Company Formatation in Jersey
Tax Exempt Company
If a company is owned by non-residents of Jersey who elect to register the company as “exempt”, it avoids any liability to Jersey income tax except on Jersey source income. An application for exempt company status must be made within three months of incorporation of a company and annually thereafter.
The favoured tax status of the exempt company makes it the obvious choice for most clients.
Jersey Offshore Legal and Tax Regime
The term ‘offshore’ is not used in Jersey legislation or in describing company forms.
Non-residence is the key criterion for obtaining offshore tax treatment other than for the International Business Company, which is regarded as being resident. The main forms useful for offshore operations in Jersey are the exempt company, the International Business Company, the Limited Partnership and the Trust. Normally, non-resident tax treatment is given to foreign income, while income arising in Jersey is taxed more highly.
It became clear in May 2002 that Jersey, along with its fellow UK dependent territories Guernsey and the Isle of Man, would agree to be part of the EU’s information-sharing regime, whereby financial institutions will be obliged to pass details of income on investments by nationals of EU member states to their home tax administrations. After it became clear that the EU would begin information-sharing in 2005, and after some hesitation, Jersey decided to opt for a withholding tax on the Swiss model. This withholding tax became effective from July 1, 2005.
Key Corporate Features
|Type of entity||Exempt|
|Type of law||Common|
|Shelf company availability||No|
|Our time to establish a new company||8 days|
|Minimum government fees (excluding taxation)||£ 600|
|Double taxation treaty access||No|
|SHARE CAPITAL OR EQUIVALENT|
|Minimum paid up||£ 1|
|Usual authorised||£ 10,000|
|DIRECTORS OR MANAGERS|
|Minimum number||Normally 2|
|Publicly accessible records||No|
|Location of meetings||Anywhere|
|Publicly accessible records||No|
|Location of meetings||Anywhere|
|Local or qualified||No|
|Requirement to prepare||Yes|
|Requirement to file accounts||No|
|Requirement to file annual return||Yes|
|Change in domicile permitted||No|
Jersey is the largest of the Channel Islands and is approximately one hundred and sixty kilometres south of England, but only 20 kilometres from France.
The population of Jersey is approximately 82,000 and effective immigration controls exist to restrict future growth.
Since 1066, The Channel Islands have been possessions of the English Crown, as distinct from colonial and overseas dependencies of the United Kingdom.
Accordingly, the constitutional relationship between the Channel Islands and the United Kingdom is unique, whereby the respective legislative assemblies have the exclusive right to legislate on matters of domestic concern to the Islands (including taxation), whilst the United Kingdom is responsible for the Island’s external affairs. This relationship has arisen over a period of time through custom and not through specific constitutional charter; in recent years; however, it has been subject to considerable scrutiny as a result of which it now appears to be more firmly established than before.
Infrastructure and Economy
The financial services sector provides Jersey’s main source of income, and the tourist industry has always been very important to the Island’s economy. There are various other less significant sources of income, including agriculture and fishing.
Air services from Jersey are excellent, with particularly frequent services to London. There are also flights to many European centres, including Paris and Amsterdam. Jersey relies on sea transport for the importation of the majority of its goods. Jersey boasts an excellent telecommunications system as it uses the UK digital network.
Jersey is in a very favourable situation owing to the proximity of the UK and the Continent, and although the legislation on Free Trade adopted by the European Community applies to the Island, the politics of taxation planning does not affect Jersey. The currency is the Pound (GBP), which is on a par with the UK Pound, and there is no exchange control.
English is used in all aspects of the financial and commercial activities of the Island. However, French remains the official language of the Royal Court of Jersey.
The Jersey Pound is on par with the UK Pound. The Island issues its own notes and coinage that are freely interchangeable with the UK Pound.
Type of Law
Largely based on English Common Law, with many French features.
Principal Corporate Legislation
Companies Jersey Law, 1991, as amended.
Type of Company for International Trade and Investment
Procedure to Incorporate
By submission of the Memorandum and Articles of Association to the Financial Services Commission, together with notification of the Registered Office address, the names, nationalities and addresses of the directors and shareholders, character references relating to the beneficial owners and a full description of the proposed company’s trading and/or investment activities.
Restrictions on Trading
A Jersey Exempt Company cannot trade within Jersey or undertake the business of banking, deposit taking, insurance, assurance, reinsurance, fund management, asset management (other than its own assets) or any other activity associated with the banking, finance and insurance industries. Full details of these and other ‘sensitive’ activities are available on the Financial Services Commission website, www.jerseyfsc.org.
Powers of the Company
A Jersey company has all the powers of a natural person.
Language of Legislation and Corporate Documents
Registered Office Required
Yes. Must be maintained in Jersey.
