Jersey


Jersey history is influenced by its strategic location between the northern coast of France and the southern coast of England. The island's recorded history extends over a thousand years tracing back to Palaeolithic Age. In the 9th century Jersey was invaded by Vikings, and was eventually annexed to the future Duchy of Normandy. King John lost all his territories in mainland Normandy in 1204 to King Philip II Augustus, but retained possession of Jersey and the other Channel Islands. The islands have been internally self-governing since then. During World War II, Jersey was occupied by Germany from 1 July 1940 until 9 May 1945, when Germany surrendered. The event which has had the most far reaching effect on Jersey in modern times, is the growth of the finance industry in the island from the 1960s onwards.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

3 750 USD

5 115 USD

5 615 USD

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Contact method: and / or

Core Services

3 750 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

included

— Annual government fees

Stamp Duty and Companies Registry incorporation fee

6 500 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

120 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

500 USD

— Apostilled set of Statutory documents

Optional services

990 USD

Nominee Director

Paid-up “nominee director” set includes the following documents

375 USD

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Tax Return

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

150 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

250 USD

For client with high risk Status

Cost of incorporation, including first year servicing 3750
Cost of nominee director services per year, including an apostilled set of documents 990
Cost of nominee shareholder services per year, including an apostilled set of documents 375
Cost of annual service, starting from the second year 6500
Open account in 26785
Incorporation timescale for a turnkey company 2 days
Country 26661

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
118.2 sq. km 97,857 (2011) Saint Helier 5.7% (2013) no data
Location Western Europe
National currency Pound sterling
Conditional reduction of currency GBP
Against USD 0.6
Climate, average max and min t° Temperate; mild winters and cool summers; avg. maximum temperature (July) +30°; avg. minimum temperature (January) 0°
Time difference from Moscow - 4 hours
Dialing code +44
State language English, French
Ethnic groups Jersey 33%, other Britons 31%, Portuguese 14%, Polish 13%, Irish 2%, French <1%
Literacy rate 99%
Credit rating AA
Government type Parliamentary democracy
Executive branch Council of Ministers headed by Chief Minister
Legislative branch Assembly of States of Jersey (51 members)
Judicial branch Royal Court, Court of Appeal
GDP per capita rank 7 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
No mixed, largely based on English Common Law, with many French features 2 days No Yes
Types of entity private company limited by shares; public company limited by shares; branch of overseas company; general partnership; limited partnership; trusts; foundations; protected cell companies
Incorporation timescale for a new company 1 day
Company suffix Limited or Avec Responsabilité Limitée or the abbreviations Ltd and a.r.l.
Sensitive words bank or bankers, investment, corporation, international, associate, association, fund, trust, trustee, united, royal, Queen and King; currency symbols or currency abbreviations, foreign words, internet domain name, invented words, professional qualifications, etc.
Local registered agent No
Information to be kept at the registered office register of shareholders, register of directors, minutes of all directors' and shareholders' meetings
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes No
Directors’ meetings/frequency/location No requirements
Company secretary required Yes
Residency requirements for a secretary Yes
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes No No
Meetings/frequency/location Yes / annually / no requirements
Beneficiary info disclosure to Yes

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements No requirements No requirements No requirements No
Issued capital payment deadlines No requirements
Standard currency Pound sterling
Standard authorized share capital 1
Standard par value of shares N/A
Shares with no par value permitted Yes

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
0% No 5% 0% No
Personal tax 20%
Corporate tax (in detail) The corporate income tax rate is 0%, with a few exceptions when the tax rate is 10% or 20%.
VAT. Details Sales tax on goods and services. Similar to VAT. The tax rate is 5%.
Other taxes Social contributions
Government fee GBP150
Stamp duty Charged in relation to real estate transactions at various rates.

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
No No No Yes Yes
Requirement to prepare accounts Yes
Double tax treaties network 15
Tax Exchange Information Agreement network 38
OECD member No
Offshore/onshore status according to the RF laws Yes

GENERAL INFORMATION

General info

The Jersey is a British Crown dependency but not a part of Great Britain. It is situated off the coast of Normandy, France.
Total area of the country is 78,866 sq. km. The population is 97,857 people (2011). Among ethnic groups are Jersey (33%), other Britons (31%), Portuguese (14%), Polish (13%), Irish (2%), French (<1%).
The capital is Saint Helier.
The official languages are English and French.
The currency is pound sterling (GBP). 1 USD is equal to 0.6 GBP.
Climate of Jersey is temperate; mild winters and cool summers; avg. maximum temperature (July) +30°; avg. minimum temperature (January) 0°C.
Time difference with Moscow is -4 hours.
Literacy rate is 99%.
Calling code is +44.

