Investing in Jersey

Jersey

Situated 100 miles south of the British coast, Jersey boasts a population of 87,000 and is one of the leading global offshore centres, where financial services make up 60 per cent of the local economy.

Jersey is not strictly part of the UK although it has been governed by the crown as a separate possession for the past 800 years, and all islanders are classed as British citizens. Its legal system is based on both English law and Norman customary law and is administered by the island’s Royal Court.

Queen Elizabeth II is the Head of State and the UK represents the island in all foreign affairs including defence, but Jersey does retain autonomy on domestic issues, negotiating directly where foreign matters pertaining directly to the island are concerned. However, it is currently taking steps to become a full member of the Commonwealth within its own right.

The island is not represented in British parliament but instead has own government known as the States of Jersey whose members are elected from the residents and comprise 53 elected members, of which there are 50 who are able to speak in the house as well as cast their vote, and three other members who may speak but are unable to vote.

As far as the rest of Europe is concerned, Jersey is classed as ‘special territory’ which is part of both the UK and European Union, along with the common customs territory. However it is considering its position as far as the Eurozone goes and, should the UK decide to adopt the Euro at some point in the future, Jersey may decline and opt instead to maintain the pound on its own.

Tax

In recent years Jersey’s financial services industry has contributed a major part of the island’s tax revenue.

In May 2006, Jersey’s Treasury Department published its proposals for two main elements of the reforms which have the effect of shifting the tax burden from the Island’s financial services industry to its resident population.

In deciding on their fiscal policies, the States of Jersey were acutely aware of the danger of losing existing or future business if the Island were to be perceived as uncompetitive.

Tax in Jersey is, in most cases, lower than the tax rates imposed upon UK residents and because of this, many shrewd investors are using Jersey as a tax haven for their income and investments.

Jersey residents holding shares in investment companies, under the new rules that will be introduced in 2008, will be taxed proportionate to the gross profits of the company, with no deductions for interest or management expenses.

Those with shares in trading companies will only be taxed where profits are retained in the company in excess of three years at a rate of 20 per cent of the shareholder’s marginal rate of income tax.

Jersey has provided an increasingly diverse range of services in the Banking, fund and trust sectors to personal and corporate clients.
The long tradition of using company structures to enhance the financial planning of individuals, families and companies, remains.
In more recent years, the experience gained by Jersey professionals in helping to create bespoke investment solutions for private clients living across the globe, has been turned towards increasing amounts of institutional and corporate business.

Investing and Banking

Jersey remains a leading global centre for Banking services designed especially for expatriates and private Banking clients seeking asset protection and wealth management in a tax benign location.

There is a growing appetite for sophisticated investment solutions in the marketplace and Jersey based practitioners are actively moving to re-package ‘traditional’ corporate and institutional type investment products to meet the requirements of these more sophisticated private clients.
The investment industry has explored the potential that exists in markets such as Asia and the Middle East.

The industry believes it has opportunities to forge business links with China and Hong Kong, particularly in the area of raising capital and channelling inward foreign investment.

Chris Blampied, Managing Director of the Royal Bank of Canada (Channel Islands) Limited and Head of Banking, British Isles believes that Jersey has a lot to offer expatriates and international investors.

He commented: “What investors are looking for is an environment where they can place their hard earned cash that is stable with good regulation, somewhere where there is a good financial infrastructure with good legal and financing firms.

“In terms of Jersey, it has good financial aspects for international investors and, of course, the island is a lovely place for investors to come and visit their money.

“I think that once you look beyond what the island can offer as a whole, you can see what the individual banks can offer and many of them have developed a lot recently in terms of technology and financial products.”

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