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Relocating to Jersey: You and your business

Carey Olsen

November 2009
 

Introduction
For decades, Jersey has opened its doors to a limited number of new residents – individuals and businesses attracted not only by the Island's charm and beauty, but also by the many advantages to be gained from living here. Jersey is a particularly attractive location for high net worth individuals and their families, who benefit from the very highest standards of living and the fiscal autonomy Jersey enjoys from the United Kingdom. The Island has close proximity to Europe but is not part of the European Union.

Sharing the same time zone as the UK, Jersey is within easy reach of mainland Britain and continental Europe by air and sea. From London there are at least 12 flights to the Island every day, and with journey times of less than an hour it is easily possible to live in Jersey and attend morning meetings in the City. Scheduled flights also depart from more than 25 UK regional airports and major European centres such as Paris and Zurich. Regular ferry services operate from Poole, Weymouth and Portsmouth – by fast car ferry the journey time is around 3½ hours. Services also operate to France and the other Channel Islands, and these destinations can be reached in about an hour. At 45 square miles in size, most road journeys in Jersey take a matter of minutes.

Michelin-starred restaurants, beautiful beaches, open countryside and a warm micro-climate combine to offer the best of all worlds. Jersey represents an appealing blend of British home-from-home and continental sophistication. And its position as a world-class international finance centre should not be overlooked. It is the perfect place for families, with excellent education and healthcare facilities, and a low crime rate.

In recent years the number of wealthy individuals to be granted residence has increased owing to a new policy designed to attract, among others, entrepreneurs and principals of investment and funds businesses.

Carey Olsen
Carey Olsen plays an important role in relocations of people and their businesses. We are the largest law firm in the Channel Islands and can provide a 'one-stop shop' for people wishing to move to Jersey. We provide clear and comprehensive advice on all aspects of relocation, including:

• introductions to the key people involved in the residency application process;
• assistance in putting together the information required by local authorities;
• advice on buying property in the Island;
• advice on Jersey tax and the method and consequences of becoming a Jersey tax resident; and
• advice on the relocation of business interests to Jersey, including the relocation of employees where necessary.

Your move to Jersey
There are no travel restrictions to Jersey for those holding a British passport or coming from a member state of the EU. Other passport holders should check with the British Embassy or High Commission to determine whether they will need to obtain a visa or entry clearance prior to arriving in Jersey.

Owing to the number of potential immigrants, special housing rules have been introduced and developed to aid population control in the Island and to maintain housing at affordable prices for current residents. The authorities allow restricted housing access to people who are not otherwise entitled to live in the Island by granting 'residential qualifications' to certain categories of people.

The category which is available to prospective new residents, whose residence is justified on social or economic grounds, is known as the '1(1)(k)' qualification. Immigration to Jersey on this basis is at the discretion of the Jersey Housing Minister and there is no prescribed limit on the number of 1(1)(k) qualifications that the Minister may grant each year. Each application is considered on its own merits, with regard to factors such as:

• the applicant’s likely contribution to tax revenues;
• the business/social background of the applicant;
• the applicant's likely business activities (if any) in Jersey; and
• any other non-economic factors from which the Island may benefit if the qualification is granted.

Successful 1(1)(k) applicants retain their residential status as long as they remain resident in Jersey. They may purchase property which has been classified or approved as suitable for their occupation. Such properties are typically priced at £1 million or more.

Carey Olsen has excellent relationships with all the key individuals involved in processing an application for a 1(1)(k) qualification and can help to put together an application designed to give a client the strongest possible case.

High value residency - the tax criteria
In order to be granted a 1(1)(k) residential qualification, there are certain requirements which applicants should meet, such as providing the Jersey Comptroller of Income Tax with evidence of a sustainable minimum annual tax contribution of not less than £100,000.

As part of the application process, a clearance is obtained from the Jersey income tax authorities based on the disclosure of assets, income streams and structures. This clearance provides the applicant with certainty of their tax treatment.

Carey Olsen has a strong relationship with the Jersey income tax authorities and we are happy to negotiate with them on behalf of our clients.

