tax, relatively affordable, not too bureaucratic, private company
Update for Residents!
From 1 January 2024 the cap has been increased to £65,000 and this amount will apply to anyone who qualifies for the Alderney cap for the first time in 2024 with any subsequent years charged at the relevant Alderney cap amount as set by the States of Deliberation (there is a tax cap of 50,000 GBP but this expires in 2025).
Real Offshore Experience
In our experience, receiving corporate help in Alderney is quite challenging given their obsession to neatly abide by all sorts of regulation placed upon them. Reaching out to someone to incorporate there will cause you to hear the questions: Why here? What is your business? Who are your shareholders? What do you plan on doing anyway? to which they say, only after they receiving your reply will they “gauge if the business fits their risk profile”
In other words, they won’t even help you form a company if ‘they’ believe it fits an arbitrary definition of “risky”. I wrote about this with respect to banking (photo below), but never regarding company formation. Its a strange business (since you require a corporate service provider to incorporate) plan who will find every reason to ‘not’ accept you & your money if you’re not living there. How do they stay in business?
I really have never seen such a reply. “Prove to me you’re worthy of this jurisdiction and not going to harm us”. It’s worth noting too that despite my failures to identify economic substance rulings pertaining to “relevant sectors” in Alderney law–they are apparently under the full legal framework of the Guernsey Financial Services Commission. So, there’s no loophole unfortunately.
Aside from this feedback, it’s quite difficult to hear back from any other corporate service providers. The replies have either been “Seek legal help first then contact us” or nothing at all.
Alderney does famously hold e-gambling licenses, however the costs are certainly not cheap. One would need to begin with approximately 750,000 USD minimum in capital to make it feasible (and this is assuming the lower charges apply) in my estimation. I cannot speak to the specifics of the gambling licensure, but from what I can tell, there are cheaper jurisdictions in the Isle of Man, Malta, Curaçao who offer professional services, too.
The need for a company sign advertisement resembles Arizona’s law of requiring an advertisement for your company–it’s not a deal-breaker but its an added expense, especially if all your clients are outside of Alderney which is likely given it’s 3K population.
Public companies require more stringent governance and require an audit every year (plus the meeting requirements).
Closing
On the surface, Alderney has a lot of interesting features from tax, safety, friendliness, high-speed internet and overall quality of life. If we solely hone in on creating an offshore company there, it’s a completely unwelcoming jurisdiction with more hassle or costs than what it’s worth. This may differ if you relocate and run a real on-the-ground business, however for an offshore jurisdiction, there are superior solutions. Alderney still holds zero tax, privacy, low government fees & may fit a portfolio for a niche purpose or for diversification.
Alderney has been roped in with the same anti-business regulations that ultimately are destroying all “tax-neutral” jurisdictions as a viable alternative for even the wealthy. Sure it still works, but many seriously question, is it worth it? Economic substance, surveillance, carefully choosing who is allowed to bank/incorporate, residency requirements, increases in tax (although small) & generally a regulatory environment where all the service providers are so scared to trip any wires. In my opinion they continue to destroy their own industry. There’s simply superior choices. For instance, Cayman Islands have implemented all the measures as well but have taken a flexible open approach to retain their industry.
Please note. None of this is to comment on living–which I can only imagine is lovely & underrated (especially for extremely wealthy individuals taking advantage of the 65,000 GBP tax cap!). Alderney is a very safe, a close-knit place with elements of French cuisine, the British sensibilities and sea-side beauty. I hope to get soon enough so I can upload it to On The Ball Travels & write all about it for you!
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