Private Company Limited by Shares
incorporated in Jersey are governed by the Companies
Law 1991 which is based largely on the English 1948
Companies Act. Jersey companies are limited by shares;
there are no forms comparable to those of English
companies limited by guarantee or unlimited companies.
A private company is any company that is not a public
Shelf companies are not available in Jersey; however
the formation process is quick and inexpensive provided
that a new company does not intend to carry on business
on Jersey itself. There is an incorporation fee of
GBP200 and an annual return fee of GBP150. In August,
2010, the Economic Development Department of Jersey
together with the Financial Services Commission published
a green paper proposing an increase of the annual
return fee to GBP250 with a guarantee of no further
increase within three years. The deadline for comments
on the proposal was September 24, 2010. A company
must have a registered office in Jersey. Accounts
need not be audited, but have to be filed with the
Jersey revenue authorities.
company wanting to do business as such on the island
will need to provide a great deal of information to
the authorities in order to obtain the necessary consents
and licenses; in fact the authorities actively discourage
new business activity in most cases in order to conserve
Exempt Private Company
NB As a result of the introduction of the 'zero/ten'
corporate tax reform in January 2009, no new Exempt
Companies could be formed in Jersey after June 3, 2008.
Exempt companies formed prior to that date are treated
as resident for tax purposes, and are charged corporate
tax at either 0% or 10%. See Domestic
Corporate Taxation for further details.
private company limited by shares applied to the Comptroller
of Income Tax to be exempt; the application cost GBP600
and was subject to the following conditions (this is
a simplified statement):
residents could not have any direct interest in
the shares of an exempt company, but could have
owned shares in a company which did;
exempt company's beneficial owners were required
to disclose to the Financial Services Commission;
company must not have failed to pay income or corporation
tax in a previous year;
company could not have been exempt in a previous
period separated from the current period by one
year or more, unless there had been a substantial
change of ownership.
status was applied for each year and lasted for one
year; see Offshore Legal and
Tax Regimes for details of the tax situation of
exempt companies; the main advantage was that foreign
income remained untaxed.
Jersey Public Company Limited by Shares
public company is one which has more than 30 members
or which declares in its Memorandum of Association that
it is public. Public companies are required to file
audited accounts with the Registrar of Companies. Only
a public company may issue a prospectus and offer its
shares for subscription to the public.
Branch of Overseas Company
If a foreign company intends to trade within Jersey
using its own name or to establish a branch or a permanent
place of business on the island, it is subject to the
same consents and license requirements that apply to
resident companies; and it will be taxed as if it was
a resident company. However, not being a Jersey company,
it will not be required to register its corporate details
or to file annual returns. A branch of a foreign company
used to be able to apply to be an International
International Business Companies
NB In accordance with Jersey’s commitment to the
‘Rollback’ provisions of the EU Code of
Conduct for Business Taxation, the International Business
Company vehicle was abolished to new entrants with effect
from 1st January, 2006. Benefits for existing beneficiaries
of the International Business Company regime will be
progressively extinguished by no later than December
status of International Business Company can be held
by an incorporated Jersey company or the branch of a
foreign company. An IBC is resident in Jersey for tax
purposes but the rates of tax are very low on non-Jersey
income (see Tax Regimes).
Jersey residents may not hold shares in an IBC. Prior
to the legislative changes, an annual advance tax payment
of GBP1,200 must have accompanied an application for
IBC status. As for private companies in general, beneficial
ownership has to be disclosed, but is not kept on the
There is no legislation in Jersey governing ordinary
partnerships; the law for General Partnerships is similar
to English law as in the Partnership Act 1890. Partnership
is between persons (which can include companies) and
the liability of each partner is unlimited. There is
no requirement to register details of a partnership.
Resident partners are liable for tax on world-wide profits.
Jersey Foreign Partnerships
the control and management of a partnership is carried
on abroad, it is deemed to be resident outside Jersey,
even if some of the partners are resident in Jersey.
Tax will however be due on business profits earned through
activities on the island and can be assessed on the
Limited partnerships are governed by the Limited Partnerships
Law 1994, supplemented by the Limited Liability Partnerships
(Jersey) Law 1997 and the Limited Liability Partnerships
(Insolvent Partnerships) (Regulations) 1998, putting
Jersey LLP law on a very advanced basis for this useful
form. Companies may be limited or general partners.
Limited partnerships are often used in ownership structures
for funds, real estate and leveraged financing packages.
To form a limited partnership a declaration must first
be lodged with the registrar, giving the names of the
general partners, but not of the limited partners. The
partnership agreement need not be filed. A registration
fee of GBP500 is payable, but there is no annual registration
fee. The tax treatment of limited partnerships is the
same whether they are registered in Jersey or abroad.