History

Jersey history is influenced by its strategic location between the northern coast of France and the southern coast of England. The island's recorded history extends over a thousand years tracing back to Palaeolithic Age. In the 9th century Jersey was invaded by Vikings, and was eventually annexed to the future Duchy of Normandy. King John lost all his territories in mainland Normandy in 1204 to King Philip II Augustus, but retained possession of Jersey and the other Channel Islands. The islands have been internally self-governing since then. During World War II, Jersey was occupied by Germany from 1 July 1940 until 9 May 1945, when Germany surrendered. The event which has had the most far reaching effect on Jersey in modern times, is the growth of the finance industry in the island from the 1960s onwards.

Government Type

Jersey is a self-governing parliamentary democracy under a constitutional monarchy, with its own financial, legal and judicial systems, and the power of self-determination.
The head of state is Queen Elizabeth II represented by the Lieutenant Governor of Jersey. He is a point of contact between Jersey ministers and the United Kingdom government and carries out executive functions in relation to immigration control, deportation, naturalization and the issue of passports.
Executive power is represented by Council of Ministers, consisting of a Chief Minister and 9 ministers. Each minister may appoint up to two assistant ministers. A Chief Executive is head of the civil service. Some government functions are carried out in the island's 12 parishes.
Legislative power is formed by the unicameral Assembly of the States of Jersey. It includes 51 elected members: 10 senators (elected on an island-wide basis), 12 Connétables (often called 'constables', heads of parishes) and 29 deputies (representing constituencies), all elected for four-year terms. There are also five non-voting members appointed by the Crown: the Bailiff, the Lieutenant Governor of Jersey, the Dean of Jersey, the Attorney General and Solicitor General.
Judiciary power is represented by the Royal Court, with appeals to the Jersey Court of Appeal and, ultimately, to the Judicial Committee of the Privy Council. The Bailiff is head of the judiciary; the Bailiff and the Deputy Bailiff are appointed by the Crown. Other members of the island's judiciary are appointed by the Bailiff.

Economy

Jersey's economy is based on financial services, tourism, e-commerce, and agriculture.
Thanks to specialization in a few high-return sectors, at purchasing power parity Jersey has high economic output per capita, substantially ahead of all of the world's large developed economies. However, this is not indicative of each individual resident's purchasing power, and the actual standard of living in Jersey is comparable to that in the United Kingdom outside central London. The island is recognised as one of the leading offshore financial centres.
Tourism supports not only hotels, but also retail and services: in 2009 there were 685,200 visitors spending £230 million. Duty-free goods are available for purchase on travel to and from the island.
In 2009 57% of the Island's area was agricultural land (an increase on 2008). Major agricultural products are potatoes and dairy produce.
53,460 people were employed in Jersey as of December 2010: 24% in financial and legal services; 16% in wholesale and retail trades; 16% in the public sector; 10% in education, health and other private sector services; 10% in construction and quarrying; 9% in hotels, restaurants and bars.
On 18 February 2005, Jersey was granted Fairtrade Island status.
Jersey is not a part of the European Union but has a special relationship with it, being treated as part of the European Community for the purposes of free trade in goods.

CORPORATE INFORMATION

Legal system

Jersey law has been influenced by several different legal traditions, in particular Norman customary law, English common law and modern French civil law. Jersey's legal system is therefore described as 'mixed' or 'pluralistic', and sources of law are in French and English languages, although since the 1950s the main working language of the legal system is English.

Types of entity

The principal forms of business organization in Jersey are:
  • Private company limited by shares
  • Public company limited by shares
  • Branch of overseas company
  • General partnership
  • Limited partnership
  • Trusts
  • Foundations
  • Protected cell companies

The most common structure is the limited liability company.

