Private company limited by shares
Jersey is a reputable tax-neutral jurisdiction and one of the top financial centers worldwide with a flexible regulatory framework and a long track record of political and economic stability.
Companies incorporated under the Companies (Jersey) Law, 1991 benefit from a fast and simple incorporation process and advantageous tax treatment. Corporate income is subject to a 0% corporate tax rate and there are no taxes on dividends paid and received and capital gains.
Furthermore, there is no stamp duty on the transfer of shares in Jersey companies, and these may be held and traded in an uncertificated form.
Companies engaging financial services are taxed at 10%, although collective investment funds and securitization vehicles can elect to be tax-exempt from income not derived from land or property.
Utility companies and income from real property are subject to a 20% income tax rate.
The Companies (Jersey) Law, 1991 does not require a minimum capital to incorporate a private limited company, this can be in any currency, and shares may be issued with or without par value.
In Jersey, there are available corporate vehicles as protected cell companies and incorporated cell companies.
Protected cellular companies are entities made up of a core and several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.
Although the cells of a protected cell company do not have a separate legal personality, assets and liabilities of each cell must be kept separated and separately identifiable from the assets and liabilities of the protected cell company (core) and of each of the others cell.
Cellular companies have both core capital and cellular capital, which is the capital invested in individual cells.
Creditors of a cell are unable to seek recourse from the assets of any of other cells or of the core. This corporate vehicle provides protection contagion to fund promoters as an umbrella unit trust.
In addition, this corporate structure provides several cost savings such as avoiding to setting up new entities, lower costs on corporate governance, company administration and compliance.
Incorporated cell companies, is similar to a protected cell company, but each cell is a separated legal entity. The rights of the shareholders in the cells of an incorporated cell company are fettered in that the board of each cell is the same as the board of the ICC. Cells cannot act independently of the incorporated cell company that created them but allows each cell to act as independent legal entities with the capacity to contract amongst themselves.
The ICC submits a combined annual validation and only the core company is required to create separate accounts.
Both protected cell companies and incorporated cell companies have become a popular corporate vehicle with the investment fund industry and with the insurance industry, especially captive insurers.
Jersey’s special constitutional position has been recognized by the European Union in the protocol No.3 attached to the United Kingdom’s Act of Accession to the EU. It remains to be seen how BREXIT will affect Jersey’s relationship with the European Union.
Jersey Companies carrying out relevant activities need to fulfill substance requirements. Relevant activities are:
- Banking
- Insurance
- Fund management
- Financing and leasing
- Headquartering (provision of senior management or provision of management advice)
- Shipping Business
- Distribution and service center – purchase goods from (to resell) or provide services to non-resident affiliates
- Intellectual property business
- Pure equity holdings
To meet substance requirements, relevant businesses will need to be controlled and managed from Jersey, conduct its core income-generating activities within Jersey, meet the adequacy test: an adequate level of qualified employees, an adequate level of expenditure and adequate physical presence (e.g. offices) according to the relevant activity.
With respect to high-risk intellectual property businesses, like in other jurisdictions, more comprehensive requirements will need to be met.
Companies subject to economic substance requirements will need to provide an annual return to the relevant authorities to assess whether they have met applicable requirements.
The tax-neutral environment and pro-business regulation make Jersey companies a suitable vehicle for several business purposes, such as commercial trading, investing in property, securities, and other assets, or as a group holding company.
Legal
Country code – JE
Legal Basis – Mixed (Customary, French civil and Common)
Legal framework – Companies (Jersey) Law, 1991
Company form – Private company limited by shares (LTD)
Liability - The liability of the shareholders is limited up to the amount of the shares they hold.
Economic Substance –
Jersey Companies carrying out relevant activities need to fulfill substance requirements. Relevant activities are:
- Banking
- Insurance
- Fund management
- Financing and leasing
- Headquartering (provision of senior management or provision of management advice)
- Shipping Business
- Distribution and service center – purchase goods from (to resell), or provide services to, non-resident affiliates
- Intellectual property business
- Pure equity holdings
To meet substance requirements, relevant businesses need to be controlled and managed from Jersey, conduct its core income-generating activities within Jersey, meet the adequacy test: an adequate level of qualified employees, an adequate level of expenditure and adequate physical presence (e.g. offices) according to the relevant activity.
