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Jersey (Channel Islands) Company

 

The Channel Islands are autonomous possessions of the British Crown, with an independent system of internal government. Jersey is the largest of the Channel Islands with a population of 91,321 (July 2007 Est.)

The Island is located off the northwest coast of France, close to the Cherbourg Peninsular. Jersey is approximately one hundred and sixty kilometres (one hundred miles) south of England, but only 20 km (12.5 miles) from France.

The Island measures 16 km by 10 (10 by 7½ miles) and has a total land area of 117 sq. km (approximately 65 miles). The islands are not part of the European Union, but are part of the Customs Territory of the European Community, by virtue of Protocol 3 of the treaty of accession of the UK to the European Community. This relationship has crucial advantages for offshore activities and the wording of the treaty is as follows "Jersey, Guernsey and the Isle of Man are not Member States of the European Union and are not part of the UK Member State. They have a special relationship with the EU provided by Protocol 3 to the United Kingdom's Treaty of Accession to the European Community. This relationship cannot be changed without the unanimous agreement of all Member States” For full details Click Here

Islanders are full British citizens, but not all are European citizens. A passport issued in Jersey or Guernsey is different from a UK passport in that it bears the words 'British Islands, Bailiwick of Jersey' or 'British Islands, Bailiwick of Guernsey'. Under the provisions of Protocol Three, Channel Islanders who do not have a close connection with the UK (no parent or grandparent from the UK, and have never been resident in Great Britain or Northern Ireland for any five-year period) do not automatically benefit from the EU provisions on free movement within the EU and consequently their passports receive an endorsement to that effect.

The Channel Islands of Jersey, Alderney, Guernsey, Herm and Sark originally formed part of the Duchy of Normandy; in fact, their present constitution stretches back nearly a thousand years to 1066 when William, Duke of Normandy, became King of England.

The Islands have remained loyal to the English Crown, they are unique in that unlike other territories of the UK; in the Caribbean or Gibraltar, they are not and never have been either part of the UK or a colonial possession. For this reason, the constitutional relationship between the Channel Islands and the United Kingdom is unique.

The islands legislative assemblies (States of Jersey and States of Guernsey or Chief Pleas in Sark), have the exclusive right to legislate on all internal matters of concern to the Islands (including taxation), the United Kingdom deals only with defence and foreign relations. This unusual relationship has developed over many centuries. Recently it has been subject to considerable scrutiny and pressure from the UK labour government, as a result it now appears to be more firmly established than ever before.

Financial services provides Jersey's main source of income, although tourism and agriculture continues to be important. The legal system in Jersey is largely based on English Common Law, but with a number of French features. The main company law is the Companies Jersey Law, 1991, as amended for overseas trade and investment most people opt for an Exempt Company.

Advantages

For the international investor, Jersey's advantages include:

    * Financial services of the highest caliber
    * Security and confidentiality
    * Government committed to supporting international financial
      activities
    * Strong economy
    * Long-term stability and independence
    * No exchange control restrictions, so capital can be freely moved in and out without formality
    * No local estate or gift taxes
    * No local capital gains taxes
    * No local income tax liability for non-resident individuals and companies, and no value added tax (VAT) for anyone
    * Excellent world-wide communications links

This diverse and almost limitless client base is again one of the key elements to the success of Jersey's professionally managed trust companies.

The network of professional contacts and clients worldwide established over the years grows daily through referrals and recommendations and ads yet more substance to an already substantial industry.

Today, the client base of many trust companies includes corporations and institutions, which have embarked on complex structured finance transactions and find the need in a structure for an independently owned and controlled vehicle in a tax neutral location.

In many cases, there may be numerous conflicts of interest and the independent is often able to provide a valuable role by putting a professionally managed third party vehicle (such as an investment holding company) into the structure.

Jersey Incorporated Companies - General Information

Introduction

The incorporation of limited companies in Jersey is dealt with by the Registrar of Companies, an officer within the Jersey Financial Services Commission and is subject to the provisions of the Companies (Jersey) Law 1991. Once incorporated, a Jersey company has all the powers of a natural person but the directors may be subject to any restrictions in its Memorandum or Articles of Association.

Names

Application should be made to the Commission, prior to incorporation, for the company's proposed name to be reserved. Detailed policies regarding names are shown on the reverse of the name application forms available from the Commission. Names must not be undesirable or misleading.

Use of the word "International" in a name is restricted and is to be used only by companies of stature, trading internationally.

There is a minimum share capital requirement also for use of the word. It is as follows:-
If used as the first word - £1,000,000
If used as the second word - £250,000
If used as the third word - £100,000.

Company names must end with "Limited", the abbreviation "Ltd", "avec responsibilité limitée", or the abbreviation "a.r.l.” The Registrar, even after incorporation, has power to require a change of name in certain circumstances subject to the right of appeal to the Royal Court.