REGISTRATION

Company name

There is a range of requirements to the company name in Jersey:
  • All company names must end with the following words or their abbreviated forms: Avec Responsibilité Limitée - a.r.l. or Limited – Ltd.;
  • A chosen name should only suggest a specific activity if that reflects the primary activity of the business entity;
  • It should not falsely imply a connection with another institution or governing body;
  • It should not suggest a corporate form that the company does not have. A company should not, for example, use the word ‘trust’ in its name unless such an implied status did really exist.
  • It should not duplicate the name which already exists, nor should it be too similar to other names.
  • It shall not be offensive.
  • It shall not be misleading.
  • It should not contain the following words: bank or bankers, investment, corporation, international, associate, association, fund, trust, trustee, united, royal, Queen and King; currency symbols or currency abbreviations, foreign words, internet domain name, invented words, professional qualifications, etc.

Registration

The following steps are required to incorporate a Limited liability company in Jersey:
  1. Check for uniqueness of company's name and reserve it online: Check the Registry name index system to ensure no other business or company is already registered with your chosen name or with a similar name. Reserve a company name by completing the company name form and submitting it to the Jersey Financial Services Commission for approval.
  2. Prepare Memorandum of Association: The memorandum of association, which sets out the fundamental provisions of the constitution of the company, must be prepared. The memorandum of association does not set out the objects or powers of a company, although it is possible to include restrictions on the authority of the directors of the company in the memorandum or articles of association. The memorandum of association will state: the name of the company; type of entity; the full name and address of each subscriber who is a natural person and the corporate name and address of the registered or principal office of each subscriber which is a body corporate; details of share capital; details of the extent of liability of any guarantor member. The memorandum of association must be signed by or on behalf of each subscriber in the presence of at least one witness.
  3. Prepare Articles of Association: The articles of association, which govern the contract between the members and the company, must be prepared. The 1991 Law requires that the articles of association are also signed by or on behalf of each subscriber to the memorandum of association in the presence of at least one witness.
  4. Prepare Statement of particulars on incorporation: The agent of the subscribers must prepare a statement to be signed by the subscribers (or their agent), known as the Statement of Particulars on Incorporation. This statement will indicate the intended address in Jersey of the company's registered office upon incorporation, whether the company is to be a public or private company and whether the standard table of articles has been adopted.
  5. Obtain Control of borrowing consent : In order to issue shares, a Jersey company requires a regulatory consent from the Finance and Economics Committee of the States of Jersey pursuant to the Control of Borrowing (Jersey) Order, 1958, as amended. An application form, requesting such consent, is submitted to the Jersey Financial Services Commission together with the incorporation papers for the company. The application form requires information regarding the proposed activities of the company and the identity of the ultimate beneficial owner of the company. The application form also requires confirmation that the ultimate beneficial owner has not at any time been declared bankrupt or been a director of or otherwise involved in the management of a company which has been the subject of an insolvent liquidation or judicial enquiry.
  6. Apply for incorporation: The memorandum of association, articles of association, Statement of Particulars on Incorporation and control of borrowing consent application form are lodged at the Jersey Financial Services Commission, together with registration fees of, currently, £200. For a further fee of £200, the Jersey Financial Services Commission will expedite the application for incorporation and will deal with the same on a same day basis. The registrar of companies will process the application and, providing satisfactory information has been provided, will issue a certificate of incorporation of the company and control of borrowing consent permitting issuance of the authorised share capital.

The formation of a new company in Jersey takes 2 days.

Local registered office

A Jersey company must have a registered office in Jersey and must include its company name and registered office in all business letters, correspondence, notices, negotiable instruments and letters of credit.
Every company must maintain a register of members at the registered office of the company, or such other place in Jersey as the company may specify. The register should be open to inspection by the members of the company, without charge, during normal business hours.
Minutes of all directors' and shareholders' meetings and a register of directors and secretaries must also be maintained by a company. In each case, records held by a Jersey company may be kept in any form (whether electronic or hard copy) provided that such information can be reproduced in an intelligible manner and steps are taken to safeguard the information.

Seal

There are no statutory requirements for a company in Jersey to have a seal.

Redomicile

The redomiciliation of companies to or from Jersey is permitted.

COMPANY STRUCTURE

Directors

A private company must have at least one director. Directors must be over 18 years of age. There is no requirement under the Law for directors appointed to Jersey companies to be resident in Jersey or to hold shares in the company. A Jersey company may appoint a corporate director, providing that such corporate director is regulated to conduct financial services business under the Financial Services (Jersey) Law 1998 and does not itself have a corporate director.
Meetings of directors of a Jersey company are not required to take place in Jersey and may be held by telephone or other means of communication, providing that those present are able to hear what is said by the other participants. It is also possible for directors to pass resolutions in writing.
Particulars of the directors must be maintained in a register kept by each company and open to inspection by members of the company and by the Registrar. The Registrar may not disclose information on the register except for the purpose of enforcing any provisions of the Law or any obligation owed to the company by a director or secretary.

