Jersey Offshore Companies

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General Introductory and Offshore Tax Information

Mature offshore jurisdictions such as Jersey put numerous corporate entities in the hands of entrepreneurs and investors internationally. Providing a wide range of professional services as well as offshore business entities that cater to the diverse needs of the business world puts Jersey at the top of its game. Jersey offshore business entities are supported by forward-looking legislation in which regulatory demands for the conduct and use of offshore entities are embedded. From collective investment funds to money business services, general mediation business, banking and trust services, high value goods dealers, lawyers and accountants, Jersey represents the typical one stop offshore haven.

Offshore tax treatment in Jersey is mainly based on non-residence. Whilst several corporate forms benefit from tax exemptions and benefits, the Exempt Company (commonly identified an International Business Company) as a prime vehicle for conducting tax free offshore activities is no longer being incorporated and is expected to be phased out by December 2011.

From January 1 2009, the zero/10 regime was established as a method of taxing the gains and profits of Jersey companies. Under the new regime, financial services companies are taxed at a rate of 10% while most Jersey companies which are incorporated in foreign jurisdictions are taxed at 0% and the 20% tax rate levied on other domestic companies remains unchanged. All resident Jersey companies incorporated from June 3, 2008 onwards are automatically taxed at 10%.

Under the Financial Services (Jersey) Law 1998 financial services companies are identified as companies registered under the law for the purpose of conducting trust company and investment business; or companies which are registered under the Banking Business (Jersey) law 1991, with the exception of companies registered for business continuity under that Law; and companies to which permits for collective investment funds were issued.

Jersey offshore companies may be structured as unlimited or limited companies, companies with or without par value shares, companies with guarantee or limited duration.

Jersey Offshore Business Entities:

  • Jersey Insurance
  • Jersey Partnerships
  • Jersey Banks
  • Jersey Trusts
  • Jersey Protected Cell Company and Incorporated Cell Company

Jersey Insurance

Law

  • Insurance Business (Jersey) Law 1996 (as amended), The Insurance Business (General Provisions) (Jersey) Order 1996, and, the Insurance Business (Solvency Margin) (Jersey) Order 1996

Types of Insurance Permits

Category A

  • Holders of this license carry out insurance business in Jersey but are supervised and authorized in a foreign jurisdiction.
  • Required to submit financial statements and an auditor’s report to the Commission within six months following the close of the financial year

Category B

  • This license is granted to any insurance service provider with the exception of captive insurance business.
  • This license is subject to conditions which are determined on a case by case basis.
  • Required to submit financial statements and an auditor’s report to the Commission within three months following the close of the financial year

Captive Insurance

  • A captive insurance which functions as an IBC is taxed at a rate which is negotiated anywhere between 0-30%. A captive can also be an exempt company
  • Must hold a Category B permit if registered under the Companies (Jersey) Law 1991, whether or not it conducts insurance business in or from within Jersey
  • Minimum capital requirement is GBP100, 000 or its equivalent in a foreign currency
  • Fees include incorporations costs and stamp duty which is imposed on the authorized capital

Taxation and fees

  • The following fees, made effective October 1, 2008 apply to insurance companies:

Category A permit

  • GBP4,800 for long-term insurance business
  • GBP2,400 in any other insurance business

Category B permit where the applicant or insurer is not a cell

  • GB8400 for long-term business of any class
  • GB4200 in any other insurance business

Category B permit where the applicant or insurer is a cell company or a cell

  • GB4200 if the permit is to be issued to a cell company
  • GB2400 is to be issued to a cell and includes long-term business of any class
  • GBP1200 if the permit is to be issued to a cell and includes general business of any class

Jersey Partnerships

Types of Jersey Partnerships:

  • Limited Partnerships
  • Foreign Partnerships
  • Limited Liability Partnerships

Jersey Limited Partnerships

Law

  • Limited Partnerships (Jersey) Law 1994

Main Features:

