Company Establishment & Administration

Establishing a company in Jersey

Jersey is a tax neutral jurisdiction and using a Jersey company for structuring international financing transactions can be beneficial in terms of company law provisions and tax treatment. Additional benefits include separate legal identity, limited liability for shareholders and ease of transfer of ownership. Share capital can be denominated in any currency and issued in various classes, including redeemable shares. The ability to incorporate “no par value” companies has added yet more flexibility. These features enable Jersey companies to be structured to meet a wide variety of business purposes. 

The principal piece of legislation governing Jersey companies is the Companies (Jersey) Law, 1991 (the “Companies Law”), which is a comprehensive, modern statute.

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Why use a Jersey company?

Jersey companies are used in a wide range of transactions, such as: 

• ‍‍Investing in property, securities and other assets;
• Acting as a group holding company; 
• Holding and exploiting patents and copyrights;
• Facilitating the collection of commissions and consultancy fees;
• Employing an internationally based work force.

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How to Incorporate a Jersey company

Incorporation is commenced by the payment of a fee accompanying an application to the Registrar of Companies. Fees charged by the Registrar of Companies for incorporation of a Jersey company (or a cell of a Jersey company) are based on a sliding scale depending on how quickly you require the incorporation.

The application to the Registrar of Companies is made by the subscribers to the Memorandum of Association of the company (i.e. its proposed first shareholders) and includes the Articles of Association, together with details of: 

• The proposed name; 
• The proposed first shareholders;
• The first directors;
• The authorised share capital;
• The type of company (public or private, par value or no par value, ete.);
• The proposed activities / intended use; and
• The ultimate beneficial ownership of the company. 

The Articles of Association registered upon incorporation can include specific provisions such as regarding classes of shares, rights attaching to shares, dividend and voting rights, rights to winding up or return of capital, appointment and removal of directors and pre-emption rights. Alternatively, “plain vanilla” Articles can be registered initially and then amended by special resolution (a resolution passed by a majority of not less than two-thirds of shareholders entitled to vote at general meetings). 

As is to be expected with all reputable financial centers, Jersey has regulations regarding client due diligence requirements. A questionnaire will need to be completed, together with the requisite due diligence in relation to, typically, the directors and beneficial owners of the company. Any information so obtained does not become publicly available. The questionnaire will include disclosure as to the proposed activities of the company which will be forwarded to the Registrar of Companies. Any sensitive activities that pose a potential risk to the reputation of Jersey will require specific consent before incorporation. 

As part of the incorporation process, consent must be obtained under the Control of Borrowing (Jersey) Order, 1958 (“COBO”). COBO, amongst other things, regulates the issue by Jersey entities (whether companies, limited partnerships, unit trusts, etc.) of shares, units, interests and other securities. All Jersey companies must obtain prior approval in the form of a COBO consent to the issue of shares. Application for such consent is submitted to the Jersey Financial Services Commission together with the incorporation documentation. 

Jersey Company Structures 

The following company structures are available in Jersey: 

• Limited Companies (companies whose members’ liability is limited to the amount unpaid on their shares); 
• Unlimited Companies (the liability of the members of unlimited companies on a winding up of the company is unlimited); 
• Guarantee Companies (the liability of members of guarantee companies is limited to the amounts they guarantee). 

Cell Companies 

Cell companies are companies that, once established, have the ability to create cells separate from themselves, each of which may hold separate assets (and liabilities), therefore enabling the assets and liabilities of each cell to be isolated from the assets and liabilities of the cell companies themselves and of any other cells. This creates statutory “ring fencing” of assets. The Companies Law permits the incorporation of two types of cell companies, protected cell companies and incorporated cell companies. 

Limited Life Companies 

Jersey companies may be incorporated with a limited or set period of existence. On incorporation, the company’s “lifespan” is defined by specifying a liquidation date in the Articles of Association, or by specifying the occurrence of a particular event. Such companies are granted favourable treatment by a number of revenue authorities in that they are regarded in the same manner as a partnership (as opposed to a corporation). 

Limited companies (including cell companies) are by far the most common type of Jersey company and this Briefing Note focuses on such companies. 