Secretary

All companies must appoint a secretary. In the case of a public company, the secretary must have certain prescribed qualifications, as set out in the Law. A sole director cannot also be the company secretary.
Particulars of the secretary must be maintained in a register kept by each company and open to inspection by members of the company and by the Registrar. The Registrar may not disclose information on the register except for the purpose of enforcing any provisions of the Law or any obligation owed to the company by secretary.

Shareholders

Each Jersey company must have at least one shareholder. There is no restriction on the nationality or residency of the shareholders. The shareholders can be individuals and/or legal persons.
Unless the Articles of Association provide otherwise, or all members of the company agree in writing, every company is required to hold an annual general meeting in each year, the first of which should take place within 18 months of incorporation. Where annual general meetings are to take place, they must be held no more than 22 months apart in the case of private companies.
There is no requirement for shareholders' meetings to be held in Jersey.
Where membership in a company is held by a body corporate, the body corporate may appoint any person to attend any meeting and vote on its behalf.

Beneficiary

The details of the beneficial owner are disclosed during incorporation. In order to issue shares, a Jersey company requires a regulatory consent from the Finance and Economics Committee of the States of Jersey pursuant to the Control of Borrowing (Jersey) Order, 1958, as amended. The application form requires information regarding the proposed activities of the company and the identity of the ultimate beneficial owner of the company. The application form also requires confirmation that the ultimate beneficial owner has not at any time been declared bankrupt or been a director of or otherwise involved in the management of a company which has been the subject of an insolvent liquidation or judicial enquiry. Further changes of beneficiary’s details are not disclosed.

Share capital and shares

Jersey companies may be incorporated with a share capital denominated in any currency, may allot shares at different prices, convert par value shares into no par value shares (and vice versa) and accept a member with wholly or partly paid up shares.
The usual authorized share capital is £10,000 or its foreign currency equivalent, although issued capital may be nominal e.g. £1. Stamp duty is payable on higher amounts of capital. All issued shares must be paid in full in cash.

TAXATION

Personal Income Tax

Personal income tax is levied on worldwide income of residents and ordinarily residents, Jersey-source income and any non-Jersey-source income of residents (not ordinarily residents), and Jersey-source income of non-residents.
Taxable income comprises trading profits, employment income and taxable benefits, investment income, foreign securities income, foreign possession income and income from other sources. Jersey resident shareholders may be taxable on loans made to them by Jersey resident companies in which they directly or indirectly own shares. Jersey resident shareholders of Jersey resident companies (or nonresident companies with a Jersey permanent establishment) are subject to specific anti-avoidance rule in respect of certain distributions from such companies that may have otherwise been treated as nontaxable capital receipts rather than taxable income.
The rate of personal income tax is 20%. A special regime applies for high net worth individuals, which is available only upon application; if accepted, the rate of tax is reduce to 1% on on income over GBP 625,000 (excluding Jersey property income).
For individuals, tax year is a calendar year. Where a return is filed by a tax agent, the filing date is the last Friday in July following the tax year. Where a return is not filed by a tax agent, the filing date is the last Friday in May following the tax year. A GBP 250 penalty is levied if a tax return is filed late (however, the penalty cannot exceed the tax liability for the relevant period).

Corporate tax

Corporate income tax is levied on worldwide income of resident companies and Jersey-source income of nonresident companies (excluding certain statutory and non-statutory exemptions, which include Jersey bank interest).
Resident companies are taxable on income from trading activities and from real state situated in Jersey or elsewhere. Expenses incurred in the course of generating a company’s income generally are deductible.
A Jersey company is regarded as resident in Jersey and therefore liable to Jersey income tax at 0% unless it undertakes either certain classes of financial services business (in which case the applicable income tax rate is 10%) or it undertakes certain utilities business in Jersey or real estate activities in Jersey (in which case the applicable rate is 20%). However a company is not regarded as resident in Jersey if its business is centrally managed and controlled outside Jersey in a country or territory where the highest rate at which any company may be charged to tax on any part of its income is 20% or higher, and the company is resident for tax purposes in that country or territory.