Name Approval Required
Yes, by formal request to the Financial Services Commission.
Shelf Companies Available
No, due to disclosure requirement of beneficial ownership and trading activities.
Time Scale to Incorporate
Usually, five working days after submission of application to incorporate a company. Can also be incorporated in two hours as long as the applicant meets certain criteria, the name is approved and an additional payment of £200 is paid to the Financial Services Commission. Fast track incorporations received after 3 pm will be completed by 10 am the following day.
A name that is similar to or identical to an existing company or registered entity. Names of well-known multi-national companies, without prior written consent. Names that imply illegal activities. Names that imply royal or government patronage, either local or foreign.
Names Requiring Consent or a License
The following names or their derivatives: Jersey, bank, building society, savings, loans, insurance, assurance, reinsurance, building society, Chamber of Commerce, council, co-operative, trust, trustees, finance, international or their foreign language equivalent.
Language of the Name
The name of a Jersey registered company can be in any language using the Latin alphabet as long as the authorities are advised of the meaning on the name application form. The name application will then be granted, or otherwise, under the current guidelines regarding the use of certain words.
Suffixes to Denote Liability
A company with limited liability must end its name with Limited or Ltd or with the French equivalent Société avec Responsabilité Limitee or SARL.
DISCLOSURE OF BENEFICIAL OWNERSHIP TO GOVERNMENT AUTHORITIES
Yes, before incorporation. If beneficial ownership changes the Financial Services Commission has to be informed immediately.
The normal authorised share capital is £10,000 or its foreign currency equivalent, although issued capital may be nominal e.g. £2.00 Stamp duty is payable on higher amounts of capital.
Minimum Issued Capital
Equal to the value of the shares issued to the subscribers, normally two shares of £1.00 paid or its foreign currency equivalent. All issued shares must be paid in full in cash.
Registered shares, preference shares, redeemable shares, non-redeemable shares and shares with or without voting rights.
Exempt Companies are exempted from all forms of Jersey taxation. Resident Jersey companies pay income tax at a rate of 20% on world-wide income.
Double Taxation Agreements
Yes, with United Kingdom and Guernsey, but they only apply to resident individuals and companies.
Exempt companies pay an annual tax exemption fee of £600.
Financial Statement Requirements
Required for Resident Companies, not for Exempt, although the Financial Services Commission reserves the right to call for accounts at any time.
The minimum number of directors required by law is Normally 2; they must be natural persons. If a company has a sole director, the sole director cannot be the company secretary. The director may be of any nationality and need not be resident in Jersey. Normally we recommend appointing two directors.
A company secretary is required who can be a natural person or body corporate. Can be of any nationality and need not be resident in Jersey.
The minimum number of shareholders is Two. However, if the company is to be a wholly owned subsidiary then only one shareholder is required.
Main Advantages of Jersey
Tax Exempt Companies
– pay no tax on income arising outside the Island;
– pay no tax on interest arising from Jersey bank deposits;
– are not subject to any capital taxes within the Island;
– make no income returns (other than for Jersey sourced income excepting bank deposit interest);
– can appoint local directors and have board meetings in Jersey;
- 1 Company Formatation in Jersey
- 1.1 Channel Island
- 1.2 Tax Exempt Company
- 1.3 Jersey Offshore Legal and Tax Regime
- 1.4 Key Corporate Features
- 1.5 General Information
- 1.6 Population
- 1.7 Political Structure
- 1.8 Infrastructure and Economy
- 1.9 Language
- 1.10 Currency
- 1.11 Exchange Control
- 1.12 Type of Law
- 1.13 Principal Corporate Legislation
- 1.14 Company Information
- 1.15 Type of Company for International Trade and Investment
- 1.16 Procedure to Incorporate
- 1.17 Restrictions on Trading
- 1.18 Powers of the Company
- 1.19 Language of Legislation and Corporate Documents
- 1.20 Registered Office Required
- 1.21 Name Approval Required
- 1.22 Shelf Companies Available
- 1.23 Time Scale to Incorporate
- 1.24 Name Restrictions
- 1.25 Names Requiring Consent or a License
- 1.26 Language of the Name
- 1.27 Suffixes to Denote Liability
- 1.28 Compliance
- 1.29 Authorised Share Capital
- 1.30 Minimum Issued Capital
- 1.31 Classes of Shares Permitted
- 1.32 Taxation
- 1.33 Double Taxation Agreements
- 1.34 License Fees
- 1.35 Financial Statement Requirements
- 1.36 Directors
- 1.37 Company Secretary
- 1.38 Shareholders
- 1.39 Main Advantages of Jersey Tax Exempt Companies
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