  • Mainly formed for the purpose of venture capital business, development of real estate and management buy-out
  • Several limited partnerships take the form of collective investment schemes, becoming part of the collective investment fund under the relevant law
  • Under Jersey is not a legal entity separate from the partners, hence qualifying as a ‘fiscally transparent entity’ which is exempt from tax
  • Has at least one general partner who assumes unlimited liability
  • Has at least one limited partner whose liability with respect to towards obligations and debts is limited to the contribution made
  • With the exception of certain provision stated in the law, generally, limited partners are considered passive investors and are not allowed to participate in managing the partnership
  • Persons with interests in a limited partnership is treated as owner of a pro rata share of each underlying investment, making it possible to benefit from the double tax treaties which may exist between Jersey and the investor’s country of residence
  • All business names are required to be registered in accordance with the Registration of Business Names (Jersey) law 1956.
  • Limited partnerships are not liable to annual fees.

The fee for the registration of a declaration and issue of a certificate under Article 4 of the law is GBP500 and that for the registration of an amendment of a declaration under article 5 of the law id GBP100.

Jersey Foreign Partnerships

  • A partnership is considered non-resident if it is managed and controlled in another jurisdiction, although there may be partners who reside in Jersey.

Taxation and fees:

  • May be liable to fees as may from time to time be prescribed by law
  • Liable to corporate tax on profits originating from Jersey
  • Resident partners may be liable to tax as may be imposed accordingly

Jersey Limited liability partnership

Law

  • Limited Liability Partnerships (Jersey) Law 1997

Basic Features:

  • Must have a registered office in Jersey
  • Name must end with “L.L.P.”, “LLP” or "Limited Liability Partnership
  • Required to keep all accounting records for at least ten years link See General Introductory and Offshore Tax Information

Jersey Banks

Law

  • Banking Business (Jersey) Law 1991

Main Features:

  • May either operate as a company limited by shares, a branch or a unit which does not necessarily need additional staff or premises and is locally managed by another bank
  • The Supervisor of the bank’s home country must confirm its approval of an applicant’s establishment in Jersey as a bank
  • An incorporated subsidiary must submit a Letter of Comfort from the parent bank or interim owner before it is registered
  • Managed banks can be either subsidiaries or branches if they accept deposits, have no domestically based staff or office Taxation and Fees link See General Introductory and Offshore Tax Information

Jersey Trusts

Law

  • Trusts (Jersey) Law 1984 (amended January 2007)

Jersey Spendthrift or Protective Trust

  • Beneficiary’s interest may be terminated
  • The beneficiary’s interest may be reduced or terminated in the event the beneficiary becomes bankrupt or stands to lose his property to creditors or sequestration

Jersey Trust for non-charitable purposes

  • A trust established for purposes that do not fall within the context of charity under the law

Jersey Charitable Trust

  • A trust created for charitable activities such as protecting the environment, social freedom and providing education

Jersey Foreign Trust

  • Refers to a trust supervised and authorized by foreign jurisdiction

Jersey Unit Trust

  • Created for the purpose of having or providing investment funds, mechanisms for participating as beneficiaries of any revenue that may be earned from acquiring, managing, disposing or holding any property.
  • Can only be created by an instrument in writing.

Features:

  • Trusts may be perpetual unless stated otherwise
  • Jersey offshore trusts may be established by word of mouth, in writing such as a will or codicil or by conduct
  • Offshore trusts can have a minimum of one trustee
  • The court has jurisdiction over a trust if it is established in Jersey, if a trustee of a foreign trust resides in Jersey, and if the property belonging to a foreign trust is administered in Jersey and if the property is located in Jersey.
  • There are no rules against excessive accumulations or against perpetuities for Jersey offshore trusts

Jersey Protected Cell Company and Incorporated Cell Company (PCC)

Law

  • Jersey’s Companies (Amendment No.8) (Jersey) Law 2006

Main Features:

  • The protected cell company structure was modernized under the Companies amendment of 2006.
  • The Incorporated Cell Company (ICC) provides investors with a flexible mechanism for investment.
  • The ICC permits the creation of independent, legally recognised cells within the general structure.
  • Unlike the PCC in which the cells are not separate legal entities, each cell of an ICC is setup as a separate incorporated Jersey company.
  • ICCs are particularly beneficial to insurance and international investment companies.
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