Capital gains tax

Capital gains are not taxed in Jersey.

Dividends

Net dividends received are taxable as a part of corporate income.

Losses

Losses may be carried back one year by “utility companies” and carried forward indefinitely by all companies.

Tax year

The tax year for corporations is calendar year.

GST

The States of Jersey introduced a broad based Goods and Services Tax (GST) as from 6th May 2008 – The Goods and Services Tax (Jersey) Law 2007. GST is a sales tax on domestic consumption of imported and local produced goods and services, the current rate is 5%. Some supplies may be zero-rated or exempt.

GST Registration

GST registration generally is required for all entities that made taxable supplies of GBP 300,000 or more in the last 12 months or that expect to exceed such an amount in the next year.
A special regime is applicable to "International Service Entites" or ISE whose activities are predominantly undertaken outside Jersey. ISE status removes the entity from the scope of the GST. ISE status can be obtained by a Jersey Trust company through an annual registration and payment to the Comptroller of Income Tax who will maintain a list of ISE’s.

GST tax period and returns

GST filing and payments are due quarterly. The GST return and payment is due one month after the close of the applicable quarter.

Withholding tax

Dividends, interest, and royalties paid by a company to a resident or nonresident are not subject to withholding tax.

Stamp duty

Stamp duty applies at rates ranging from 0% to 5% on the purchase or transfer of Jersey real estate. Mortgages secured by a charge over Jersey real estate are subject to stamp duty at rates up to 0.5% of the amount borrowed.

Government fee

There is an annual return fee of GBP150 in Jersey. It must be paid by the 28th February each year.

Other taxes and duties

Real property tax imposed on both the owner and occupier of land and buildings within the Island.
Transfer tax applies on the transfer of shares in companies the ownership of which confers a right of occupation of real estate located in Jersey. The amount of land transaction tax payable is equal to the amount of stamp duty that would have been suffered had the real estate been held directly rather than through a company.
Social security contribution employers are required to make social security contributions on an employee’s earnings at a rate of 6.5%, employees are required to make social security contributions at a rate of 6% of their monthly remuneration. The maximum social security contribution base is GBP 3,834. The additional 2% rate applicable to employers (earnings between GBP 3,834 and GBP 12,686) does not apply to employee contributions.

Anti-avoidance rules

Transfer pricing: No
Thin capitalization: No
Controlled foreign companies: No
General rules: A general anti-avoidance provision allows the Tax Office to raise additional tax assessments where a transaction has been entered into, the main purpose, or one of the main purposes, of which is the avoidance or reduction of Jersey income tax.
Doclosure requirements: Companies are required to disclose in their annual tax return the names of any Jersey resident individual shareholders who hold more than 2% of the ordinary share capital of the company and the names of any Jersey resident legal entity shareholders (irrespective of the extent of the shareholding).

Double Tax Agreements

Jersey has entered a whole range of double tax and tax information exchange mechanisms:
  • 15 DTCs: Cyprus, Estonia, Guernsey, Hong Kong, Isle of Man, Qatar, Liechtenstein, Luxembourg, Mauritius, Malta, Rwanda, Seychelles, Singapore, UAE, UK.
  • 38 TIEAs: Australia, Austria, Argentina, Belgium, Brazil, Canada, China, Chile, Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Hungary, India, Indonesia, Ireland, Iceland, Italy, Japan, Latvia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Slovenia, Turkey, Sweden, Switzerland, South Africa, UK, USA.

Foreign exchange control

There is no exchange control in Jersey.

ACCOUNTS

Accounting records

Every company is required to maintain accounts, which may be held in any location, although in the case of public companies certain information must be available in the Island. A private company is not required to file accounts with the registrar. The form and content of company accounts is not specified in the Law but companies must prepare accounts in accordance with generally accepted accounting principles.
A public company's accounts are required to be available to the public and filed with the Registrar. For private companies it is sufficient that accounts are available to shareholders.

Audit

There is no requirement that the accounts of a private company be audited. An audit is, however, required if the company is a public company, or if required by a company's Articles of Association or if a resolution of members so requires. An audit must be carried out by suitably qualified persons as specified in the Law. An auditor is given certain powers and has certain duties to fulfil. It is an offence to make false statements to auditors.
A public company must deliver a copy of its audited accounts to the registrar of companies within 7 months after the end of the financial period covered by the accounts.

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.