Incorporation

Arrangements for incorporation are undertaken through an entity authorised to conduct by way of business, trust company business as defined in Article 2(4) (a) of the Financial Services (Jersey) Law 1998. A Certificate of Incorporation, once issued, is conclusive evidence of such incorporation.

Consents

Simultaneously with the submission of the incorporation papers, application needs to be made under the Control of Borrowing (Jersey) Order, 1958, for consent to the issue of shares. Certain details concerning the authorised share capital, ultimate beneficial ownership and proposed activities of the company are required to be made to the Commission, and declarations must be included to the effect that the proposed ultimate beneficial owners have not been involved in any insolvency or similar proceedings. Details of the beneficial owners are given to the Commission in strict confidence. Particular attention is given to the proposed purposes of a company by the Commission which works in conjunction with those submitting applications for consent so as to ensure that full "know your customer" principles are in operation and that the commercial and financial integrity of the Island is not put at risk.

A full and comprehensive description of proposed activities should therefore be given on incorporation as some activities may be regarded as "sensitive". A set of guidance notes as to the type of activities which may be sensitive is available from the Companies Registry at the Commission. It should be noted that some other activities may be deemed undesirable or inappropriate for companies based in Jersey.

Administration

All companies incorporated in Jersey must have a registered office in the Island and must maintain certain records in Jersey, such as a Register of Members, a Register of Directors and Secretary and minute books of directors and shareholders meetings.
It is not necessary for directors or shareholders to be resident in the Island, but many companies appoint one or more local directors in order to facilitate the holding of meetings in the Island, which need not give rise to a Jersey taxation liability if the company obtains "Exempt" status. The majority of Jersey incorporated companies have members which hold the shares as nominees for the beneficial owners in order to facilitate administration.

Directors and Secretary

The law requires a director to act honestly and in good faith with a view to the best interest of the company. It also requires directors to exercise the care, diligence and skill that a reasonably prudent person would exercise in similar circumstances. Conflicts of interest must be disclosed to the company and the Royal Court has power to make an order requiring a director to account to his company for any profit or gain if he fails to do so. A private company need only have one director but a public company must have at least two. There are limits to the indemnities which may be given by a company to directors and provisions allowing the Royal Court to disqualify unfit directors.
Every Jersey company must have a secretary and, in the case of a public company the secretary must be appropriately qualified.

Public and Private Companies

The certificate of incorporation indicates whether the company is public or private. Only a public company is permitted to circulate a prospectus offering its shares or other securities to the public. A public company must have at least two directors and must file annual audited accounts each year within a specified period. A private company may not increase the number of its members beyond thirty without becoming a public company but need not have an annual audit unless the members require it. The accounts of a private company, even if audited, need not be filed with the Registrar.

Summary

The company formation procedure in Jersey takes on average 10-14 days. The company will be incorporated using your chosen name.  ORCA will endeavour to keep the procedure as simple as possible but it must be kept in mind that the legal requirements are more difficult than in other jurisdictions such as Delaware, the Seychelles, Belize or the British Virgin Islands which are our four recommended locations. In some cases however a Jersey company can be the ideal vehicle and ORCA will administer the preparation and filing of all registration forms on your behalf. Once we receive the filing confirmation from the Jersey authorities, we will email you with the full registration details. We will then forward the all the official certificates and documentation by Courier to your preferred location. Keep in mind that companies incorporated in Jersey are subject to accounting and auditing which can add to operating expenses. Most other offshore jurisdictions for example Delaware, the Seychelles, Belize or the British Virgin Islands are exempted from this requirement. This can be an important issue regarding the traceability of funds. In the event that you need to have a company based close to the UK or Europe an alternative to a Jersey company might be a UK company which is wholly owned by a company in Delaware, the Seychelles, Belize or British Virgin Islands. To look at the option please contact we and we can run through the possibilities that will achieve your objectives.

KEY CORPORATE FEATURES

GENERAL
Type of entity – Exempt
Type of law – Common
Shelf company availability – No
Our time to establish a new company - 10-14 days
Minimum government fees (excluding taxation) - £ 600
Corporate taxation – Nil
Double taxation treaty access – No

SHARE CAPITAL OR EQUIVALENT
Standard currency – GBP
Permitted currencies – Any
Minimum paid up - £ 1
Usual authorised - £ 10,000

DIRECTORS OR MANAGERS
Minimum number – Normally 2
Local required – No
Publicly accessible records – No
Location of meetings – Anywhere

MEMBERS
Minimum number – Two
Publicly accessible records – No
Location of meetings – Anywhere

COMPANY SECRETARY
Required – Yes
Local or qualified – No

ACCOUNTS
Requirement to prepare – Yes
Audit requirements – No
Requirement to file accounts – No

OTHERS
Requirement to file annual return – Yes
Change in domicile permitted – No

COMPANY INFORMATION

TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT
Tax Exempt

PROCEDURE TO INCORPORATE 
By submission of the Memorandum and Articles of Association to the Financial Services Commission, together with notification of the Registered Office address, the names, nationalities and addresses of the directors and shareholders, character references relating to the beneficial owners and a full description of the proposed company's trading and/or investment activities.

