Jersey is a separate jurisdiction within the Crown Estate of the United Kingdom. Jersey comprises the island of the same name and several other uninhabited rocky stretches of land close to the north-west coast of France. The island of Jersey is considered the largest in the Channel Islands Archipelago.
These lands have an ancient history. They once belonged to William the Conqueror, Duke of Normandy and since 1066 King of England. After the defeat of the English in the Hundred Years’ War, Normandy was lost, but Jersey remained British, although not part of the kingdom.
Modern Jersey has all the hallmarks of state sovereignty. The island has its own parliament. It has its own systems: financial, legal and judicial. But this jurisdiction has not lost its close political, cultural and economic ties with Great Britain. The means of payment in Jersey is the Jersey pound, whose rate is equal to the British currency. Jersey citizens watch British television, read British newspapers and take their children to schools that follow the same curriculum as the UK.
Entrepreneurs from all corners of the world are interested in Jersey, first of all, as one of the major offshore financial centres. According to some data, in 2019, up to 40% of the island’s gross domestic product was formed in the financial and legal services sector, in which about 24% of the local population was involved.
In today’s circumstances, it would be very difficult to overemphasise the importance of stability. By registering a company in Jersey, you have the opportunity to develop your business in peace for years to come.
The policy of local authorities is always consistent. Parties do not engage in uncompromising political struggles. The island does not have a situation typical of some European countries, when a new government, as soon as it gets the reins of power, immediately cancels the decisions of its predecessors.
As already emphasised, Jersey has its own legal system, tax policy and independent courts. The local currency is the Jersey pound.
The economic position of the jurisdiction can be characterised as favourable. When new threats or opportunities arise in the market, Jersey’s relatively small size allows the regulator, the Jersey Financial Services Commission (JFSC), to react quickly and in close contact with the financial industry.
The Companies Act, which is still in force today, was passed in 1991. On the one hand, it is similar to UK corporate law. On the other hand, the Companies Act is constantly being amended to reflect the realities of the modern world in which the island’s registered firms operate.
The fusion of tradition and new legislative initiatives has given Jersey-based companies a wealth of unique opportunities. In particular, entrepreneurs are attracted to:
Flexibility in the distribution of dividends to company shareholders, particularly when compared to the United Kingdom. Where possible, Jersey allows share buy-backs and redemptions. The directors of registered companies in the island can set dividends based on the company’s 12-month solvency report, which is extremely attractive to beneficiaries of various funds;
It is possible to incorporate a company without specifying the nominal value of the share capital. In this jurisdiction, it will be relatively easy for a company to convert its shares by class and distributions can be made from funds in a bank account set up specifically for share capital;
A local company can be transferred to another jurisdiction, just as a foreign business structure can be re-registered in Jersey;
In most cases, entrepreneurs will not need to have an audit or prepare annual accounts unless they have incorporated a public limited company on the island. Not having an audit or complex final accounts significantly reduces the cost of administering your business.
There is no public register of beneficiaries of companies registered on the island. The lack of publicly available business ownership registers attracts individuals from wealthy families who value confidentiality, as well as private equity firms. The latter require confidentiality at least until the purchase of a suitable local company is finalised.
To invest without unnecessary publicity, European funds and corporations register their company in Jersey or acquire an existing local company that owns the desired asset.
For most Jersey registered companies, the rate of corporation tax is 0%. There are exceptions to this rule, but they only apply to certain types of commercial activity.
Similarly, companies are not charged capital gains tax. No stamp duty is withheld from the purchaser on the transfer of shares in a company.
There is no VAT — value added tax — but there is a small goods and services tax of only 5 per cent. Most international companies operating off-island are exempt from this tax.
A significant number of international firms on the island are taxed abroad, at their place of principal activity. But the zero rates of key taxes themselves are once again eloquent testimony to the flexibility of Jersey’s corporate and tax laws.
An obvious advantage is the location of this jurisdiction on the map of Europe. The island has for decades built close economic ties with suppliers of goods and services, as well as intermediaries and consultants from neighbouring regions. Companies register here to operate both in the UK and in the European Economic Area.
Jersey is also known as an international financial centre with a good business reputation. The JFSC sets the highest quality standards in the fiduciary market by requiring that companies hire only employees with the highest level of professional qualifications.
On the island, a foreign investor can easily find professionals in financial asset management, law and accounting. Locals are more likely to be employed in finance or law.
Corporate law provides the overseas entrepreneur with a wide range of company types to register a business on the island.
Each legal form has its own unique benefits and customisation options, so you can choose the most appropriate type of company for your circumstances and requirements.
