Since 2003, Healy Consultants Group has been acting as a project manager, between our clients and local regulated service providers, with i) Jersey company registration ii) applicable business licensing per our Client’s specific industry iii) Jersey business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.

Jersey business setup summary

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• Advantages and disadvantages

  Advantages of Jersey company registration

  

  1. Registering a company in Jersey is easy because i) the incorporation process can be completed within 2 weeks ii) with a minimum paid up share capital of £1 iii) one shareholder and director;
  2. Our private and institutional Clients prefer to purchase UK real estate through Jersey entities because:
     • They can legally avoid i) capital gains tax and stamp duty on the sale of the UK property and ii) withholding tax on gross rental income under the non-resident landlord scheme. Furthermore, a Jersey company can be registered for VAT to recover UK VAT on the purchase of the UK real estate;
     • Goods and services tax (GST) in Jersey is only 5%. Jersey businesses selling services to international Clients can gain an exemption from this tax by applying for International Service Entity status (ISE status);
     • As a more flexible and cheaper alternative to a UK listed REIT, Jersey property unit trusts (“JPUTs”) can be used to own and manage portfolios of UK residential and commercial properties. Furthermore, to fund property acquisitions, JPUT’s can be listed on the Channel Islands Stock Exchange (“CISX”) and marketed to institutional investors;
     • Why purchase UK real estate through a Jersey entity?
     • Jersey trusts are effective in holding UK property to ensure that it does not form part of a person’s estate. The trustee can be a Private Trust Company to help our Client maintain control over the assets, particularly important to our Asian Clients;
     • A UK property agent can do easily everyday property management activities, including: i) communicating with tenants and ii) rent collection.
  3. A Jersey PLC is an excellent vehicle to conduct business in the UK because:
     • Sales income from UK customers is fully exempt from UK taxation;
     • The transfer of shares between shareholders is fully exempt from both i) capital gains tax and ii) stamp duty payable in Jersey, thus a popular holding company for UK public takeover offers and private acquisitions;
     • CISX qualified debt securities are eligible for the “Quoted Eurobond Exemption” which allows an issuer within the UK to make gross interest payments. Furthermore, Jersey companies are used for listing on the Alternative Investment Market (AIM) of the London Stock Exchange and also on the main board of the London Stock Exchange;
     • A Jersey subsidiary company of a UK PLC can be used as a “cashbox”, efficiently raising public funding without the strict rules of the UK;
     • Jersey has signed broad double taxation avoidance agreement with the United Kingdom;
     • In 2012, Jersey was ranked as the highest rated offshore international finance centre in the Global Finance Centres Index, according to the City of London.
  4. Jersey companies are popular tax exempt entities used in complex international transactions because:
     • The sale of shares in a Jersey company are legally tax exempt of all Jersey taxes, including: i) stamp duty ii) GST iii) capital gains tax iv) corporation tax and v) inheritance tax.
     • A Jersey company can be incorporated with a wide variety of shares, including: i) registered shares ii) ordinary shares iii) preference shares iv) both redeemable shares and non-redeemable shares and v) shares with or without voting rights. Furthermore shares may be held and traded in an uncertificated form, with par value or no par value;
     • Cell companies are permitted under Jersey Corporate Law, including: i) protected cell companies and ii) incorporated cell companies. Consequently, our Clients create a statutory ‘ring fencing’ of assets and liabilities;
     • Money payable on the redemption of redeemable shares or on the buy-back of shares by a Jersey company may be funded from any source, including capital;
     • Winding up solvent Jersey companies is effortless because i) JFSC requirements are low ii) the entire procedure takes less than a week and iii) there is no requirement to appoint a liquidator;
  5. Jersey has some further added taxation advantages such as:
     • It has signed double taxation avoidance agreements with 13 jurisdictions including Hong Kong, China and Qatar;
     • Jersey has signed a total of 12 partial double taxation agreements that allow for double taxation on certain income of individuals, as well as the income obtained from operating ships and aircrafts. The partial double taxation treaties have been signed with reputable jurisdictions such as France, Germany, the Netherlands and Norway;
     • As Jersey is treated as a part of the European Union to freely trade goods, there are no custom duties applicable on goods traded between the two jurisdictions.

