Company and Jurisdictions
|The Companies (Jersey) Law 1991, as amended and subordinate legislation.||GBP 10,000 is the maximum figure for which minimum costs apply.|
|Annual government fees:||Corporate Taxation:|
|GBP 150 filing fee, plus GBP 600 exempt tax.||20%, but flat annual rate of GBP 600 payable for exempt companies.|
|Time to incorporate:||Ready-made companies:|
|10 working days.||No.|
|Minimum members:||Registered office required:|
|Two, individual or corporate.||Yes, must be maintained in Jersey at the address of a licensed management company or law firm.|
|Local registered agent:||Minimum number directors:|
|Yes.||One, individuals only. A register of directors must be filed with the Registrar but is not open to public inspection.|
|Officer to be locally resident:||AGM required:|
|Annual return required:||Financial statements to be prepared and/or audited:|
|Each company must file a short statement indicating that it has traded mainly outside Jersey and has complied with the various statutory requirements.||Company is required to keep financial records reflecting financial position of the company.|
|Balance sheets to be filed:||Share register required:|
|No.||Yes, at registered office|
|To be filed with Registrar:||Open to public inspection:|
|Exchange controls:||Redomiciliation permitted:|
|No.||Yes, in and out.|
|Language of incorporation:||Confidentiality:|
|English.||No specific statutory provisions governing confidentiality in relation to companies, but English law, which applies within the jurisdiction imposes a common law duty on professionals to keep the affairs of their clients confidential.|
|Bearer shares permitted:|
- Blue chip reputation.
- Expensive; most Jersey practitioners now use cheaper jurisdictions.
- Details on beneficial owner must be disclosed to the authorities prior to registration.
- Time-consuming and cumbersome to arrange.
OECD Harmful Tax Practices
Jersey was among 35 jurisdictions identified by the OECD in June 2000 as meeting the technical criteria for being a tax haven. On 22 February 2002, the Jersey government signed a commitment to improve the transparency of its tax and regulatory systems and establish effective exchange of information for tax matters with OECD countries by 31 December 2005.
Tax Information Exchange Agreement (TIEA)
On 4 November 2002, the US and Jersey signed a Tax Information Exchange Agreement. The agreement provides for the exchange of information on a variety of tax investigations, paving the way for audits that could uncover tax evasion or money laundering activities. It was to have effect from 1 January 2004 or sooner with respect to criminal tax matters and from 1 January 2006 with respect to all other tax matters. Currently, similar agreements are being negotiated with other countries, among them members of the European Union.
EU Savings Tax Directive
The EU Savings Tax Directive is to be applied to all Member States, as well as their associated and dependent territories. Jersey elected to apply the withholding (retention) tax option rather than the automatic exchange of information. The retention tax will only be introduced at the same time as EU member states and the named third countries, including Switzerland, which means 1 July 2005 at the earliest. The retention tax regime does not rule out an option for customers to choose exchange of information instead, it just gives them that choice if they wish.
Financial Action Task Force (FATF)
Jersey’s regulatory regime was reviewed by the FATF in 2000. It was found to have a “comprehensive” anti-money-laundering system and was not therefore identified by the FATF in June 2000 as a non-cooperative country or territory (NCCT) in the fight against money laundering.
Mutual Legal Assistance Treaties (MLATs)
Jersey is able to assist overseas authorities through participation in Mutual Legal Assistance Treaties (MLATs) between the UK and other countries. The 1988 Agreement Concerning the Investigation of Drug Trafficking Offenses and the Seizure and Forfeiture of Proceeds and Instrumentalities of Drug Trafficking, as amended in 1994, was extended to Jersey in 1996. Application of the 1988 UN Drug Convention was extended to Jersey on July 7, 1997. Jersey authorities have also put in place sanction orders freezing accounts of individuals connected with terrorist activity.
The Jersey Financial Service Commission (JFSC) is also able to cooperate with regulatory authorities. The JFSC reached agreements on information exchange with securities regulators in Germany, France, and the US. The JFSC has a memorandum of understanding for information exchange with Belgium. In October 2003, the JFSC signed a MoU with the International Organisation of Securities Commissions (IOSCO). It obliges signatories to share information about the illegal use of their securities and derivatives markets with each other. In signing up to the MoU, Jersey joins another 24 members.