One of the features of doing business in Jersey is the variety of forms of companies, partnerships, foundations and trusts that distinguish this jurisdiction from its nearest neighbours on both sides of the Channel.
But unless you are an expert in the corporate law of this island jurisdiction, you may find it difficult to find the right structure to incorporate your business. Fortunately, Imperial & Legal’s advisers have picked out the most popular company types in Jersey for you.
A Limited Liability Company (LLC) or limited liability company is a common form for registering a business in Jersey.
Founding capital
The liability of the members of such a firm shall be limited to their contribution to the share capital which may be made:
In monetary form;
In kind (when property owned by the founder is transferred to the company);
In the form of a financial or other obligation where, in the event of the bankruptcy of a company, the promoter would be obliged to contribute a certain amount of money to repay its debts, transfer some of its property to the creditors, or provide services for a certain, predetermined amount.
The amount of the share capital can be anything from £1. It is common for members of a limited company to specify a start-up capital of £10,000. There is no requirement to pay the share capital before registering a company in Jersey.
Director
An LLC can be managed either by its members, where all decisions in the firm are made by voting, or by an appointed director from among the founders, or by a third party hired into the company as a director.
The structure of such a firm, management methods, distribution of roles and interests of the founders are usually spelled out in the cornerstone document for the LLC – the operating agreement.
Limited Liability Companies are very popular in Jersey also because this legal form allows one person or company to combine the functions of founder and director. If you register an offshore LLC, none of its members must be resident in Jersey.
Secretary
A company secretary must be appointed to such a company from the date of its formal incorporation. The company secretary may be a person resident in the Island or a local company providing such services to businesses under Jersey’s financial services legislation. If you incorporate with Imperial & Legal, we will provide you with a reliable company secretary.
We are also prepared to provide an office for the newly formed company’s registered office, where accounting documents, reports and other important corporate records will be required by law to be kept.
Register of beneficiaries and persons with significant control
Under the new “Financial Services Law” of 2020, members of a limited liability company are required to provide information on directors, beneficiaries and persons with significant control to an official register controlled by the Registrar. The information in the registry is closed to public access and is made available upon official request by the authorities or as a result of an appropriate court order.
As you know, most areas of a Jersey LLC’s business activities are not subject to corporate taxes, so these firms are often referred to as a hybrid of a limited liability partnership and a publicly traded company.
Annual confirmation statement
A Jersey limited company must file a confirmatory return with the Registrar by the end of February each year and pay the prescribed annual fee. This will normally be dealt with by your Company Secretary. Your annual statement should include details of all significant persons in the LLC.
A Jersey company is a corporate structure in the form of a limited liability company (LTD) or limited liability partnership (LLP — to be discussed separately) which is used to incorporate an offshore business in Jersey.
Often overseas entrepreneurs choose to incorporate a Jersey LTD company.
Such a firm is the same as an LLC on most points. Similarly, it can be founded by a single person or a company. Similarly, Jersey company registration requires a registered office on the island, and the founding capital of such a structure starts from £1.
A company director can be a natural person of any state or taxation affiliation. If a company is opened by a person, he can be its manager at the same time, but he is not allowed to become a corporate secretary as well. This function, as in the case of an LLC, is assumed by a separate individual or legal entity — a local resident.
When submitting an annual confirmation statement to the Financial Services Commission, the company representative must give information not only about the management, beneficiaries and persons with significant control, but also about the company secretary.
Each such firm differs from a standard publicly traded company in its ability to create one or more “cells” — portfolios of shares that contain assets and liabilities separate from the shares of the organisation itself, as well as from other “cells”.
Thus, each such portfolio of shares can be considered as a separate business unit within the same company. Each such “cell” will have its own set of constitutional documents.
In Jersey you can register two types of split shareholding companies: Protected Cell Company (PCC) and Incorporated Cell Company (ICC).
The key difference between ICC and PCC is the type of “cell” each cellular company creates.
A portfolio of shares in an Incorporated Cell Company is a separate legal entity, separate from other “cells” and from the company as a whole. Accordingly, such a “cell” and operates as if it were a completely separate company.
A portfolio of shares in a Protected Cell Company has no separate legal personality, but is protected from the obligations of other portfolios of the company and from the obligations of the company itself by corporate law. PCC may enter into contracts on behalf of one such protected “cell”.
ICC and PCC companies are registered as holding structures when it is necessary to divide the assets of the main legal entity. Therefore, companies with divided share portfolios are well suited for opening investment funds.
Limited Partnerships (LPs) or limited partnerships in Jersey are similar in structure to similar companies in the UK. The agreement establishing the LP defines the rights, powers and duties of all its members. A limited partnership can be formed by two or more partners, where at least one must be a general partner and the other a limited partner.
