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Jersey

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 an 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.

Par value companies can issue shares with a nominal capital (or par) value. It will be maintained a share capital account in respect of the nominal capital and a share premium account in respect of any premium over the nominal capital paid for such shares. Fully paid-up shares may be redeemed from any source if a solvency statement is signed by all directors.

No par value companies issue shares without a nominal value. The proceeds from the issue of shares must be credited to a stated capital account, and the number of shares may be unlimited. Distributions may be made from stated capital accounts, adding flexibility to shareholders who wish to recover capital.

Par value companies can freely switch to no par value companies and vice versa.

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 a several ring-fenced protected cells, creating separate portfolios of assets and liabilities which are statutorily segregated.

Although the cells of a protected cellular 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 was the first jurisdiction to regulate a Bitcoin fund, allowing tat traditional investments types such as pensions to be invested in Bitcoin and secured by the same security features in commonly used financial products.

In addition, on September 2016 came into effect  the Proceeds of Crime (Miscellaneous Amendments) (Jersey) Regulations 2016 (the Regulations), bringing cryptocurrency exchanges within the ambit of Jersey's anti-money laundering and terrorist financing regulation.

Cryptocurreny exchanges in Jersey are required to register in and supervised by the Jersey Financial Commission.

Jersey has started to exchange information for tax purposes through Common Reporting Standard (CRS) in 2017 and currently, Jersey has in force over 40 tax information exchange treaties (TIEa) and 12 double taxation agreements (DTA).

All in all, the tax-neutral environment, its flexible structuring and its pro-business regulation makes Jersey companies a suitable vehicle for several business purposes, such as commercial trading, investing in property, securities and other assets, cryptocurrency businesses or as a group holding company.

Taxes

Tax residency – A company is tax resident in the 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%.

A 10% tax rate applies to companies conducting financial services. Collective investment funds and securitization vehicles can elect to be tax-exempt from income not derived from land or property.

Utility companies such as telephone, gas and electricity companies pay income tax at a 20% rate.

Income from real property, such as rental income, property development profits or income from exploiting land is subject to a 20% tax.

Companies that import or supply oil are also taxed at 20%.

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 realisable 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 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, 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 – Goods and services tax is 5%.

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

Jersey
GBP
Saint Helier
Europe
e n , p t
90812

The Bailiwick of Jersey is a dependency of the British Crown 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 are the responsibility of the United Kingdom Government.

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

We can help you incorporate a Company limited by shares in Jersey.
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