As a matter of policy Jersey does not normally enter tax treaties. However, double taxation agreements exist with the UK and Guernsey, and a limited agreement with France exempting a resident of either country from tax in the other country on profits from shipping and air transport.The UK and Guernsey treaties do not conform to the OECD standard model treaty. The agreement with the UK specifically excludes dividends and debenture interest from its provisions. International Business Companies are not entitled to the benefits of the UK double tax treaty.
|Full Country Name:||Bailiwick of Jersey|
|Status:||British crown dependency|
|Area:||116 sq km|
|Population:||90,502 (July 2004 est.)|
|Capital City:||St. Helier|
|People:||British and Norman-French descent|
|Languages:||English (official), French (official), Norman-French dialect spoken in country districts|
|Currency:||British pound (GBP); note - there is also a Jersey pound|
|Government:||Parliamentary British crown dependency with internal self-government|
|Legal system:||English law and local statute; justice is administered by the Royal Court|
|Head of State:||HM Queen Elizabeth II|
Jersey is the largest and most southerly of the Channel Islands, which are situated in the Bay of Mont St Michel. Jersey is just 14 miles (22.5km) from the coast of France and 100 miles (161km) south of mainland Britain. About 30% of the population is concentrated in the capital St. Helier. In the summer, Jersey is usually the warmest place in the British Isles.
The Channel Islands were annexed to the Duchy of Normandy in the 10th Century, and became part of the Anglo-Norman realm after the Battle of Hastings in 1066, when William the Conqueror gained the English Crown. In 1204 King John lost Normandy to the French and the Islanders chose to remain loyal to the English Crown. As a reward they gained rights and privileges, which to this day are not subject to the British Parliament but only to the Queen - or King - in council.
The constitutional relationship with the UK is the product of 800 years of custom and usage and is not affected by changes of government in the UK. This relationship has been confirmed by Royal Charters, which over the centuries secured the independence of the Island's judicial system from the English courts and granted important privileges including freedom from UK taxes.
Over the centuries the Island has fought off many invasions. In 1781 "The Battle of Jersey" took place when French troops under Baron du Rullecourt attempted to take over the Island. A young English officer Major Peirson led the British Army and the local militia to victory in the battle that took place in St Helier’s Royal Square. During WWII the Channel Islands were the only part of the British Isles to be occupied by the Germans from 1940-1945.The official language of Jersey is English, but Jersey French is the native language of the Island and is a blend of Norse and Norman French. The dialect itself is called Jèrriais. It is still spoken in the country districts. Until the 1960s French was still the official language of Jersey and to this day is still used by the court and legal professions.
Government and Politics
|Head of State:||Queen Elizabeth II (since 6 February 1952)|
|Head of Government:||Lieutenant Governor and Commander in Chief Air Chief Marshall Sir John Cheshire (since 24 January 2001) and Bailiff Philip Martin Bailhache (since NA February 1995)|
|Cabinet:||Policy and Resources Committee appointed by the Assembly of the States; President of the Policy and Resources Committee – Senator Pierre Horsfall|
|Elections:||None; the monarch is hereditary; Lieutenant Governor and Bailiff appointed by the monarch|
Unicameral Assembly of the States (55 voting members - 12 senators (elected for six-year terms), 12 constables or heads of parishes (elected for three-year terms), 29 deputies (elected for three-year terms); the Bailiff and the Deputy Bailiff; and 3 non-voting members - the Dean of Jersey, the Attorney General, and the Solicitor General all appointed by the monarch)
Elections: last held NA (next to be held NA)
Election results: percent of vote - NA%; seats - independents 52
Royal Court (judges elected by an electoral college and the Bailiff)
Political parties and leaders
None; all independents
Jersey is a British Island, but is not part of the UK, nor is it a colony. The Island's link with the UK and the rest of the Commonwealth is through Her Majesty Queen Elizabeth II, who as the Sovereign is the Head of State. The Lieutenant Governor, through whom official communications with the Lord Chancellor on behalf of Her Majesty’s government in the UK are directed, represents the Sovereign in the Island.
