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The Island of Jersey is situated in the
British Channel Islands in the Bay of St Malo approximately 19 miles
from the French coast. It is a British Crown Dependency
The legal system is based on English common law and local statute.
Companies incorporated in Jersey are regulated by the Companies Law
1991 which emulates the English Companies Act 1948. However, there
are no forms of Jersey companies comparable to those of English
companies limited by guarantee or unlimited companies. A Jersey
private company is classified as any company that is not a public
company.
There are several offshore business vehicles the most popular being
the Exempt Private Limited Liability Company, the advantage of such
a formation is total exemption from taxation on foreign income; the
International Business Company has a similar advantage but tax is
levied on foreign income at a low rate. The Limited Partnerships and
Trusts are other entities utilized for tax avoidance.
Advantages of the Jersey Offshore Company Formation
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Company Formation expertise |
Excellent |
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Charges |
Good |
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Secrecy |
Satisfactory |
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Banking services |
Good |
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Legal system |
Excellent |
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Political stability |
Good |
Prestige
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Excellent |
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Investors are attracted to the
jurisdiction because of its political stability, low taxes and
international credibility and good transport communications. However,
the administration has adopted a protectionist approach. Foreign
business and investors are only encouraged if they contribute
positively to the jurisdiction's services and business.
Offshore Company
Formation Formalities
There are some restrictions to the offshore entities trading
activities in Jersey. International Business Companies must not
conduct businesses with Jersey residents, but are not otherwise
specifically limited. Exempt Private Companies, are permitted to
conduct their activiites on the island as long as there is no
established place of business.
There is no specific minimum capital requirement. In most cases, a
registration agent will only issue two shares.
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- Jersey companies require a local
registered office for service of process.
- Registered and bearer shares can
be issued.
- There must be at least two
directors in a Jersey company and directors must be real people.
- Public anonymity can be obtained
by the employment of nominee directors/shareholders.
- A full register of members and
charges must be kept at the registered office in Jersey.
- The company name must end with
either Limited or Public Limited Company.
- No accounts or annual summaries
need to be filed with the Jersey Government in the case of Exempt
companies.
- Jersey residents must not have any
direct interest in the shares of an exempt company, but may own
shares in a company which does.
- The exempt company's beneficial
owners must be disclosed to the Financial Services Commission
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Trusts
There is no registration requirement for Trusts and no fees are
payable. All Trust documents are normally in English. The trustees of
a non-resident trust whose beneficiaries are non-resident are not
required to submit returns or provide accounts of the trust to the
Comptroller of income tax. Trust accounts must be maintained but audit
is not required.
Trusts are exempt from tax on foreign income and Jersey bank interest
provided that the settlor, life tenants and beneficiaries are not
resident in Jersey. However, matters become somewhat complicated if
some of the beneficiaries or life tenants are Jersey residents, the
picture then exemption may be partly or wholly lost.
The Jersey Trust is impenetrable from foreign judgments and
Inheritance laws.
Taxation
There are no capital gains taxes, capital transfer tax, purchase or
sales tax or VAT. Stamp duties are levied on the transfer of immovable
property (up to 1%) and individual parishes levy property taxes.
Income tax is levied at 20%, and employees social security
contributions are payable. Property owners and occupiers are also
liable for parish taxes.
The rate of Jersey corporate income tax is 20%; but for International
Business Companies' The Jersey income tax rate is 30%. Resident 'income
tax' companies pay full income tax on their world-wide income,
International Business Companies are liable for full income tax on
their income arising in Jersey. Exempt companies pay full income tax
on their income arising from an established place of business in
Jersey. Jersey branches of foreign corporations pay full income tax on
income arising in Jersey if they are managed and controlled outside
the island; otherwise it is treated as a Jersey resident 'income tax'
company.
Jersey partnerships are liable to income tax, and the calculation of
tax due is along similar lines to that for company profits. Foreign
partnerships where control and management takes place abroad are
charged tax only in respect of Jersey income Foreign Partnerships are
not liable for tax on foreign income
An exempt company or an IBC is not obliged
or entitled to deduct tax when paying interest or royalties to
non-residents. For all companies, interest and royalty payments are
deductible as trading or management expenses when calculating the
profits chargeable to income tax, although mechanisms vary. There are
some limitations on the deductibility of interest paid abroad by
resident 'income tax' companies. Deposit interest from Jersey banks
payable to non-residents is exempt from Jersey income tax.