Every company in Jersey, other than a company in the course of a winding up, is required to deliver an Annual Return before the end of February in each year detailing the names and addresses of registered members, and late filing fees are payable in the event of a delay.

Tax returns

Company tax returns must be filed with the Tax Office by the last Friday in July following the tax year.
Companies that file their Jersey tax return after the filing deadline are subject to a GBP 250 penalty. Any tax outstanding in early December in the year following the tax year is subject to a one-time 10% surcharge.

SPECIAL LEGAL ENTITIES

Jersey Trusts

Jersey is an ideal location for the establishment of an international asset-holding trust. It is politically and economically stable, has a well-developed legal system which understands and recognizes trusts and provides the highest standards of protection for beneficiaries. For example, all professional trustees must be regulated and licensed by the Jersey Financial Services Commission. Furthermore, communications and local infrastructure are excellent and the authorities jealously guard Jersey’s reputation for security and financial probity.
Jersey has a rich history of trust and private client work and a strong track record of structuring and managing corporate entities. The island is also strongly associated with corporate listings, both on international markets and on the Channel Islands Stock Exchange.
A trust is a Jersey trust where the trust deed states that the trust is to be governed by Jersey law. It is not necessary for the trustee of a Jersey trust to be resident in Jersey (although if the trustee is resident elsewhere this may result in trust income and capital becoming liable to tax in another jurisdiction). There is also no requirement that any government fees or duty be paid either on the creation of a trust or while it continues in existence.
Jersey law contains specific provisions enabling wealth to be passed on in a manner which does not comply with so-called “forced heirship laws”. These are laws of particular countries which require specific portions of a person’s estate to be left to specified persons (usually, close family members regarded as dependents of a deceased person during his lifetime). Where a settlor transfers assets to a Jersey trust during his lifetime, Jersey law will not give effect to any rule of any other jurisdiction relating to inheritance or succession which says that such a transfer is not allowed. In this way, assets can be left to whomever the settlor chooses, not just to the people (and to the extent) specified by the law of another country.
Article 9 of the Trusts Law provides when considering questions relating to the trust or transfers of property to it the court must apply Jersey law only and that no consideration should be given to any rule of foreign law. Article 9(2) provides that any foreign claim based on a lack of recognition of the trust machinery will be ignored by the court.
The new Article 9A of the Law provides that settlors may reserve for themselves certain powers. Perhaps the most important of these being that the settlor may restrict the exercise of any powers or discretions of a trustee by requiring that they shall only be exercisable with the consent of the settlor or any other person specified in the terms of the trust. Other powers which can be reserved include the power to revoke, vary or amend the terms of a trust or any trusts or powers arising wholly or partly under it; to advance, appoint, pay or apply income or capital of the trust property or to give directions for the making of the same; to appoint or remove any trustee, enforcer, protector, beneficiary, investment manager or adviser; and to change the proper law of the trust.

Types of Trust

Accumulation and maintenance trusts
An accumulation and maintenance trust is generally used by a settlor for the purpose of providing for his children, grandchildren and further generations. As the name suggests, it is a trust which requires the trustee to accumulate the income of the trust for the future, but gives power for the income to be used in order to benefit (or “maintain”) any of the beneficiaries should the need arise (for example, to pay school or medical fees). Under Jersey law, it is possible for a trustee to accumulate income for up to one hundred years. The benefits of the trust can therefore be enjoyed by a number of generations although, at some point, the descendants of the settlor will have to receive the capital of the trust property.
Fixed interest trusts
A fixed interest trust is a trust where the interests created are readily identifiable from the terms of the trust and will give rise to a particular beneficiary having a fixed entitlement to the income and/or capital of the trust property. The interests are usually fixed by time (for example, a beneficiary may be paid income between the ages of eighteen and twenty-five, until he marries, or until he dies) and by amount (for example, a beneficiary may be limited to 25%, 50% or any proportion of the trust assets). The specific interests can be tailored to meet virtually any requirements (provided that the trust must end within one hundred years of its creation).
Discretionary trusts
A discretionary trust is one where, unlike a fixed trust, the trustee has discretion to decide the share of trust capital and income which each beneficiary will receive. As a result, it can provide more flexibility than a fixed trust and the trustees can respond to future circumstances as and when they arise. In administering a discretionary trust, the trustee normally requires guidance from the settlor as to the distribution of capital and income and this is often given in the form of a letter of intent. This letter may be amended from time to time or totally revoked but, whilst it is a good guide to the trustee, it is not legally binding.
Reserved powers trusts
A reserved powers trust allows a third party to the trust (usually but not necessarily the settlor or other instigator of the trust) to retain certain powers in respect of the trust. These powers may deal with any aspect of the trust, ranging from how the trusts’ assets are invested through to who may benefit from the trust and in what circumstances. Trusts of this type offer a flexibility which appeals to many prospective settlors, although in each case care will need to be taken to ensure that the reservation of any particular power or powers does not give rise to any adverse tax consequences.
Purpose trusts
Until recently, Jersey followed English law in recognizing only trusts in favor of beneficiaries or established for charitable purposes. It is now possible to set up trusts which are neither charitable nor for obvious beneficiaries, but for a purpose. The possibilities are virtually limitless, ranging from private family trusts at one end of the scale to those used in international financial transactions at the other. The only major limiting factors are that the purpose must be clear and cannot be immoral, illegal or contrary to public policy. Additionally, a person known as an “enforcer” must be appointed to enforce the terms of the trust.