The Island's parliament is the States of Jersey, which consists of 53 elected members from a mix of Island wide and parochial constituencies. Executive government is currently managed by committees of the States, but in September 2001, the States resolved to move to a ministerial system of government arrangements for which are in the course of being developed.Acts of the UK Parliament do not apply routinely to the Island. For convenience however, UK legislation does from time to time include the Island directly or by extension by order of Her Majesty in Council, with such amendments as may be required; but in each case only with consent given that the Island sends no representatives to Westminster.
Basic economic facts
GDP (2003 est.): USD 3.6 billion
Per capita GDP (2003 est.):USD 40,000
Main industries: agriculture: 5% industry: 2% services: 93% (1996)
The Channel Island economy is based on international financial services, agriculture, and tourism. Tourism accounts for 24% of GDP. In recent years, the government has encouraged light industry to locate in Jersey, with the result that an electronics industry has developed alongside the traditional manufacturing of knitwear.
Jersey is an international finance centre with 51 banks and more than £150 billion deposited in the Island at any one time - 60% in foreign currency. The Island also has a Fund Management sector with over £100 billion under management and nearly 200 Trust Companies, all regulated by the Jersey Financial Services Commission, established in the Island.
Finance provides 60% of Jersey’s GDP and some 60% of Government tax income. The finance industry is based upon stable government, proximity to both the UK and continental Europe, the significant body of expertise in a wide range of financial services and a competitive tax environment.
The financial services industry consists largely of banks; mutual funds; insurance companies (which are largely captive insurance companies); investment advice, dealing, and management companies; and trust/corporate administration companies. In addition, the companies offer corporate services, such as special purpose vehicles for debt restructuring and employee share ownership schemes. For high net worth individuals, there are many wealth management services.
The International Monetary Fund (IMF) conducted an assessment of the anti-money laundering regime of Jersey in October 2003. The IMF found Jersey’s Financial Services Commission (JFSC), the financial services regulator, to be in compliance with international standards, but it provided recommendations for improvement. The next IMF inspection is planned for 2006.
After consultation with the financial services industry, the JFSC issued a position paper (jointly issued with Guernsey and the Isle of Man) that sets out a number of proposals for further tightening the essential due diligence requirements that financial institutions should meet regarding their customers. The position paper states the JFSC’s intention to insist on affirming the primary responsibility of all financial institutions to verify the identity of their customers, regardless of the action of intermediaries. The paper also states an intention to require a progressive program to obtain verification documentation for customer relationships established before the Proceeds of Crime (Jersey) Law came into force in 1999.
About 30,000 Jersey companies are registered with the Registrar of Companies, who is the Director General of the JFSC. In addition to public filing requirements relating to shareholders, the JFSC requires details of the ultimate individual beneficial owner of each Jersey-registered company to be filed, in confidence, with the Commission. That information is available, under appropriate circumstances and in accordance with the law, to U.S. and other investigators.
In addition, a number of companies that are registered in other jurisdictions are administered in Jersey. Some companies, known as "exempt companies," do not have to pay Jersey income tax and are only available to non-residents. Jersey does not provide "offshore" licences. All regulated individuals are equally entitled to sell their services to residents and non-residents alike. All financial businesses must have a presence in Jersey, and management must be in Jersey.
Jersey has established a Financial Intelligence Unit (FIU) known as the Joint Financial Crime Unit (JFCU). This unit is responsible for receiving, investigating, and disseminating suspicious transaction reports (STRs).
On 7 July 2004, the States of Jersey voted in favour of a new tax regime for business designed to comply with the OECD initiative on “harmful tax practices”. As a result of the vote, Jersey will introduce a zero rate of corporation tax, with a 10% rate for financial services companies from the year 2008 onwards.
By convention the UK has assumed responsibility for the Island's foreign affairs, but even in those matters, the UK only acts with the consent of the States of Jersey. Accordingly, the States can, and frequently does, legislate independently to implement international agreements. The administration is in effect parallel with that of the UK rather than subordinate to it.The Island has a special relationship with the European Union by virtue of Protocol 3 to the UK's Treaty of Accession to the European Economic Community. The JFCU is a member of the Egmont Group.