Par Value Shares or No Par Value Shares 

Jersey companies may be incorporated with either ‘par value’ shares or ‘no par value’ shares (companies cannot have both). 

As the name suggests, par value shares have a par or nominal value. 

No par value shares have no par or nominal value, are not denominated in any currency, and the number of authorised no par value shares can be (but does not have to be) unlimited. Save for those distinctions, no par value shares have the same features as par value shares, with their rights set out in the Articles of Association. 

The key difference between a par value and a no par value share is an accounting one. Sums paid up on no par value shares are credited to a company’s “stated capital account”, instead of having a nominal share capital account and a share premium account as you would with a par value company. 

Public Companies

A company is a public company if it has more than thirty shareholders or the memorandum of Association states that it is a public company. In addition to the distinguishing feature mentioned above, the following are the principal differences between private and public companies:

• Only a public company may issue a prospectus inviting the public to acquire or apply for securities;
• The registers of directors and shareholders of a public company may be inspected by the public;
• The secretary of a public company must hold appropriate qualifications specified in the Companies Law;
• The accounts and auditors’ report of a public company must be presented before a general meeting of the company, and filed with the Register of Companies, within seven months of the end of the company’s financial year.

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Taxation of Jersey Companies

All Jersey resident companies are charged to Jersey income at 0%, save for:

1. Jersey regulated financial services companies (which are charged to Jersey income tax at 10%); or 
2. Jersey utility and property income companies (which are charged to Jersey income tax at 20%). 

Accordingly no deduction should be made in respect of Jersey income tax from dividend or interest payments made by a Jersey company.

Corporate services we can provide

Corporate vehicles

We establish and administer the following corporate vehicles: 

• Companies based in Jersey, and other jurisdictions; 
• Jersey protected cell companies and incorporated cell companies; 
• Jersey limited partnerships; 
• Jersey private funds; 
• Purpose trusts; 
• Charitable trusts; 
• Foundations. 

Corporate administration and management 

Our services include:

• Formation services; 
• Provision of registered office address;
• Provision of experienced professional directors/trustees;
• Company secretarial services;
• Maintenance of statutory records;
• Arranging board meetings to include the preparation of board packs and subsequent board minutes;
• Arranging shareholder meetings and agreements;
• Preparation and filing of annual returns;
• Bookkeeping and financial reporting;
• CRS, FATCA and country-by-country reporting;
• Dissolution and winding up services. 

Provision of company directors/corporate entity officers 

All companies require a competent board of directors and a strong administration team in order to prosper. Whilst we will in certain circumstances provide limited corporate services to our clients, our preference is always to have a presence on the board. This allows our clients to benefit from our accrued knowledge and experience of the regulation and governance requirements of the jurisdictions in which the entity operates. It also allows the entities to more easily evidence economic substance in their jurisdictions of incorporation. Having us on the board also allows companies to evidence the necessary economic substance. Our services include: 

• Oversight of company administration in accordance with local legal requirements;
• Organisation of and attendance at regular board meetings either in person or by conference;
• Proactive and responsive dialogue with the client and advisers;
• Timely assistance with the calling of meetings and provision of documents;
• Timely review and execution of documents;
• Access to our network of international advisors. 

Corporate relocation and domiciliation

We have seen an increasing number of our clients join the trend of other international institutions that are considering moving key personnel, headquarters or other operations to Jersey. The reasons for this are varied, but it is clear that Jersey offers an established, business-friendly jurisdiction within a favourable time zone and geographical region where it is relatively easy to quickly form a company of substance that has a local presence. Our team is able to assist with such a move in the following ways: 

• Where appropriate assist with any application for a local business licence including assistance with the necessary business plan; 
• Liaise with relevant government departments and agencies such as Locate Jersey and Digital Jersey; 
• Formation and administration of a suitable Jersey entity;
• Provide dedicated telephone and IT infrastructure; 
• Provide ring-fenced office space within our own office; or assist with finding separate office space as appropriate; 
• Assist with recruitment of local staff or where appropriate second our own staff to provide initial support under contract with the company; 
• Undertake bookkeeping and accounting and assist with local filings including tax; 
• Provide full secretarial services;
• Provide HR assistance including employee contracts and employee handbook;
• Payroll services, bank account opening, provision of signatories.