Company Registration Global Registration

How to Incorporate a Company in Jersey?

Jersey is a British Protectorate. It is considered to be effectively self-sufficient for investors in terms of low corporate taxation. The financial service commission of Jersey is considered to be strict and primary seeks the high end of the offshore market. In this article, we will discuss how to incorporate a company in jersey?

What are the Advantages of Company Formation in Jersey?

• A Jersey Company requires a local registered office for the purpose of functioning.
• In respect of the issue of shares, a Jersey Company can issue both registered and bearer shares.
• There lies no specific minimum capital requirement to be infused.
• There is no requirement of adopting the official company seal although most companies do it.
• Jersey is considered to have a developed and favourable corporate law with a high level of well-educated
• For the exempt companies, there is no requirement for maintaining the accounts of annual summaries to be filed.

Taxation Aspect

The Corporate tax rate in respect of conducting business in Jersey is 20 % for a company.  Where the real or beneficial ownership does not rest, the tax rate will not apply even if management and control are carried on behalf of the non-resident.

What Types of Companies can be Incorporated in Jersey?

Par Value Company: It is a type of Company which issues shares which have a nominal capital value. The company maintains the share capital and a share premium. There is no transfer made from Capital Redemption Reserve although transfer can be done to a share premium account from other accounts. The memorandum of association of the Company should state the initial authorized share capital and the par value. Although there is no requirement of minimum authorized or issued share capital.

No par Value Company: it is a type of Company which issues shares having no nominal value. The proceeds of the issue of shares need to be credited to the capital account. The shares having no par value must be stated in the Memorandum of Association. In this type of company, distribution is allowed out of the stated capital accounts of no par value. This helps in a high degree of flexibility where shareholders invest in a mindset of recovering the capital. These companies can in future days eligible to be converted to par value and vice versa.

Guarantee Company: These types of companies have abandoned the concept of shares altogether.  Under these types of companies, the Guarantor guarantees to contribute a fixed amount on the event of the company’s liquidation. It is often suitable for charitable, social, political, or another nontrading type of purposes.

Unlimited Company: Both par and no par value company can be a limited liability or unlimited liability company. A person holding shares in the unlimited company has unlimited liability to contribute to the assets of the company at the time of winding up of the company. In this type of company, the members can effectively underwrite the Company’s liabilities to the extent of own personal assets. An unlimited company carries on a legal personality. These types of companies can reduce the number of its unlimited shares without the consent of the court. Investors generally go for this type of company with respect to being driven by the regulatory and international planning considerations.

Single Member Company: A single-member company is a type of company which has a single shareholder without the loss of the corporate veil.

Public Companies: The main clause of a jersey public company is that it has to state that it’s a public company in its memorandum of Association.

Private Company: A jersey Private Company is one which is subject to the additional provisions such as restriction of members to maximum 30 etc.

Cell Companies: there are two types of cell companies in Jersey. The first one is the protected cell company (PCC) and the other one is Incorporated Cell Company (ICC). These type of companies are flexible in nature and are widely used for financial transactions. Cell Companies can be a public or private company, with limited or unlimited liability.

What is the process of Company Incorporation in Jersey?

1. Name: The first and foremost step is the selection of a name. The name should not be similar to the existing one. Also, the name should not be misleading or undesirable. The name of a limited company should end with the word “Limited”, “Ltd”, “Limited”. Whereas a public limited company should have “public limited company”, “PLC” or “plc”. The registrar of Companies has the power to approve the name.
2. Memorandum and Articles of Association: these set out the basics of the company. The following details must be mentioned in the Memorandum and Articles of Association, such as:

• Whether the proposed company is public limited or private limited
• Whether it is par value or no par value
• The main objects of the company
• The name of the Company
• The full address of the Company
• The subscriber’s details along with other details as required.

There lies no statutory limit on the capacity of the company to take business transactions. However, if required the objects are liable to be restrictive. The articles set out the rules and regulations governing the internal management of the Company. The memorandum and Articles of Association must be filed with the Registrar of Companies^[1] along with the incorporation fee and an application for incorporation. These documents need to be signed by a person who is licensed to carry out company business under the Financial Services (Jersey) Law 1998. The investors have an option of fast track mode also in the filing of the application.

After this, a certificate of incorporation is issued within a time span of 2-3 days of the filing of the application along with the documents.

Mandatory Requirements

Characteristics	Feature
Income Tax	Jersey tax at 20% on its worldwide income
Official language	English
Business to be conducted Internationally	Yes
Authorized Capital	Not required
Share transfer tax	Not required
Minimum number of Directors	One
Nonresident Directors	Allowed
Corporate Directors	Allowed
Minimum number of shareholders	One
Meetings of Directors/shareholders	Anywhere
Corporate seal	Mandatory
Auditing of Accounts	Not required
Filing of Accounts	Not required
Incorporation time	Around 1-4 days

Conclusion

An offshore company based in Jersey is best in terms of conducting international financial services business and also engaging in trading with the UK or France thereby entering into real estate is a beneficial option. Registering an offshore company in Jersey is a regional or global holding company and receive regular investment income including dividends and management fees. Usually, Jersey taxes corporate worldwide income at 0%, except on income from real estate within the territory which is 20% and financial services which are 10%. Jersey is ranked number one in terms of corporate tax rate worldwide. In Jersey, the capital gains are not subject to tax. Thus Jersey is considered to be rightly upheld as a jurisdiction which offers excellent, contemporary corporate and trust laws. Also, it is worthwhile to mention that it has a strong regulatory environment which helps in achieving the highest degree of professional corporate trust and professional accountability. Jersey is considered to have a world-class professional infrastructure and a wide choice of international law and accountancy firms to support the jersey companies and trusts. Thus those investing in the UK via the offshore company and trust structures are advised to consider the use of Jersey as their corporate or trust domicile.