RESTRICTIONS ON TRADING
A Jersey Exempt Company cannot trade within Jersey or undertake the business of banking, deposit taking, insurance, assurance, reinsurance, fund management, asset management (other than its own assets) or any other activity associated with the banking, finance and insurance industries. Full details of these and other 'sensitive' activities are available on the Financial Services Commission website, www.jerseyfsc.org

POWERS OF THE COMPANY
A Jersey company has all the powers of a natural person.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
English.

REGISTERED OFFICE REQUIRED 
Yes. Must be maintained in Jersey.

NAME APPROVAL REQUIRED
Yes, by formal request to the Financial Services Commission.

SHELF COMPANIES AVAILABLE 
No, due to disclosure requirement of beneficial ownership and trading activities.

NAME RESTRICTIONS 
A name that is similar to or identical to an existing company or registered entity. Names of well-known multi-national companies, without prior written consent. Names that imply illegal activities. Names that imply royal or government patronage, either local or foreign.

NAMES REQUIRING CONSENT OR A LICENSE
The following names or their derivatives: Jersey, bank, building society, savings, loans, insurance, assurance, reinsurance, building society, Chamber of Commerce, council, co-operative, trust, trustees, finance, international or their foreign language equivalent.

LANGUAGE OF THE NAME 
The name of a Jersey registered company can be in any language using the Latin alphabet as long as the authorities are advised of the meaning on the name application form. The name application will then be granted, or otherwise, under the current guidelines regarding the use of certain words.

SUFFIXES TO DENOTE LIABILITY
A company with limited liability must end its name with Limited or Ltd or with the French equivalent Société avec Responsabilité Limitee or SARL.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO GOVERNMENT AUTHORITIES
Yes, before incorporation. If beneficial ownership changes the Financial Services Commission has to be informed immediately.
 

COMPLIANCE

AUTHORISED SHARE CAPITAL 
The normal authorised share capital is £10,000 or its foreign currency equivalent, although issued capital may be nominal e.g. £2.00 Stamp duty is payable on higher amounts of capital.

MINIMUM ISSUED CAPITAL
Equal to the value of the shares issued to the subscribers, normally two shares of £1.00 paid or its foreign currency equivalent. All issued shares must be paid in full in cash.

CLASSES OF SHARES PERMITTED
Registered shares, preference shares, redeemable shares, non-redeemable shares and shares with or without voting rights.

TAXATION 
Exempt Companies are exempted from all forms of Jersey taxation. Resident Jersey companies pay income tax at a rate of 20% on world-wide income.

DOUBLE TAXATION AGREEMENTS 
Yes, with United Kingdom and Guernsey, but they only apply to resident individuals and companies.

LICENSE FEES
Exempt companies pay an annual tax exemption fee of £600.

FINANCIAL STATEMENT REQUIREMENTS
Required for Resident Companies, not for Exempt, although the Financial Services Commission reserves the right to call for accounts at any time.

DIRECTORS 
The minimum number of directors required by law is Normally 2; they must be natural persons. If a company has a sole director, the sole director cannot be the company secretary. The director may be of any nationality and need not be resident in Jersey. Normally we recommend appointing two directors.

COMPANY SECRETARY 
A company secretary is required who can be a natural person or body corporate. Can be of any nationality and need not be resident in Jersey.

SHAREHOLDERS 
The minimum number of shareholders is Two. However, if the company is to be a wholly owned subsidiary then only one shareholder is required.

MAIN ADVANTAGES OF JERSEY
TAX EXEMPT COMPANIES

- pay no tax on income arising outside the Island;
- pay no tax on interest arising from Jersey bank deposits;
- are not subject to any capital taxes within the Island;
- make no income returns (other than for Jersey sourced income excepting bank deposit interest);
- can appoint local directors and have board meetings in Jersey;

Incorporation Charges

Incorporation Fee including registered office and agent     £1500    $2400     €1800

Normal ongoing maintenance costs after the first year                 

Government Exemption fee*     £600     $995     €720

Filing fees                               £130     $205     €156

Local agents and office fee*      £770     $1200    €924

Total normal ongoing costs      £1500    $2400   €1800

Any nominee services, which you may require are in addition to the above*
If you require an internet domain registration to accompany the formation click here


UK / Ireland020 7175 0041
(International +44 20 7175 0041)
US / Canada1 954 866 5986
(INTERNATIONAL +1 954 866 5986)
Australia and New Zealand+61 2 9191 7472
(INTERNATIONAL +61 2 9191 7472)
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