ONE of the best-known and popular offshore jurisdictions with Hongkong people is the Channel Islands. In the southern part of the English Channel near to the northwest coast of France, the main islands are Jersey, Guernsey, Alderney and Sark. With a population of about 150,000, these islands are part of Britain but retain a great deal of autonomy, including their own parliaments, legal and tax systems. They are politically stable, have an efficient and respected regulatory system and highly developed infrastructure. The islands operate a free enterprise economy with no major restrictions on foreign investment or exchange controls. The Channel Islands offer low-tax regimes. There is a simple single rate income tax structure, no capital gains, inheritance, capital transfer, wealth, gift, withholding or value-added taxes. Overseas interests such as deposits and investment are regarded as being non-resident and treated favourably when it comes to taxation, making them good vehicles for private investment holdings. The tax treatment of trusts is also very favourable. Newcomers in the financial industry are carefully vetted and subject to strict regulation via the Financial Service Department and an annual licensing arrangement. The stated goal of the islands is to attract only quality business. Jersey is highly respected in the offshore industry and is regarded by many as Europe's offshore banking capital. While it has been attracting wealthy individuals since Napoleonic times, it is only really the last 30 years that it has developed into a leading offshore financial centre. Hill Samuel, the merchant banking arm of TSB Group plc was the first merchant bank to establish in Jersey, following an invitation by island authorities in 1961. The arrival of Hill Samuel set a precedent for other merchant banks, according to Barry Lea, Hill Samuel's director of financial services and marketing in Asia. ''No one at that time could have foreseen that Hill Samuel's arrival marked the beginning of an enormous financial services industry which now contributes almost 50 per cent of the island's gross domestic product''. Hill Samuel is one of over 60 registered banks and building societies on the islands. The services offered by Jerseys' financial institutions include trust, investment, fund management and banking services. Hill Samuel banking services include call and fixed deposits, high interest cheque deposit accounts, currency dealing and advisory services, a specialised money management service, loans and bridging facilities, provided for individuals and companies. Mr Lea said that over the years, Hill Samuel had established various subsidiary companies in Jersey to provide one of the most comprehensive range of financial services offered by any of Jersey's banks or investment houses. ''Hongkong-based clients can access investment management services in its widest form covering international bonds or equity and/or fixed interest portfolios, as well as funded investment through a range of collective investment schemes. Hill Samuel (Channel Islands) Trust Co Ltd has been providing a specialist range of trust and company services for more than 20 years. Typically, these include the provision of advice and assistance with the establishment and administration of trusts, company formation and management services, often in conjunction with a client's legal or other professional advisers. While many trusts and companies are established under modern Jersey laws, it is common for such vehicles to be written under foreign laws, but administered from Jersey. Hill Samuel in Hongkong is also able to arrange the incorporation of companies, creation of trusts and settlement and the administration of both in other jurisdictions. Information supplied by Hill Samuel.