Tax in Jersey - you
The standard rate of income tax in Jersey is 20%. There is no capital gains tax, inheritance tax, gift tax or other ‘wealth’ taxes in Jersey. Where a person has been granted 1(1)(k) status, the rate of tax applied to a person's non-Jersey income is reduced once that income has reached a certain level. The rate applied to non-Jersey income above £1 million is 10%, and above £1.5 million the applicable rate is 1%. However, appropriate pre-immigration tax structuring can mitigate an individual's liability to Jersey tax above the minimum contribution of £100,000.

Jersey source income is always taxed at 20%. This includes any income in the hands of an individual that is generated from a Jersey company. However, generally it is possible to structure the tax affairs of a client in a manner which can mitigate this liability. It is essential that tax advice on these issues is taken at an early stage in the process because once 1(1)(k) status has been granted, it becomes more difficult to make arrangements to mitigate the liability.

Our tax experts will be happy to assist in advising on the best arrangements.

Tax in Jersey – your business
Most Jersey companies are subject to tax at a rate of 0% on their worldwide income, although income accruing in respect of any land or building in Jersey is subject to tax at a rate of 20%.

A higher rate of 10%, however, applies to the income of a restricted sector of local financial services companies. Most financial services businesses moving to the Island will not be taxed at this 10% rate. There is no capital gains tax in Jersey.

Notwithstanding the general rate of 0% for Jersey companies, Jersey tax legislation contains certain look through and deemed distribution provisions. Accordingly, it is important to take advice on these matters before relocating to Jersey. Our tax experts are happy to advise on the tax implications of moving a business to Jersey or starting a new business in the Island.

The regulation of financial services business: Moving your business to Jersey
Jersey's financial services industry’s regulator is the Jersey Financial Services Commission, whose remit is to maintain the high reputation of the Island through prudent and proportionate regulation. The success of this is evident from the IMF's recent report on regulation in the Island which put Jersey at the very top of the list of 120 international finance
jurisdictions it has reviewed.

Regulated activities include investment business, funds services business and trust company business. As one of the leading Jersey law firms, Carey Olsen can provide clear and concise advice on the regulation applicable to any financial services business seeking to establish itself in Jersey. We offer step-by-step assistance throughout the application process for clients who wish to obtain regulated status. The firm has excellent working relationships with key individuals at the Jersey Financial Services Commission.

Employing individuals in Jersey
All businesses require a licence before starting to trade or employing staff in Jersey. Work permits are not required, however, for British Citizens or nationals of member states of the European Economic Area.

Once a staffing licence is granted, an undertaking may manage staff numbers within the terms of that licence; additional staff may be applied for at any time. The authorities may also request business plans and financial details to be submitted together with evidence that appropriate efforts have been made to identify suitable local candidates for vacancies.

Essentially employed individuals - the 1(1)(j) qualification

In some circumstances, it is possible for a business operating in Jersey to apply to the Housing Minister for certain positions to be designated with the 1(1)(j) qualification. This category of housing qualification is available for those who are deemed to be ‘essentially employed’.

Normally, this would apply where the necessary expertise required by the business could not be found locally.

An employee having the benefit of a 1(1)(j) qualification is entitled to purchase or lease Jersey property. It should be remembered that the role of the Jersey authorities is to regulate and manage the demands made upon the resources of the Island, as well as to protect Jersey’s commercial integrity. The principal factor they will consider is the staffing level required by the new business, and the extent to which the new business will try to source its staff from within the Island.

Carey Olsen's team has considerable experience in making such applications on behalf of clients. We can also help to put together the necessary documentation required for licence applications and advise on compliance with the terms of licences issued.

Property in Jersey: Buying your house in Jersey
Only certain properties in Jersey are available for purchase by people holding a 1(1)(k) qualification. These homes include many of the finest properties in the Island. Most local property agents offer a discreet and confidential service to assist in finding the perfect home for new residents. Carey Olsen can assist in providing introductions.