Pure equity holding companies are subject to a narrowed economic substance test in which such companies are not required to be directed and managed in Jersey or to conduct its core income-generating activities in Guernsey
Companies subject to economic substance requirements will need to provide an annual return to the relevant authorities to assess whether they have met applicable requirements.
Share capital – There is no minimum capital requirement other than issuing at least 1 share at the time of incorporation. There is no statutory requirement for capital to be fully or partly paid on incorporation. Shares may be issued at par value or at a premium but may not be issued both types of shares. Shares may be registered shares, ordinary shares, preference shares, redeemable shares, non-redeemable shares and shares with different rights and preferences on dividends, voting and surplus assets upon liquidation. Bearer shares are not permitted.
Shareholders – Jersey companies may be formed by one or more shareholders who can be either natural or legal persons, residents or non-residents. Details of shareholders are publicly disclosed. Nominee shareholders are allowed.
Directors – At least one director is required, who may be a natural person or a legal entity. If a legal entity, as long as the legal entity is registered under the Financial Services (Jersey) Law 1998 and it does not have itself, corporate directors. Directors’ details are available to the public.
Secretary – The appointment of a secretary is required, who can be either a legal or natural person. Typically, the secretary is the registered office provider regulated in Jersey.
Registered Address – Private companies should have a registered office in Jersey, typically provided by a regulated corporate service provider.
General Meeting – Annual general meetings are mandatory but can be held anywhere. The first annual general meeting must be held no later than 18 months from the incorporation of the Jersey Limited company. Thereafter, annual general meetings should be held in intervals not more than 22 months. However, if all the shareholders state it in a written document, the company may waive the requirement for annual meetings.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can be re-domiciled as a Jersey limited company, and vice versa.
Compliance – Limited companies must keep accounting records for 6 years, which may be kept in or outside Jersey.
An annual return must be submitted prior to the end of February each year.
The tax return must be filed within 7 months after the end of the tax year.
An Economic substance return must be submitted if the company is subject to economic substance requirements.
Financial statements do not need to be audited, and they do not need to be filed either.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Mixed (Customary, French civil and Common) Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- - Minimum issued capital
- - Minimum paid up capital
- GBPAny Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Taxes
Tax residency – A company is tax resident in Jersey if it is incorporated in Jersey or its place of central management and control is in Jersey. A company incorporated in Jersey, subject to certain conditions, may be considered as non-resident if it is managed and controlled elsewhere.
Basis – Resident companies are taxed on a worldwide basis, while non-resident entities are subject to tax on their income derived from Jersey.
Tax rate – Corporate tax standard rate is 0%.
- it is registered under the Financial Services (Jersey) Law 1998 to carry out investment business; trust company business; fund services business as an administrator, custodian, or registrar in relation to an unclassified or unregistered fund; or general insurance mediation business as described in either class P or class Q in Part 3 of the Schedule to the Financial Services (Financial Service Business) (Jersey) Order 2009
- it is registered under the Banking Business (Jersey) Law 1991
- it holds a permit under the Collective Investment Funds (Jersey) Law 1988 as an administrator, registrar, or custodian
- it holds either a Category A or Category B permit under the Insurance Business (Jersey) Law 1996, or
- it is a company trading in the provision of credit facilities to customers by way of making any advance or granting of any credit, including (but not limited to):
- the provision, in connection with the supply of goods by hire purchase, leasing, conditional sale, or credit sale, of credit in instalments for which a separate charge is made and disclosed to the customer, and
- any assignment to the company of an advance or credit repayable by the customer to a person other than the company.
A 20% tax rate applies to Jersey-based utility companies, such as telephone, gas, and electricity companies. Additionally, income from Jersey real estate, including rental income, property development profits, and income from exploiting Jersey land (e.g. quarrying activities) is subject to tax at 20%. Companies involved in oil importation and supply are also taxed at 20%. As of 1 January 2022, a company in the cannabis industry (i.e. one that cultivates cannabis plants, processes cannabis plants for any purpose, or distributes, sells, or further processes cannabis plants that have been cultivated or processed) is also subjected to the 20% tax rate.
Large corporate retailers are also in scope of the standard 20% tax rate.
Capital gains - Capital Gains are exempt from taxation.