Each of the partners is separately assessed to tax on
their partnership income and gains; resident partners
on worldwide partnership income, and non-resident partners
only on Jersey income.
June 2006, the Jersey authorities published new proposals
to amend the jurisdiction's Limited Partnership Law,
in an effort to improve the competitiveness of the island's
offshore financial services industry. One of the main
aims of the proposals was to allow a Jersey limited
partnership to have a legal personality, bringing the
island into line with Guernsey, which amended its relevant
legislation in 2001 allowing limited partnerships to
elect to have legal identity.
new limited partnership laws were adopted by the States
on May 25, 2010, follwowing a consultation published
by Jersey’s Economic Development Department in
two laws are the draft Separate Limited Partnerships
(Jersey) Law 2011 and the draft Incorporated Limited
Partnerships (Jersey) Law 2011. These provide respectively
for the establishment of Separate Limited Partnerships
(SLPs) and Incorporated Limited Partnerships (ILPs).
Establishment of an SLP was made possible from April
20, 2011 and for an ILP from May 24, 2011.
SLP will have legal personality but without being a
body corporate (as is already the case for a Scottish
limited partnership), whereas the ILP will be a body
Bestwick, technical director of Jersey Finance, said:
”The new Separate Limited Partnership and Incorporated
Limited Partnership will be attractive additions to
the Jersey Limited Partnership regime.
Although Jersey law has its roots in the Norman
law (a 'Roman' or 'Civil' law code), the Trusts
(Jersey) Law 1984 codified an entirely 'Anglo-Saxon'
body of trust law, resolving many uncertainties
and increasing protection for beneficiaries.
Subsequent amendments included the recognition
of 'purpose' trusts in 1996 (the normal form
of Jersey trusts is 'discretionary'). This
has led to an increase in corporate use of
most significant amendment to the 1984 law
came into force on October 27, 2006. This
introduced settlor-reserved powers, which
provide greater statutory certainty regarding
the level of control and influence a settlor
may exercise, in appropriate circumstances,
over the ongoing administration of assets
placed into trust. The powers that may be
reserved by the settlor include the power
to appoint and remove trustees, to amend or
revoke the terms of the trust and to appoint
or remove an investment manager or investment
adviser. The amendments also permit a trustee
to delegate any of his or her trusts or powers
if permitted by the terms of the trust.
amendments include conflict of law provisions
which will mean that the validity of a trust
governed by Jersey law will not be affected
by any rights conferred on anyone under a
foreign law, and a proposal that will remove
the existing automatic ‘personal guarantor’
provisions for directors of corporate trustees,
thereby making it more attractive to establish
private trust companies in Jersey.
is a party to the Hague Convention on the
Law Applicable to Trusts and Their Recognition.
Jersey trust law explicitly excludes foreign
inheritance laws and does not recognize foreign
judgements. The creation of a trust is free
from Government duty and there are no registration
or audit requirements as such in Jersey, although
the tax authorities of beneficiaries' jurisdictions
(eg the UK) may require annual reports.
trusts may 'migrate' to other jurisdictions
by changing trustees and the applicable law
of a trust; likewise, foreign trusts may migrate
Jersey trust is governed by the law of Jersey.
In the case where the beneficiaries of a Jersey
trust are non resident, income arising from
sources outside Jersey is not liable to income
tax in Jersey, nor are distributions to the
beneficiaries. Interest on bank deposits made
by the trustees of a nonresident trust is
not taxed because of a government concession.
The trustees of a non resident trust are not
required to make returns or provide accounts
of the trust to the Comptroller of income
tax. Trust accounts must be kept but do not
2008, the Economic Development Department
issued a consultation paper reviewing Jersey’s
trusts law. The consultation paper covered
ten 'discrete' areas of possible reform, with
proposals and questions for respondents to
consider in each case. The consultation closed
in September 2008.
Jersey Financial Services Commission launched
a consultation in March 2010 on proposed changes
to trust company business exemptions with
regard to persons undertaking the activity
of a director under the Financial Services
(Jersey) Law (FS(J)L) 1998.
Commission said that the proposed changes
would affect in particular:
Individuals that act as directors, on a professional
basis, of companies that they do not beneficially
Individuals that are currently relying on ‘the
connected persons exemption’.
