The main basis for Jersey Company Law is English Common Law, which is practiced worldwide. ‘Exempt Companies’ are companies which are based in Jersey but carry out their main activities abroad. In fact, these ‘exempt companies’ are specifically prohibited from carrying out business on the island, because this would be a breach of their tax exemptions. The operating currency on the island of Jersey is the Jersey Pound, which is completely equivalent to, and interchangeable with, the British Pound (GBP).
Benefits of registering the company in Jersey
There are a multitude of reasons why Jersey is so attractive as an offshore destination, including, but not limited to, the following:
1. Zero Income Tax
The exempt companies described above are not required to pay corporate tax, except in some circumstances. For instance, exceptions exist for rental and property development companies and utility companies, which pay 20% tax on profits, and financial services companies such as banks and other financial institutions, which pay 10% tax on profits.This is markedly different than the situation for normal ‘resident’ companies, which pay a standard rate of 20% corporate tax.
2. Low Goods and Services Tax
The goods and services tax in Jersey is much lower than that found in other jurisdictions worldwide. This is equivalent to Value Added Tax (VAT) in other countries, and it is remarkably low at only 5% on the island.
3. Low Capitalization Cost
Unlike in other notable offshore jurisdictions, Jersey does not require the offshore investors to bring in a lot of capital at the start of the incorporation process. This is a real advantage. Indeed, in Jersey, to being the incorporation process, it is only required that £1 in share capital be issued.
Specificity of the registering
The financial services commission on the island of Jersey must be informed of any changes in the beneficial ownership of the company once it comes into being. Companies must be renewed annually in February. An automatic reminder of this will be sent every year. Once incorporated, some information about the ‘exempt’ companies are considered to be on the public record. This includes information about legal names, addresses and date of births of the company directors and shareholders. These can be freely accessed by the public.
All exempt companies must have a registered office on the island of Jersey. All Jersey companies must have an individual or body nominated as secretary. This must be somebody different than the company director. All companies should keep true and accurate financial records, though these do not need to be shared with the registrar of companies in the case of private companies.
Term of registering
The entire process of forming an exempt Jersey company is expected to take between 10 and 14 days. ‘Ready made’ or ‘shelf companies’ are not available in the Jersey jurisdiction, because of the regulations surrounding disclosure of trading activities and the rules of beneficial ownership.
Company Name Requirements
There are quite a few rules and regulations regarding what is a suitable company name for incorporation in Jersey. For instance, all Jersey company names must be entirely unique, and must not relate to any other existing, products, companies or entities. Company names should also not imply royal or governmental or multinational backing, without written consent, and the use of the word ‘international’ is strictly reserved for companies whose dealings are truly international.
In addition, company names may be submitted in any language which uses the Latin alphabet, but a suitable English translation must be included at the time of submission.
Finally, any names that includes terms with specific meanings such as bank, trust, council, cooperative etc. require a license to prove they appropriately describe the services that company provides. All limited liability company must be denoted as such by use of the word ‘limited’ or the abbreviations ‘Ltd’ or ‘SARL’.