The general partners take over the management of the limited partnership and have unlimited liability for its debts and obligations.
Limited partners have an economic interest in the LP, but their liability is limited to the amount they have agreed to contribute to the partnership or as otherwise provided in the partnership agreement. Limited liability arises because such founders do not participate in the management of the partnership.
A limited partnership has tax transparency, i.e. its profits are not taxed at the company level. Another advantage of an LP is a high level of confidentiality: information about the partners of such an organisation is not made publicly available.
For these reasons, limited partnerships are used by investment funds, private equity and venture capital firms.
In addition to the standard LP form, 2 other varieties of these partnerships are available to entrepreneurs in Jersey:
Separate Limited Partnerships or separate limited partnerships where the individual partners have separate legal personality. They can transact in their own name, although they will still act through the general partner. In a standard LP, the general partner transacts on behalf of the entire limited partnership. A divided limited partnership is also neither a legal entity nor a tax resident;
Incorporated Limited Partnerships also have a separate legal personality, but are also legal entities. This means that the company is officially registered, has perpetual succession and the ability to transact in its own name. The incorporated limited partnership remains transparent for tax purposes.
Such partnerships are used to register complexly structured investment funds and management companies when individual tax treatment is required.
Limited Liability Partnership (LLP) is a limited liability partnership. It limits the liability of the members to the amount of their contribution to the share capital.
An LLP is a separate legal entity but is not considered to be a corporate structure or tax resident in Jersey.
As with a limited partnership, a limited liability partnership memorandum of association is a private document that does not need to be authorised or filed with the authorities. The memorandum of association defines the management of the LLP and the rights and obligations of the partners.
Limited liability partnerships are commonly used as holding companies for professional services entities such as law or accountancy. They are often used to incorporate financial services companies and investment entities in Jersey.
A foundation is a corporate vehicle with a separate legal personality, which can be seen as something between a trust and a company.
Like a company, it can make transactions in its own name, and the fund’s board acts similarly to a board of directors. The fund has no shareholders, but it does have beneficiaries.
The foundation is registered through the founder, who endows the foundation with certain assets, appoints the board and signs the articles of association.
Like trusts, foundations are most often found in private and charitable structures as an alternative to using a trust. In certain situations, foundations may have a number of advantages over trusts. For example, applying a restriction on the right to inform beneficiaries.
A trust is set up when one person (the settlor) transfers assets to another person (the trustee) for the benefit of third parties (beneficiaries) or a specific person, for example, when a trust is set up for charitable purposes.
A trust has no legal personality. All the actions of the trust are carried out by the trustee on behalf of the organisation and all the assets of the trust are held by the trustee. The trustee is usually a Jersey limited company.
Jersey trusts are usually used for private wealth management. A trust is a legal entity but not a formally registered organisation, so trust agreements can remain confidential. The Jersey authorities do not have any formal tools to obtain documents relating to the activities of the trust.
Jersey has 3 rates of corporation tax, depending on the status of the firm and its field of activity, as well as the source of the income: 0%, 10% and 20%.
The general applicable corporate tax rate is 0%.
10%
A 10% tax rate applies to the income of financial services companies in Jersey. A business is identified as a financial services company if the following conditions are met:
The firm is registered under the Act of 1998 regulating financial services: for making investments; for trust management; as an administrator for stock market operations; for holding and registering unregistered fund assets; and as a general insurance intermediary;
The Company is incorporated under the Banking Business Act 1991;
The Company is authorised to act as administrator, registrar or custodian under the “Collective Investment Funds Act” 1988;
The Company has Category A or Category B authorisation under the “Insurance Business Act” of 1996;
The company provides advances or loans to its customers, including:
The provision of funds in connection with the supply of goods by way of hire purchase, lease purchase, or conditional sale or sale on credit, for which a separate charge is made in agreement with the purchaser;
Any assignment by a company of an advance or loan repayable by a customer to a person other than that company.
20%
A tax rate of 20% applies to utility providers located directly in Jersey. For example, this may include telephone, gas and electricity companies.
Companies engaged in the import and supply of oil are also taxed at this rate.
From 1 January 2022, cannabis companies, i.e. organisations involved in the cultivation, processing and distribution of the plant, will be subject to a 20% corporate tax rate.
The 20 per cent tax rate also applies to the profits of Jersey-based major retailers.
In addition, Jersey property income is taxed at this rate, including rental income, profits from property development and income from land exploitation such as quarrying.
Some collective investment funds and securitisation financial institutions may elect to be exempt from corporation tax for an annual fee of £500.