Taxation

The only significant form of taxation in Jersey is income tax; Jersey has no capital taxes, inheritance taxes, gift taxes or wealth taxes. However, the trustees of a Jersey trust will not be liable to income tax on the income from trust assets where none of the beneficiaries is Jersey resident. Capital transferred to a Jersey trust can therefore grow and accumulate tax-free within the trust. It should be noted, however, that although there are few taxes in Jersey, a settlor and/or the beneficiaries of a trust may have tax obligations in their own countries.

Jersey Private Trust Companies

A Jersey Private Trust Company (Jersey PTC) is a privately owned Jersey Company whose sole purpose is to act as trustee or a related group of trusts for a specific family.
A Jersey PTC often forms the core of a family office arrangement. The trustees can delegate responsibilities on commercial terms to the family office thereby funding the family office from the trusts’ funds.
The flexibility of a Jersey PTC arrangement has led to an increase in its popularity especially in those cases where the settlor of the trust wishes family member to retain a degree of involvement in decision relating to the trusts.
Private Trust Companies are allowed to carry on business in Jersey without registering under the Financial Services (Jersey) Law 1998 pursuant to an exemption under the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2000. Although there is no registration requirement, the JFSC is able to exercise a supervisory role in relation to those PTCs which operate under the exemption.
In order to qualify for the exemption, the PTC must provide trust company business services in respect of one or more trusts and must not solicit from or provide trust company business services to the public. The intention underlying this requirement is that the PTC will be acting as trustee in relation to one or more trusts established for a particular family and will not be providing or marketing its services to third parties.

Key Features

Flexibility of Ownership – the shares of a Jersey PTC can be owned by the family of a charitable or purpose trust, or a foundation.
Board Control – the family can control the composition of the Board of directors of a Jersey PTC. As a result of this control, the family can obtain a degree of certainty that the assets of the underlying trusts will/can be managed in a manner which meets with their approval.
Board Expertise – the Board can be balanced with specialist in areas of particular interest and the team can be changed quickly, whilst retaining continuity.
Speed of Incorporation – most Jersey PTCs take less than 4 days to incorporate although a same day incorporation facility is available providing there are no regulatory hurdles to surmount.

Regulation

Whilst trust company business is a regulated activity in Jersey, a Jersey PTC will be exempt from licensing provided:
  • It acts as trustee of a specific trust or trusts;
  • It does not offer its services to the public;
  • The administration of the Jersey PTC is carried out by a Jersey regulated service provider and that the name of the Jersey PTC is provided to the Jersey Financial Services Commission.

Taxation

As there will be no resident beneficial owners or physical assets (with the exception of bank deposits) and activities in Jersey, there will be a standard 0% income tax on worldwide income.
Other taxation benefits include:
  • No stamp duty on share transfers where the share register is maintained outside the UK;
  • No withholding tax on dividends paid;
  • No capital gains tax;
  • UK VAT is not levied on the island.

