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How to register business in Jersey?

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.

7 Reasons for setting up business in Jersey

  1. Stability

    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.

  2. Favourable taxation

    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.

  3. Favourable geographical position

    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.

  4. Flexible corporate legislation

    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.

  5. Advanced financial sector

    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.

  6. Confidentiality

    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.

  7. Credibility

    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.

What Kind of Companies Are Starting Up in Jersey?

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:

  1. Limited Liability Company;
  2. Public Limited Company;
  3. Overseas branch;
  4. Cell Company;
  5. Partnership and Limited Liability Partnership;
  6. Trust;
  7. Foundation.

Let us first distinguish between the two main forms of company organisation in Jersey to avoid any further confusion:

  • Jersey company. The most common legal forms for such a business are Limited Liability Company or Limited Liability Partnership;
  • JerseyLimited Liability Company (LLC). This form emerged in Jersey recently, but people already use it to start offshore businesses.

There are clear differences between a Jersey company and a Jersey LLC.

Features of the Jersey company:

  1. The most popular option for incorporating a company in Jersey is a limited company (Ltd);
  2. You must have a minimum of one director or one shareholder to establish an offshore limited company. The director can be an individual of any nationality;
  3. A Jersey company must have at least £1 as share capital. The typical share capital declared by companies listed on the island is £10,000;
  4. Every year, offshore entities that are registered in Jersey are required to submit to the Registrar updated company details or verify that the previous year’s information is up to date. Here is what you need to tell the authorities:
    • The directors’ names and addresses;
    • The place where the company carries out its main activities;
    • Information on the founders and their share in the share capital.
  5. Appointment of a secretary. Usually, the lawyers you hire to register your business on the island will offer you secretarial assistance through their partners. Any individual or organisation of any country can carry out the duties of the secretary. Unfortunately, the sole director of an offshore company cannot be its secretary at the same time;
  6. An offshore company must also have a registered office in Jersey;
  7. If the beneficial owner of an offshore company changes, it is important to inform the Jersey Financial Services Commission as soon as possible.

Key Features of the Jersey LLC

An LLC is something in between a Jersey company and a partnership. Here’s why:

  1. An LLC has the legal ability to buy and sell assets under its name, take on debts and responsibilities, take legal action and bear liability, but it’s not a separate legal entity;
  2. A Limited Liability Company or its abbreviation, LLC, must be added to the name of a company;
  3. To start an LLC, you need at least one founder who does not need to be a Jersey resident. The liability of the members is usually limited to their contribution to the LLC, which is the sum they have agreed to provide under the agreement when setting up the LLC;
  4. The agreement to form an LLC must be in writing and comply with the laws of Jersey. This document is also known as an operating agreement. It allows to classify LLC members into different groups based on their contribution to the business, voting rights, etc. The LLC agreement comes into effect when the LLC is officially incorporated;
  5. The members determine their share of profits by how much they invested or divide the LLC’s profits and losses among all members according to the LLC agreement;
  6. Managers are chosen from existing members or hired specifically to manage a company. If there is no appointed manager in a limited liability company, all shareholders are responsible for managing the LLC as per the relevant LLC agreement;
  7. An LLC is considered insolvent if it is unable to repay its debts within the time periods specified in the relevant agreements. No special declaration is required and there is no need to wait for 12 months to declare a company insolvent, unlike a typical Jersey offshore company;
  8. An offshore company in the form of an LLC must keep and provide, upon request from regulatory authorities, the following incorporation documents:
    • Information on the name and address of each shareholder and company director;
    • A copy of the LLC declaration;
    • A copy of any additional statement submitted to the Registrar in accordance with Jersey’s LLC Law;
    • A copy of the company’s certificate of formation;
    • A copy of the LLC agreement with each subsequent amendment;
    • A statement outlining the amount of the agreed contributions and the time for such contributions;
    • A statement on each member’s contributions, including the amount of money, any property or services they provided, and the date(s) of these contributions;
    • A statement on the amount of contributions returned to members and the dates when they were returned.
  9. Furthermore, in accordance with local regulations, the management of the LLC must maintain records of the ultimate beneficial owner’s information.

Jersey Corporate Taxation

Offshore companies not resident in Jersey for tax purposes are exempt from corporation tax if their activities are not related to:

  • Property management and rentals (corporation tax is 20%);
  • Utilities (e.g. gas, water, electricity, waste collection). There is a similar corporate tax of 20%;
  • Banking, insurance, trusts and other financial services (the corporate tax rate is still 20%).

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.

How to Register Offshore Company in Jersey?

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:

  1. Deciding on the structure of the future company. You need to identify who will be the director, how many members the company will have, and what legal form will be suitable, etc;
  2. Reserving a name for the company. At this stage, Imperial & Legal are making sure that the name meets all the regulatory requirements and is yours for the next six months;
  3. Submitting a formal declaration to the Jersey Financial Services Commission to approve the upcoming formation. At this point, information about ultimate beneficial owners is provided to the JFSC. This includes their names, home addresses and occupations, along with the evidence that their professional record is clean;
  4. Drafting the firm’s incorporation documents including articles of association and memorandum. It is common to use model documents. However, you if want to customise Articles of Association and Memorandum of Association for a Public Limited Company, our advisors can help you draft them. At this stage, a registered office is usually rented, and a secretary is hired. Once the incorporation documents are prepared, our advisors will diligently fill in an application form and submit it with the required paperwork to the Registrar;
  5. Submitting an application and company incorporation. As you have been assisted by Imperial & Legal in the previous steps, your application will be approved within two days. We will send the certificate of formation, along with the necessary legal and financial paperwork, via courier to the address given by our client.

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.

FAQs about registering business in Jersey

What else do I need to register an offshore company in Jersey apart from the Memorandum and Articles of Association?

In addition to the Article and Memorandum, the registration application must also include:

  1. Notarised copies of passports and proofs of address (e.g. utility bill) for all directors, shareholders, and beneficial owners of the future company;
  2. Confirmations of creditworthiness and non-bankruptcy (neither personal nor business) for all beneficiaries and shareholders of the company to be established;
  3. A power of attorney authorising a representative of Imperial & Legal to register a business in Jersey on behalf of the founder.

The latter document is only required if you don’t intend to visit Jersey in person and are registering your company remotely.

When does a firm registered on the island require a licence?

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.

Do I need to employ a secretary separately if two directors are appointed to a Jersey offshore company?

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.

What is the purpose of setting up offshore trusts in Jersey?

With a Jersey trust, companies and individuals can achieve the following objectives:

  • Profitable ownership of various assets, including property, ships and aircraft;
  • Structuring participation in investment and family funds;
  • Hiding details of the beneficial owner;
  • Protecting assets from foreign creditors and legal claims;
  • Minimising tax payments in a legal way;
  • Owning different companies through which different assets with different levels of risk are held in trust. In other words, in this complicated way, international entrepreneurs separate high-risk assets from safe assets.

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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