Once a suitable property has been identified, Carey Olsen's property team will give clear and comprehensive advice on the acquisition process, from start to finish.

Jersey has a unique conveyancing system which finds its roots in Norman law. Whether a property is acquired directly or through a holding company, a significant amount of research and drafting is required to ensure that a client's position is protected.

Carey Olsen's property team includes three partners and several experienced associates and conveyancers. With considerable experience in Jersey property negotiations, we have a particularly strong record in assisting successful 1(1)(k) applicants in their property purchases.

Buying or leasing property for your business in Jersey
Our commercial property team advises an international and Channel Islands client base on a broad range of commercial and development real estate projects.

Our clients include the major developers and lenders in the Islands. The team is recognised for its considerable experience in dealing with all aspects of commercial property work and gives priority to speed, efficiency and excellent service standards. Should your business require commercial premises, we can assist in providing introductions to the key commercial agents in Jersey and can advise you on all aspects of your commercial lease arrangements.

Lifestyle - quality of life and other considerations
Jersey offers an outstanding high quality of life in terms of lifestyle, leisure, safety and accessibility. Well served for schools, with modern facilities and low pupil-teacher ratios, Jersey students consistently outperform their mainland counterparts with higher than average results at GCSE and A-level. There is excellent provision for children and young adults with special needs.

The Island boasts a comprehensive range of health and social services. Health professionals provide the highest standards of modern medicine and expertise. Jersey has around 150 general practitioners and dentists.

With countless clean, sandy beaches and numerous smaller bays, there are 50 miles of Jersey coastline to explore. Harbours and inlets punctuate the coast and the bathing waters are among the cleanest in Europe. The north coast rises to steep cliffs; the south coast has sandy expanses. The reefs off the west coast create excellent surfing and windsurfing. There is something for everyone. Sport plays a huge part in Island life, and the high quality facilities include:

• six golf courses, including three 18 hole championship courses and three 9 hole courses;
• an array of water sports including sailing, surfing, scuba diving, windsurfing, kayaking, swimming and jet skiing;
• 96 miles of cycling network and all types of walking terrain – coastal paths, cliff paths, woodland, valley, beach and reservoir walks, suitable for every age and ability; and
• football and rugby clubs, a number of equestrian centres and a world class shooting range.
The Island is a yachtsman's paradise, offering some of the best cruising waters in the world with secret anchorages, modern marinas, traditional harbours and many bays. Jersey marinas hold the coveted five gold anchors award from the Yacht Harbour Association.

For those with their own aircraft, Jersey Aeroclub provides a warm welcome and courteous service. The club house has recently been refurbished and the fully equipped airfield has VOR/ILS, NDB, radar and customs available from 7.00am until 9.30pm daily. Landing fees are very reasonable.

Contact us
For further information or professional advice, please contact our relocations team. Our experts can advise on all lines of enquiry, from property to tax issues, fund management, regulation and employment. We have relationships with other professional advisers in Jersey and can also put you in touch with accountancy experts and individual contacts within the States of Jersey government for guidance in education, housing, income tax or health matters.

In the first instance and for all general enquiries, please send an email to relocation@careyolsen.com. You may also wish to contact one of the experts in our team directly:

Alex Ohlsson, Managing Partner
Telephone: +44 (0)1534 822251
Email: alex.ohlsson@careyolsen.com

Alan Stevens, Group Partner
Telephone: +44 (0)1534 822422
Email: alan.stevens@careyolsen.com

Christopher Philpott, Partner
Telephone: +44 (0)1534 822311
Email: chris.philpott@careyolsen.com

Robert Milner, Senior Associate
Telephone: +44 (0)1534 822336
Email: robert.milner@careyolsen.com

Simon Marks, Senior Associate
Telephone: +44 (0)1534 822252
Email: simon.marks@careyolsen.com

 

 

Carey Olsen 2009

www.careyolsen.com/downloads/co100675.pdf

 

 

 

If you have any comments about or contributions to make to this newsletter, please email advisor@eurekahedge.com

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