  Disadvantages of Jersey company registration

  

  1. Our Clients setting up a Jersey company should be mindful of certain challenges including:
     • Jersey resident financial services entities suffer 10% corporation tax including: i) managed funds ii) banks and iii) financial services;
     • For all commercial entities in Jersey, an annual tax return must be submitted to the Tax Authority of Jersey. Healy Consultants assists our Clients to efficiently and effectively complete this annual statutory obligation;
     • Jersey has a very limited network of double taxation treaties and is thus not the most suitable jurisdiction to form a global holding company. Learn why offshore holding companies are sometimes not the best holding vehicles. Consequently, minimizing global withholding tax may be a challenge when extracting funds from international subsidiary companies;
  2. Not all companies in Jersey are fully exempt from corporate income taxes:
     • Some companies are liable to pay an effective corporate tax rate of 20%. This is applicable for i) utility companies, ii) income and development profits from Jersey real property, and iii) profits realised on the import and export of hydrocarbon oil;
  3. Effective 1 January 2019, Jersey entities including i) investment holding companies ii) IP companies iii) trading companies iv) professional service providers and v) funds and other financial services companies are required to employ local staff and lease a physical office.
  4. The Jersey Government can also require i) appointment of local active directors and ii) the Board meetings to take place in Jersey. These extra requirements are an attempt by local Government to improve the reputation of Channel Islands companies.

• Best uses for a Jersey company

  1. Jersey is one of the world’s leading and most flexible jurisdictions to register real estate funds and alternative investment funds because:
     • Investment funds can be registered within 4 weeks without i) investment restrictions imposed and ii) any custodian requirements;
     • Globally, Jersey is perceived as a well-regulated international finance centre by institutional investors and government organisations including the Financial Action Task Force (FATF), Organization of Economic Cooperation and Development (OECD), and Securities and Exchange Commission (SEC);
     • Certain types of funds (for example, JPUTs) can be more widely marketed to institutional investors and are often listed on the Channel Islands Stock Exchange (“CISX”).
  2. Jersey is an attractive jurisdiction to form a financial company because:
     • Certain types of business in Jersey within the finance sector can apply for International Service Entity status, which means that they will be outside the scope of GST. These companies are generally deposit takers, or trust or fund services businesses. Consequently, the majority of their business is not related the provision of goods and services to Jersey residents;
     • Jersey offshore finance companies enjoy exemptions from UK controlled foreign company (CFC) rules which i) improve intra-group funding arrangements and ii) reduce financing costs;
     • An EU VAT number can be obtained for this entity;
     • The Jersey Financial Services Commission is a full member of the International Organisation of Securities Commissions (“IOSCO”).
  3. A Jersey PLC company is an excellent vehicle to prepare for a global listing because:
     • The LSE welcomes listings from the Chanel Islands as they are considered blue-chip financial centres;
     • Jersey was approved as an Acceptable Overseas Jurisdiction by the Hong Kong Stock Exchange (“HKEx”) in October 2009. Other global exchanges that welcome a listing of a Jersey company include: i) Euronext ii) NASDAQ and iii) the Australian Stock Exchange. Offshore listings are also authorized from Jersey companies on London’s Alternative Investment Market (“AIM”);
     • A Jersey PLC is similar to a UK PLC because the Jersey’s company law, the Companies (Jersey) Law 1991, is modeled on the English Companies Acts. The latter is also the basis for Hong Kong’s Companies Ordinance laws. A Jersey company’s constitution is therefore very similar to that of a Hong Kong or English company, typically providing equivalent rights and protections;
     • Jersey allows dual listing, a competitive advantage over other international financial centres;
     • The transfer or issue of new shares to investors is legally exempt of all taxes in Jersey including stamp duty and capital gains tax. Additionally, shares in Jersey companies can be traded directly through CREST, the UK share settlement system. All three major share registrars with CREST capability are located in Jersey;
     • To minimize the administrative burden, Healy Consultants Accounting Team can complete i) daily invoicing ii) monthly bookkeeping and iii) annual accounting and tax returns.