Jersey is a British crown dependency in the English Channel consisting of an island bearing the same name and a few small, uninhabited islands. Jersey is the biggest island among the Channel Islands.
This area has been under the rule of British monarchs since the Middle Ages and has a distinctive legal position. Jersey cannot be called a fully independent state. Even though it receives protection from the British monarchy, it is not part of the UK. Jersey has its own laws, parliament and prime minister, although it follows the rules of the UK Parliament. Jersey also prints and mints its own pounds.
For UK and foreign business owners, Jersey is recognised as a highly beneficial tax haven and a significant financial hub.
The island has a population of over 100,000. Jersey’s government is cherished by the locals as it mostly consists of independent Members of Parliament. There is little political conflict between the parties there. Once in power, no one can change the decisions of their predecessors. Therefore, foreign businesspeople and investors can safely generate profits for many years through offshore companies and trusts established on the island. They don’t need to worry that a populist might attempt to impose stricter business regulations in the future.
Most offshore companies registered in Jersey don’t have to pay corporation tax on their revenue, and they are also exempt from capital gains tax. No stamp duty is payable when shares are transferred from one owner to another. Some commercial activities on the island are exempt from VAT, but there is a 5% tax on goods and services.
Unlike many other tax havens, Jersey is in close vicinity of EU countries and the United Kingdom. This has been greatly valued by local businesspeople and financiers, as well as by individual and business investors from England and Europe.
The Companies (Jersey) Law was enacted in 1991 and has since been amended several times to reflect the latest changes. Only one principle has stayed the same — to make sure that starting a business is as easy as possible. Hence, companies registered on the island, except for public ones, are not audited and do not provide annual accounts. This helps reduce costs for the business owner and makes business management simpler. Registering a business in Jersey can be done online and, with good legal advice, does not take much time or money.
It is estimated that around 40% of Jersey’s government revenue comes from the financial and legal services market. Major international banks have representative offices in this jurisdiction. Banking institutions on the island are reliable and offer a customer-focused experience for their clients, like those found in the UK.
There is no public register of business ownership on the island, so you can set up a company privately. This is appealing to wealthy non-UK citizens who manage their funds through offshore trusts, as well as to businesspeople and foreign companies. Nominee services are also available in this jurisdiction if required.
Over the past few years, the Jersey authorities have taken a number of steps to improve the reputation of the business community. At the same time, the government is unwilling to give up the money generated by offshore businesses, so any changes have so far had little impact on the interests of such companies. Nevertheless, the process of opening a bank account for a company on the island still involves strict due diligence of the potential customer.
Jersey is a good place to start a business and trusts for the following activities:
Financial services;
International trade, for example, with neighbouring France and Great Britain;
Buying and selling properties abroad;
Licensing (intellectual property management);
Investment funds;
Indirect acquisition of companies and assets in other countries for further tax optimisation and maintaining confidentiality.
The company law of this jurisdiction allows an entrepreneur to choose between many forms to incorporate a business:
Let us first distinguish between the two main forms of company organisation in Jersey to avoid any further confusion:
There are clear differences between a Jersey company and a Jersey LLC.
An LLC is something in between a Jersey company and a partnership. Here’s why:
Offshore companies not resident in Jersey for tax purposes are exempt from corporation tax if their activities are not related to:
Companies that are tax residents in Jersey pay a fixed tax rate of 20%regardless of where their revenue comes from.
There is no VAT in Jersey. However, there is a 5% tax on goods and services sold on the island.
No stamp duty is required when transferring ownership of assets like shares.
There is no tax on imported capital, capital gains, and dividends.
The process of registering an offshore business in Jersey is straightforward and does not usually take more than two weeks, provided you seek professional help from the beginning.
Imperial & Legal, a legal advisory firm based in London, has extensive expertise in setting up businesses in offshore jurisdictions. They split the registration process into five simple steps:
Once the registration is finalised, we keep in touch with our clients, many businesspeople come back to us for advice. This happens when they need to open a bank account with one of the international banks based in Jersey.
In addition to the Article and Memorandum, the registration application must also include:
The latter document is only required if you don’t intend to visit Jersey in person and are registering your company remotely.
Almost any activity carried out in Jersey is subject to licensing: production, selling and provision of services.
Even if your business operates mainly overseas but occasionally sells in Jersey, you will still need to apply for and obtain a licence from the Department of Business Licensing.
No, you don’t. If an offshore company is managed by two directors instead of one, one of them has the right to act as company secretary at the same time.
With a Jersey trust, companies and individuals can achieve the following objectives:
Trusts are also used by wealthy older people to ensure that their heirs do not pay exorbitant UK inheritance tax. A Private Trust Company is usually used for these purposes as it acts as a trustee of a trust or a group of related trusts. The board of directors of a Private Trust Company may consist entirely of members of the founder’s family.
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