Knowledge

Guernsey has seen increased interest from limited partnerships (particularly funds) wishing to migrate to Guernsey from other jurisdictions. In a move that illustrates Guernsey's ability to be nimble in responding to industry opportunities, The Limited Partnerships (Guernsey) (Migration) Regulations, 2020 (the "Regulations") came into force on 30 July which formalised the continuance of overseas limited partnerships wishing to migrate into Guernsey. The Regulations also enable Guernsey limited partnerships to migrate out of Guernsey.

Migration to Guernsey

The partnership continues
The Regulations make it clear that migration does not create a new legal entity. Rather, the foreign law limited partnership 'continues' in Guernsey as a Guernsey law limited partnership. No partnership interests are affected and all of the limited partnership's rights and obligations continue with it. The overseas limited may elect to have separate legal personality upon migration into Guernsey.

A simple process
The Regulations have been drafted to provide for a straightforward process. The certificate of registration issued by the Guernsey Registry is conclusive evidence that the limited partnership has been registered in Guernsey with effect from the date set out in the certificate.

No LP consent
The migration process does not require limited partners to consent to the migration. However, this may be a requirement of the limited partnership agreement or the overseas jurisdiction.

Funds structured as limited partnerships
An overseas fund structured as an overseas limited partnership will require consent from the Guernsey Financial Services Commission ("GFSC") to enable it to continue as a fund in Guernsey. The timing of the migration can be arranged to coincide with GFSC consent.

Other considerations
The migration of the overseas limited partnership to Guernsey must be authorised by the rules of the overseas jurisdiction.

The overseas limited partnership cannot be registered in Guernsey unless, it would immediately after registration, satisfy the solvency test in the Regulations. Similarly, an overseas limited partnership cannot be registered in Guernsey if it is being wound up or dissolved, in liquidation, insolvent or if it has entered into an arrangement with its creditors.

While it is not a requirement for a Guernsey limited partnership to have a Guernsey general partner, Guernsey law already permits the migration of overseas companies into Guernsey.

Migration from Guernsey

The partnership continues
It is a requirement of the Regulations that the Guernsey limited partnership migrates out for the purpose of becoming registered as a limited partnership under the law of a place outside Guernsey. Upon compliance with the procedure in the Regulations, the limited partnership shall be deleted from the register of limited partnerships and it shall cease to be a limited partnership for the purposes of the Limited Partnerships (Guernsey) Law, 1995. No partnership interests are affected and all of the limited partnership's rights and obligations continue with it.

A simple process
In addition to filing the application with the Guernsey Registry, the general partner of the Guernsey limited partnership must provide at least 28 days' written notice of the proposed migration to all creditors.

No LP consent
The migration process does not require limited partners to consent to the migration. However, the Regulations provide that the Guernsey limited partnership must comply with its partnership agreement.

Funds structured as limited partnerships
A Guernsey fund structured as a limited partnership will require GFSC consent to enable it to migrate out of Guernsey.

Other considerations
The Guernsey limited partnership cannot be removed from the register of limited partnerships in Guernsey unless, it would immediately before migration, satisfy the solvency test in the Regulations. Similarly, the Guernsey limited partnership cannot migrate out if it is being wound up or dissolved, in liquidation, insolvent or if it has entered into an arrangement with its creditors.

How we can help
Bedell Cristin can provide Guernsey advice on all aspects of migration to Guernsey. If you would like further information or wish to discuss migrating a limited partnership to Guernsey, please do get in touch.