Jersey

Jersey Managed Companies

Tax Planning Jurisdictions

Jersey, like Guernsey had an extensive overhaul of its tax system primarily as it feared being 'black-listed' by the Organisation of Economic Co-operation and Development (OECD) as having "harmful tax practices". At a corporate level companies are taxed on their worldwide income if they are deemed to be managed and controlled from Jersey – The criteria to establish whether management and control is in Jersey or outside of Jersey is:

  • Can it be shown that the Jersey Company is fiscally resident in the jurisdiction of management and control?
  • If yes, is there at least a local corporate tax rate of 20%?
  • If the answer is no on either front, then management and control and tax liability remains in Jersey

The "Zero-10" Corporate Tax Regime – Jersey together with Guernsey introduced a "Zero-10" tax regime, which despite its name applies to a sliding scale of individual taxation for companies (technically there are no specific corporate taxes) between 0% and 20% where:

  • The Zero Individual Corporate Tax Rate applies to the vast majority of standard Guernsey companies;
  • The 10% Individual Corporate Rate is applicable for certain banking operations, domestic insurance businesses, fiduciary businesses, insurance intermediary and management businesses;
  • The 20% Individual Corporate Rate is applicable to local Guernsey utility companies and profits arising from local rental and development activities.

Notwithstanding the above, it should be noted that Jersey and Guernsey continued to face problems with the OECD until they introduced a 'deemed distribution' of dividends scheme to all locally managed companies where-by local residents were prevented from 'rolling-up' profits in Jersey/Guernsey companies and avoiding the 20% individual tax rate for individuals. In précis, Jersey companies are no longer favoured for companies carrying out international trading as they run into immediate difficulty due to the almost complete lack of a tax treaty network with the rest of the world. However, they can still be used as passive holding vehicles and the well regulated/respected local professionals often prove attractive to those who emanate from less regulated or safe environments. At a personal level, whilst Jersey may not have the attractiveness it once had, it nevertheless remains very attractive for those physically taking up residence as apart from the 20% income tax there are no capital gains, wealth or inheritance taxes. than on a worldwide income tax basis.

Synopsis

Jersey is a potentially very attractive jurisdiction for wealthy individuals and also for Jersey trust and Jersey private interest foundation (Introduced under the Foundations (Jersey) Law 2009) administration but not as an international trading company location.

Star Ratings

Corporate registration efficiency

5

Cost

4

Confidentiality

5

Local Banking facilities

5

Legal system

5

Political stability

5

Reputation

5

jersey

Location

Jersey is located just off the Northern French coast very near to the smaller islands of Guernsey and Alderney. All of the Channel Islands are British Crown Protectorates but not part of the United Kingdom or European Union.

Relationship with the UK

Jersey is a Crown Protectorate with an autonomous local government – The local population are mostly of either French (indigenous) or British ethnic backgrounds with French culture being quite prominent. The local currency is pegged to the British Pound issuing distinctive local notes and coins.

Vessel Registration

Jersey is one of the major luxury yacht/motor boat registration areas in Europe with competitive registration fees and local management facilities. All Jersey registered vessels have the right to fly the British 'Red Ensign' Flag but the fact that Jersey is not part of the EU VAT system can cause problems in certain circumstances. For more information please discuss with a SCF Consultant

Benefits

  • Pro-business environment
  • No capital gains or inheritance taxes
  • Favourable trust and private interest foundation area
  • Highly reputable local licensed professionals
  • English speaking
  • No VAT
  • Excellent communications
  • Favourable treatment of overhead trusts
  • It is a common law jurisdiction
  • Company law based on UK Companies Acts
  • Not part of the EU
  • All major UK banks represented
  • Major vessel registration 'flag of convenience' area
  • Good confidentiality provisions
  • OECD Compliant jurisdiction

Double Taxation Treaty Network

Guernsey does not have a double taxation treaty network save for treaties with the United Kingdom, France and some part treaties with countries such as Ireland.

Administration & Accountancy Services

Managed Companies

SCF Accountancy & Law can provide Jersey private interest foundations, trusts and companies either in a resident or non-resident format.

Set-Up & Annual Maintenance Fees

Please see the separate Jersey Managed Company Quotation Leaflet

The Ownership of Guernsey Companies

'Overhead' Discretionary Trusts or Private Interest Foundations

For tax planning reasons, normally pertaining to anti-avoidance provisions in a beneficial owner's 'home' country or place of fiscal residence, and/or because of a need to 'ring fence' assets many clients owning a Guernsey company select to have it owned not by themselves but by an overhead discretionary trust or private interest foundation (PIF) which can be located in a jurisdiction such as Liechtenstein (locally known as a Stiftung), the Seychelles or even of course Jersey itself.

For more information on discretionary trusts and/or private interest foundations please refer to the separate information leaflets.