Companies

Why have a Jersey Company?

As is to be expected, a Jersey Company offers the dual advantages of:

• A universally recognised individual legal personality separate from that of its shareholders, and
• The privilege of limited liability for its shareholders (particularly important where the company is to be active commercially).

Limited partnerships are permitted for persons wishing to limit their exposure to commercial risk without wanting to establish an entity with a separate legal personality.

Jersey companies tend to fall into one of two categories:

• Those incorporated by private individuals in order to either provide an entity able to hold assets such as land, portfolios of investments, intellectual property, yachts to be entered onto the Jersey Register of British Shipping and Trading Companies, whether operating locally or offshore, and
• Those incorporated by multi-national commercial undertakings as subsidiaries through which to run such functions as treasury work, captive insurance, collective investments and employee share option schemes or pension funds.

The taxation of Jersey companies

The basic presumption is that a Jersey company is liable to income tax on its profits at the rate of 20%. This rate of taxation has remained unchanged since July 1940. However, where the company is beneficially owned by non-residents and it does not trade in the island, it may apply for exempt status and pay instead £600 per annum, irrespective of the amount of profits realised in that year. For those companies whose obligations towards foreign revenue authorities make it helpful, International Business Company status can also be obtained under which tax is paid in Jersey on profits arising from international business on a sliding scale of from one-half to two per cent, the rate being determined by discussion with the Comptroller of Income Tax.  There are no other taxes payable in Jersey by Jersey companies.