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Executive Summary
The Bailiwick of Jersey is a British Crown dependency, and consists of the islands of Jersey, Minquiers, Ecrehous, Pierres de Lecq and others. Together with the bailiwick of Guernsey, they constitute a territory known as Channel Islands. Jersey is not a part of the UK, but the UK authorities are responsible for the defense of the bailiwick. Jersey is not a member of the EU, but is a part of the Common Travel Area.  English and French are official languages of Jersey, while Jerriais is a recognized regional dialect. Saint Helier is its capital, which is situated on St. Aubin’s Bay.  The bailiwick of Jersey covers 116 sq km, and it does not have internal water resources.

Jersey is a parliamentary democracy . The UK Queen is the head of the state, represented by the appointed governor, who, however, does not have an extended involvement into Jersey’s political life, as the bailiwick enjoys a high level of autonomy. The legal system unites principles and practice of Norman customary law, statute and English law.

Economy is based on highly developed financial industry, tourism, e-commerce and agriculture. Being one of the leading offshore financial centres, financial industry contributes more than 60% to the economy. Income per capita in Jersey is one of the highest in the world, which is beaten only by two other small states such as Luxembourg and Bermuda.

The Pound Sterling (GBP) has been adopted as the official currency, but Jersey issues its own banknotes and coins, that circulate together with UK, and Guernsey coinage within the jurisdiction.

Geography
Jersey is located in the English Channel, approximately 22 km from the coast of Normandy, France. Temperate climate with mild winters and cool summers is characteristic to the country.  The average annual temperature is  approximately 12 degrees C, but Jersey has a major number of sunny days in the whole UK. The Southern part of the island’s landscape is characterized by sandy bays, while the Northern part is rich with cliffs.

Map, Flag and Coat of Arm


Types of Company

Private Company Limited by Shares

There are no unlimited companies or those limited by guarantee in Jersey. Limited Companies in this jurisdiction can only be limited by shares. A private company is every corporate entity, which is not public. If a company does not plan to conduct a business on the territory of Jersey, the company formation process is rather fast and relatively inexpensive.  Company accounts must be filed with Jersey revenue authorities, but they need not be audited. In order to be able to conduct a business within the jurisdiction, detailed information on planned activities must be submitted to the authorities, and a license or permit to conduct a described business, should be received from the governmental body.

Exempt Private Company
A private company could apply to obtain an exempt status in case it fulfilled the following conditions: Jersey residents must have no direct interests in the shares of the company; beneficial owner(s) should be disclosed to the authorities; company must have paid all the taxes in the previous years of operations. The exempt status lasts for one year, and all the foreign income are fully untaxed. However, starting from January 2009 the standard corporate tax rate in Jersey has been reduced to 0%, and it is no longer possible to obtain an exempt status for a company. All the companies that had obtained such a status in previous years are treated as resident companies, which are liable to 0% of corporate tax.

Public Company Limited by Shares
A company which has 30 members or which states in the Memorandum of Association to be a public company, is considered as such. Every year it must file its audited accounts with the Companies Registrar. This company may offer its shares to the general public.

Branch of Overseas Company
A company which intends to establish its local presence in Jersey should follow the same procedures as those companies which conduct a business within the jurisdiction. However, not being a Jersey company, it will not be required to register its corporate details or file annual accounts with Jersey authorities.

International Business Company
Jersey residents may not hold shares in an international business company, and any company incorporated in Jersey or a branch of an overseas company may obtain a status of and International Business Company. Beneficial ownership must be disclosed to the authorities, but it is not kept on the public record. This company type has been abolished in 2006 and is no longer available for incorporation.

General Partnership
Private persons and corporate entities can become partners of a general partnership, and their liability is unlimited. Details of a partnership need not be registered.

Foreign Partnership
In case a partnership is managed from abroad, it is considered to be non-resident of Jersey, even if some partners might be residents within the jurisdiction. The partnership will be taxed on activities conducted and income gained within Jersey.

Limited Partnership
Companies and private persons can be both general and limited partners of a limited partnership. In order to register a limited partnership, a declaration with the name of general, but not limited partners must be submitted to the registrar.

Protected Cell Company
Cell companies may be created in Jersey and are often used for investment purposes. It comprises the possibility to form separate legally recognized cells within one single structure, and each cell is established as a separate Jersey company – Incorporated Cell Company. Before 2006 cell companies were considered Protected Cell Companies, which did not have a separate legal personality. Such an innovation is considered to provide a major level of flexibility to investors, particularly in the insurance industry.

Local Trust
Trust law is based on English law, and both discretionary and purpose trusts can be incorporated in Jersey. In 2006 a significant amendment to the 1984 law has been introduced, which defines in a more precise manner and provides major rights to a trust settlor, including the right to appoint or remove trustees, amend the terms of trust, appoint or remove investment advisor and/or investment manager. Jersey trust law does not recognize foreign judgments. There are no registration or audit requirements for a trust, however, accounts must be kept. Jersey trust may be redomiciled to a foreign country by changing its trustees, as well as a foreign trust can transfer its domicile to Jersey.

Unit Trust
There is no specific legislation in Jersey that aims to regulate unit trusts. As a result, they are treated in the same way as local trusts, in terms of registration, operations and taxation.

Taxation

Personal
For taxation purposes an individual may be resident, ordinary resident or non-resident. For income tax liabilities an individual is resident in Jersey for income tax purposes if he is physically present on the island for more than six months in a year, of for at least three months over a period of four years. Residence and ordinary residence (a greater degree of presence within the jurisdiction) makes individual’s income be taxed on his world-wide gains, while non-residents are taxed only on income derived from activities conducted in Jersey.

There is no capital gains tax, inheritance tax or estate duty, no purchase or sales, as well as no capital transfer tax. Jersey does not have a VAT, but it has introduced a goods and services tax (GST), the flat rate of which is 3%. Main government income derives from income tax at a rate of 20% and social security contributions, even though due to the taxation system reform, the jurisdiction is becoming ever less dependent on direct taxation.

Property owners and occupiers are liable to low parish taxes. There are no tariff barriers (custom duties) between Jersey and the EU member states; Jersey applies a common external tariff of the EU with countries outside the union. Stamp duty of 0.5% is payable on real estate transactions, which  increases to a maximum of 3% on transactions above GBP 50,000.

Corporate
The tax year coincides with a calendar year staring on 1st January through 31st December. Tax returns must be submitted within seven months of the end of the accounting period and tax, if any, must be paid within nine months.

Starting from January 2009 a ‘zero/ten’ corporate tax system has been introduced, within which a standard corporate tax rate became 0%, but companies that offer specific financial services are taxed at a rate of 10%.

Following the EU Savings Tax Directive, withholding tax is levied on interest payments on savings made by EU member states’ residents at a rate of 20%.

 
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