For even more information on how to reduce your tax bill with a Jersey company set up in Jersey, you can book an appointment with the experts at Imperial & Legal!
It is possible to register a company in Jersey remotely using the myRegistry online portal.
This instrument was developed by the Financial Services Commission. It is suitable for the official registration of all the most common types of companies on the island.
However, before you can send an application for incorporation, you need to:
Choose a suitable name for the company;
Rent a registered office in Jersey;
Determine the structure of the business;
Draw up and approve the articles of association and memorandum of association;
Assign leadership;
Hire a corporate secretary;
Appoint nominees (if required);
Prepare documents confirming the identity and residence addresses of beneficiaries, directors and other persons with significant control in the firm.
Knowledgeable business people are under no illusion that they will be able to prepare the documents and successfully register a company in Jersey on their own the first time round. To avoid wasting their money and time, they immediately turn to Imperial & Legal’s advisers.
The following is an example of how we help our clients launch their business in Jersey by registering an LLC — a private limited company.
Your limited liability company must have an original name that does not repeat the names of businesses and trade marks already registered on the island. However, the official name of your company does not have to be exactly the same as the name under which you will conduct your business.
Our staff will check the names you come up with for acceptability and agree with you on one, the most interesting variant.
Even an offshore LLC must be registered in Jersey at a real address. Imperial & Legal will offer you a number of offices that you can list on your corporate documents as your registered office.
At least one shareholder is required to register a limited company. As the JFSC is the financial services regulator in Jersey, it cannot give specific advice on how to structure the shareholding of a future firm.
You will therefore need to make your own judgement, with the help of your accountant or our advisers, on issues such as:
The amount of the authorised share capital declared;
Number of shares;
The par value of each share;
The number of shareholders in a company. How many shares does each shareholder have? What are their financial obligations in this regard? How will profits be distributed among the shareholders?
The memorandum (memorandum of association) and articles of association fix the main parameters of the future company, as well as its structure and management.
Our experts can draft standard statutes to simplify registration on the myRegistry portal, or write a customised memorandum and articles of association tailored to meet the specific requirements of the client.
Both documents must be signed and witnessed on behalf of each incorporator. But unlike other jurisdictions, Jersey does not require the articles of association and memorandum of association to be notarised.
A Jersey limited company must have at least one director. The company can be managed by its founders or by employees.
In an LLC, one of the principals can take over the secretarial functions. If you are registering with our help a small company with one director, a corporate secretary must be appointed separately.
If, for any reason, the level of privacy that Jersey provides is not enough for you, then you will require the services of nominees.
You can rely on Imperial & Legal to select reliable nominees. This is important because in most companies registered on the island, these individuals have access to information about the beneficiaries and directors. They also perform a number of non-burdensome functions in the company. For example, they send an annual confirmation report to the JFSC.
The Financial Services Commission requires accurate information about the beneficial owners of the business, as well as all persons with significant control in the company, including appointed directors. Our specialists will translate as well as certify all copies of supporting documents.
Once all preparations have been completed, with an Imperial & Legal specialist you will create a personalised account on the myRegistry portal and carefully complete the official registration form, upload documents and pay the registration fee.
At every stage you were assisted by our company professionals, so within 5 working days the Registrar will make a favourable decision and send the certificate and you will become the owner of your own company in Jersey.
Our co-operation does not usually end at this stage. Most new entrepreneurs will need to open a local bank account and in some cases a business licence in order to operate. With the help of Imperial & Legal staff, all these and other business tasks are solved successfully and quickly!
You do not need a licence if any of the following conditions are met:
No one, including the owner of the company, receives any payment for their goods and services;
You are an officially registered self-employed person who has a work permit in your place of residence. You have no employees and you work on average less than 8 hours per week;
You have a limited company that employs only 1 person. This person is entitled to work in their place of residence and works less than 8 hours a week;
You have a household. You have hired someone to provide services in your home. For example, a nanny to look after your children or a carer to look after an elderly relative. In addition to caring, the list of unlicensed domestic services includes: gardening, cooking, cleaning and ironing.
A corporate secretary in Jersey has three standard functions:
Maintenance of regulatory documentation;
Recording of minutes of shareholders’ and directors’ meetings;
Organisation of annual general meetings of shareholders.
If you will rent a legal address from a secretary provided by our company, in addition to the above functions, he will take over the processing of incoming correspondence.
The fee depends on how quickly you want to incorporate your company. For a standard 5 working day application process the fee is £200. If you need to resolve the matter urgently (e.g. on the day of application), the fee will be £820.
A standard Jersey LLC memorandum includes its name, registered office, stock information, and shareholder signatures.
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