Banking Law
There are over 60 major international banks in Jersey, most
subsidiaries of the major clearing banks predominately providing
services to Foreign Nationals and expatriates.
Employment Law
Steps are currently being taken to consolidate existing employment law
to introduce a Jersey Conciliation and Arbitration Service, and
Industrial Tribunals.
Nationals of European Union member states have free right of movement
in Jersey for the purposes of work and establishment. Non EU nationals
must apply to the States Defense Committee of the Aliens Office for
permission to reside or work in Jersey.
Geography People and Culture
Jersey’s climate is temperate with mild winters and cool summers. The
terrain is gently rolling plains with low, rugged hills along the
north coast. The population is 90,502 (est. July 2004 est.) with the
ethnicity broken down as UK and Norman-French descent. English and
French are official languages and Norman-French dialect is spoken in
country districts.
Immigration and Residency
Nationals of European Union member states have free right of movement
in Jersey for the purposes of work and establishment. Non EU nationals
must apply to the States Defense Committee of the Aliens Office for
permission to reside or work in Jersey. Generally a work permit will
be granted only if no suitably qualified local exists. Preference is
given to UK and other European Union nationals.
However, long-term residency in Jersey is
carefully controlled; with certain exceptions consent for residency
will be given only to a person owning a residence, and in turn the
purchase of a residence is subject to consent, which is given in only
a limited number of cases, usually involving a luxury dwelling or an
individual who is clearly going to contribute significantly to the
island through payment of local taxes.
Legal and Political System
Jersey has no political parties, Cabinet or Prime Minister. Queen
Elizabeth II is the Chief of State and is represented on the Island by
a Lieutenant Governor and Commander in Chief (Air Chief Marshall Sir
John Cheshire since 24 January 2001) and Bailiff (Philip Martin
Bailhache since February 1995). Jersey is self governing in all
matters except defence which is the responsibility of the United
Kingdom.
The government is conducted by an Assembly of the States through
committees of the States that have delegated administrative and
executive responsibilities. The States currently is made up of the
Bailiff, the Lieutenant Governor (who is not allowed vote),12 senators,
12 parish constables, 29 deputies, the Dean of Jersey (who also does
not have a vote), and as advisers, the Attorney General and the
Solicitor General. The Bailiff is the President of the Assembly and
acts as its Speaker. He is also president of the Royal Court. The
Bailiff has no political power but has the right to speak in the
Assembly for the purpose of ensuring orderly debate. He also has a
casting vote, which, by tradition, is used to maintain the status quo
and allows the Assembly to reconsider the matter at a later date.
The Attorney General and the Solicitor General are the Law Officers of
the Crown and are appointed by the Crown. They have the right to speak
but cannot vote. Points of law raised in debate are often referred to
them for explanation and clarification.
Economy
The Jersey currency is the pound which is on a par with the British
pound; there are no exchange controls.
The economy is based largely on international financial services,
agriculture, and tourism. Potatoes, cauliflower, tomatoes, and
especially flowers are important export crops, shipped mostly to the
UK. The Jersey breed of dairy cattle is known worldwide and represents
an important export income earner. Milk products go to the UK and
other EU countries. In 1996 the finance sector accounted for about 60%
of the island's output. Tourism, another mainstay of the economy,
accounts for 24% of GDP. In recent years, the government has
encouraged light industry to locate in Jersey, with the result that an
electronics industry has developed alongside the traditional
manufacturing of knitwear. All raw material and energy requirements
are imported, as well as a large share of Jersey's food needs. Light
taxes and death duties make the island a popular tax haven.
Legislation relating to
offshore and non-resident business
If you require more information on any particular statute please
contact us.
Banking Business (Jersey) Law 1991
Banking Business (General Provisions) (Jersey) Order 1991
Collective Investment Funds Law 1988
Companies (Jersey) Law 1991
Companies (Amendment No.6) (Jersey) Law 2000
Income Tax(Jersey) Law 1961
Insurance Business (Jersey) Law 1996
Insurance Business Law (General Provisions) (Jersey) Order 1996
Limited Partnerships (Jersey) Law 1994
Trusts (Jersey) Law 1984
Terrorist Financing Order 2001
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anonymity