The vote was unanimous, according to a Guernsey Finance spokesman who attended the hearing.
The legislation now goes to the UK’s Privy Council for final ratification. As the Privy Council does not meet in August or September, the earliest it is likely to approve the legislation will be at its October session, sources said. Once this happens, the law would take effect.
Guernsey Finance, the marketing arm of Guernsey’s financial services industry, says the creation of a foundations structuring option will provide Guernsey’s fiduciary sector and its clients “with additional choice and flexibility when setting up wealth management structures in the island”.
The organisation is planning to hold a seminar explaining what foundations are and how they work in London in September.
Foundations are seen as appealing to investors from countries with a civil law tradition, such as France and certain countries in the Middle East, who are often unfamiliar with trusts and in particular, their concept of the separation of legal and beneficial ownership.
In pushing ahead with the foundations law, Guernsey is following in the footsteps of both of its Crown Dependency siblings – and sometime rivals – Jersey and the Isle of Man.
Jersey was the first of the three to see a foundations law approved, in 2008, and saw its first five foundations established the day the foundation law came into force on 17 July 2009.
Currently the Jersey Financial Services Commission’s website lists some 173 foundations, up from 94 in May of 2011.
The Isle of Man’s entry into the foundations club is more recent, with a law enacted last year that came into force on 1 Jan of this year.
In February, Gibraltar’s then-new minister for financial services, Gilbert Licudi, said the overseas British territory was also planning to introduce a foundations law, as part of a package of measures aimed at boosting its financial services industry.
For jurisdictions like Jersey, Guernsey, the Isle of Man and Gibraltar, the introduction of foundations is seen as important in enabling their resident companies to compete in the global offshore financial milieu.
In addition to Jersey and the Isle of Man, some other jurisdictions currently offering investors the foundation option include Switzerland, Liechtenstein, Austria, Labuan, Malta, Panama, the Bahamas, the Netherland Antilles and St Kitts & Nevis.