Consultation Paper proposed the following
two changes in respect of Trust Company Business
To present a new exemption that introduces “de
minimis” provisions which will allow an
individual to hold a maximum of six directorships
(in addition to any that would otherwise be exempt)
before the need to register under the FS(J)L is
To restrict the scope of the ‘Connected
Persons’ exemption contained in the note
to paragraph 1 of the Schedule to the Financial
Services (Trust Company Business (Exemptions No
4)) (Jersey) Order 2000.
Financial Services (Trust Company Business) (Exemptions
Amendment No. 2) (Jersey) Order 2010 came into force
partly on November 24, 2010, when the "de minimis"
provision was introduced. The remainder of the Order,
dealing with the 'Connected Persons' exemption came
into force on February 17, 2011.
There are no special provision in Jersey law
covering Unit Trusts, which are therefore
treated in the same way as ordinary Jersey
trusts, and have the same tax
Protected Cell Companies
Companies (Amendment No.8) (Jersey) Law 2006,
introduced advances to cell company investment
legislation permits the creation of cell companies
in Jersey and includes innovative features
which extend the scope of their use for investment
legislators have introduced the concept of
an Incorporated Cell Company (ICC), alongside
an enhanced version of the traditional Protected
Cell Company (PCC), to provide investors with
greater flexibility when choosing a cell structure
to meet their investment objectives.
new ICC involves the formation of separate,
legally recognised cells within the overall
structure, with each cell established as a
separate incorporated Jersey company. This
is in contrast to the traditional PCC where
all the cells combined create one legal entity
and each cell is not treated as a separate
measures, which Island practitioners describe
as the first significant advance from the
original PCC model, are expected to provide
a boost generally to the Island’s investment
capabilities in the institutional market,
particularly for the insurance sector and
in support of international capital markets
June 2009, Jersey's Privy Council approved
an order allowing Foundations to be set up
have a long history in continental Europe.
In medieval times they were used for charitable
or religious purposes. They are now commonly
used for wealth management, and residents
of jurisdictions like the Middle and Far East
are more familiar with foundations than with
trusts, which do not exist in their legal
systems. Jersey is the first of the Crown
Dependencies to bring in a genuine foundation
regulations will permit foundations to migrate
in and out of Jersey. They also provide for
existing Jersey companies to convert to foundations.
approval of the Jersey Foundations Law by
Jersey’s Privy Council was welcomed
by Jersey Finance as a hugely positive step
in affirming the island as a centre of excellence
for private wealth management business.
sit alongside existing vehicles such as companies,
trusts and limited partnerships for use in
financial planning and private wealth management
foundation must have regulations. These regulations
a council to administer the foundation’s
assets and to carry out its objects;
for the appointment, retirement, removal and remuneration
(if any) of its members;
out how the decisions of the council are to be
made and, if any decision requires the approval
of any other person, specify the decisions and
that person; and
out the functions of the council, and, if they
must or may be delegated or exercised in conjunction
with any other person, the extent to which this
must or may be done.
particular, the regulations of a foundation must set
out a procedure that ensures that a qualified person
is appointed to be the qualified member of its council
as soon as reasonably practicable if its qualified
member dies, retires, or otherwise
ceases to act or to be able to act.
similar in design to foundations in other
jurisdictions, the Jersey structure introduces
the concept of a ‘guardian’ with
oversight over the council’s activities
in relation to the foundation and ensures
that it achieves the broad objectives outlined
in its constitutive documents.
foundation must have a council to administer
the assets of the foundation; and to carry
out its objects. The council of a foundation
may have one or more members and must include
a qualified person. However, although the
council of a foundation may include more than
one qualified person it may not have more
than one qualified member at any one time.
act of a member of the council of a foundation
is valid despite any defect that may afterwards
be found in the appointment of the member;
or the member’s qualifications.
beneficiary under a foundation has no interest
in the foundation’s assets; and is not
owed by the foundation or by a person appointed
under the regulations of the foundation a
duty that is or is analogous to a fiduciary
duty. However, if a beneficiary under a foundation
becomes entitled to a benefit under the foundation
in accordance with the charter or the regulations
of the foundation; and the benefit is not
provided, the beneficiary may seek an order
of the Royal Court ordering the foundation
to provide the benefit.
beneficiary must seek the order within the
period of three years from the time when the
beneficiary became aware of his or her entitlement
to the benefit, provided they have reached
the age of 18.
foundations are expected to be a particularly
attractive option for wealthy clients in civil
law jurisdictions where the concept of a trust
vehicle is not so familiar.
Foundations (Jersey) Law 2009, entered into
force on July 17, 2009.
law firm Mourant du Feu & Jeune announced
on July 21 that it had established the first
two foundation structures in Jersey. The two
foundations were established on the first
day the new law came into force in Jersey.
registration fee of GBP200 is payable.
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