Foundations

Jersey Foundations were introduced in 2009 to complement the existing varied range of Jersey vehicles used for international structuring and planning for wealth management and charitable purposes.
Foundations are particularly attractive to clients in jurisdictions where the concept of trusts is either not recognized or is less well known; or where clients are keen to maintain control over generated wealth, and personally set the rate of flow of information to beneficiaries.
The Foundation is a hybrid of a trust and a company. It is similar to a company in that it is governed by a council in accordance with its charter and regulations and is a body corporate, but is also like a trust in that a foundation must have one or more objects which may be a purpose (charitable or non-charitable) and/or be for the benefit of one or more beneficiaries.
A foundation must at all times have a valid charter. Once the foundation has been incorporated, the charter is filed with the Registrar and available for public inspection at the JFSC. The charter must state:
  • the name of the foundation;
  • the objects of the foundation;
  • information regarding winding, dissolution and the term of the foundation;
  • and details of the initial endowment.

In addition to the charter, every foundation must have regulations, unless all of its governing provisions are contained within the charter.
The council of the foundation administers its affairs and carries out its objects. There must always be a Qualified Member on the council. The Law imposes on the council members duties to act honestly and in good faith and to exercise due care.
A foundation need not have beneficiaries, and may be established solely for a particular purpose. Where there are beneficiaries, they have no interest in the assets of the foundation and are not owed a fiduciary or analogous duty by the foundation or by the members of the council, the guardian or any other person appointed under the regulations. Moreover, unless required by the charter or regulations, a foundation is not obliged to provide any beneficiary with information relating to the administration, assets or carrying out of the objects of the foundation. In this last respect, foundations differ from trusts manifestly.

Key Features

  • A hybrid between a company and a trust
  • An incorporated body
  • Can hold assets and contracts in own name
  • Can sue and be sued in its own name
  • Unlimited duration
  • Governed by Law, Charter and Regulations
  • Key parties are: Founder, Council, Guardian and Beneficiaries (if any)
  • The role of Guardian and a Jersey ‘qualified member’ on the Council ensure accountability and Jersey regulatory compliance, whilst maintaining the appealing features of Foundations
  • The Charter of a Foundation will be filed and available for public inspection, however, the more detailed Regulation need not. There exists considerable flexibility as to the information that can be contained in these two documents.

Potential Uses

  • Family and/or inheritance purposes
  • Charitable purposes
  • Owners of companies (‘holding’ or ‘parent’)
  • Commercial transactions, particularly where an ‘orphaned’ special purpose vehicle is required
  • Employee benefits arrangements.

Comparisons with other Jurisdictions

  • A Jersey Foundation is not an exact equivalent or copy of Foundations from any other jurisdiction.
  • Jersey is the only international finance center featured on the OECD “white list” which offers Foundations.

Taxation

As there will be no resident connected parties or Jersey income with the exception of bank deposit interest, Foundations will not be subject to Jersey taxation.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
No mixed, largely based on English Common Law, with many French features 15 No Yes

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Companies (Jersey) Law companies
Companies (Takeovers and Mergers Panel) (Jersey) Law takeovers and mergers
Foundations (Jersey) Law foundations
Incorporated Limited Partnerships (Jersey) Law incorporated limited partnerships
Limited Liability Partnerships (Jersey) Law limited liability partnerships
Limited Partnerships (Jersey) Law limited partnerships
Separate Limited Partnerships (Jersey) Law separate limited partnerships
Registration of Business Names (Jersey) Law registration of business names
Control of Borrowing (Jerse) Law control of borrowing
Income Tax (Jersey) Law, 1961 income tax
Goods and Services Tax (Jersey) Law GST
Tax treaties entered Cyprus, Estonia, Guernsey, Hong Kong, Isle of Man, Qatar, Liechtenstein, Luxembourg, Mauritius, Malta, Rwanda, Seychelles, Singapore, UAE, UK.
Tax Exchange Information Agreement (TEIA) Australia, Austria, Argentina, Belgium, Brazil, Canada, China, Chile, Czech Republic, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Hungary, India, Indonesia, Ireland, Iceland, Italy, Japan, Latvia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Slovenia, Turkey, Sweden, Switzerland, South Africa, UK, USA.
List of state regulatory authorities
Government of Jersey http://www.gov.je/Pages/default.aspx
Jersey Financial Services Commission http://www.jerseyfsc.org
Companies Registry http://www.jerseyfsc.org/registry/
Jersey Legal Information Board http://www.jerseylaw.je/default.aspx
Tax office http://www.gov.je/TaxesMoney/Pages/default.aspx
Social Security Office http://www.gov.je/Government/Departments/SocialSecurity/Pages/index.aspx

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