Dividends - Dividends received from resident entities are generally subject to tax at applicable rates. Dividends received from foreign entities are usually tax-exempt.
Interests - Interest income is taxed at applicable rates.
Royalties – Royalty income is usually subject to taxation at applicable rates.
Foreign-source income – Foreign-source income is usually taxable at applicable rates. Tax credits for foreign tax paid are usually available up to Jersey tax payable.
Withholding taxes – There are no withholding taxes in Jersey.
Losses – Losses arising from taxable income may be carried forward indefinitely. Carryback of losses is permitted under certain circumstances.
Inventory – Inventories are usually valued at the lower of cost or net realizable value valuation. First in first out method (FIFO) is permitted, but the Last in first out method (LIFO) is not allowed for taxation purposes.
Anti-avoidance rules – Jersey has not enacted transfer pricing regulations, but an anti-avoidance provision in tax law may be applied by the Comptroller of taxes if a transaction leads to avoidance or reduction of Jersey income tax.
Thin capitalization and controlled foreign companies rules are not applicable.
Labor taxes – Employers are required to make contributions to the Social security fund at 6.5% on resident employees’ income up to GBP 4,150 per month, above this amount a 2% apply on monthly salary up to GBP 13,828.
For their part, resident employees are required to make contributions to the Social security fund at 6% on their income up to GBP 4,150 per month.
Personal income tax – An individual is tax resident in Jersey if he or she spends six months in the island in a year, or maintains his or her place of abode in the island or visits the island year on year for a substantial period of time.
Individuals ordinarily residents are liable to tax on their worldwide income, while residents but not ordinarily residents are subject to tax on their Jersey-source income and their foreign income remitted to Jersey.
Non-residents are taxed on their income arising in Jersey, except for interests, dividends, and profits from Jersey companies and bank interests.
Income is taxed at the lower of 20% on net income or progressive rates up to 26%.
Capital gains are not taxable.
Other taxes – The standard rate of GST is 5% (VAT) and generally applies to supplies of goods and services made to Jersey customers. Companies with taxable supplies of more than GBP 300,000 per annum are required to register for GST.
Customs duties apply for goods imported from outside of the European Union.
A Stamp duty from 0% to 8% applies on the transfer of Jersey real property.
There are no additional property taxes more than the 20% income tax payable from rental or development of land and property.
There are no inheritance and wealth taxes in Jersey.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 0% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- 6.00% Social Security Employee
- 6.50% Social Security Employer
- 20% Personal Income Tax Rate
- 5% VAT Rate
- 0 Tax Treaties
Country details
The Bailiwick of Jersey is a British Crown Dependency located in the English Channel, to the west of the coasts of Normandy, France. The territory comprises the island of Jersey (which constitutes the greater part) and a series of uninhabited archipelagos such as Les Minquiers, Les Écréhous, and Les Pierres de Lecq among others. Jersey is part of the archipelago of the Channel Islands, which also includes the Bailiwick of Guernsey.
Although the island is not part of the United Kingdom, neither the European Union nor the European Economic Area, its international representation, defense, and good governance is the responsibility of the Government of the United Kingdom.
It has a population of approximately 100,000 people and the capital is Saint Helier.
The native population has as its mother tongue a Norman subdialect of French. But today English is the most widely spoken language.
The head of government is an elected administrator called Bailiff, and the head of state is the lieutenant governor, who is appointed by the king or the queen of England.
In accordance with Protocol 3 of the UK's Accession Act (1972), it belongs to the European Union Customs Union, thereby benefiting from the free movement of industrial and agricultural goods.
As a member of the Common Travel Area (CTA), the free movement of citizens of the European Economic Area is also permitted.
Jersey issues its own notes and coins, the Jersey Pound (JEP), which circulate along the pound sterling and have the same value.
Jersey has one of the highest GDP per capita in the world.
Like Guernsey, the island of Jersey is based on financial services, tourism & hospitality, retail and wholesale, construction and agriculture. Financial services contribute about sixty percent of the island's economy, and the island is recognized as one of the main offshore financial centers.
The main agricultural products are potatoes and dairy products. Jersey's milk source is a small breed of cow that has also been recognized (though not generically) for the quality of its meat. On a small scale, the production of organic meat has been reintroduced in an effort to diversify the industry.
Services
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