Introduction
Jersey lies in the Bay of Mont St Michel and is the largest of the Channel Islands. It has been an island for approximately 8,000 years and at its extremes it measures 10 miles east to west and six miles north to south. It hosts a population of 91,533 (2008 est.) Jersey, Britons, Portuguese, Irish, French, other Ethnicities with English and France being the official languages.
The Island’s recorded history extends over a thousand years. Evidence of bronze-age and early Iron Age settlements can be found in many different locations around the island. While archaeological evidence of Roman influences has been found, in particular the coastal headlands site at the le Pinacle, Les Landes, where remains of a primitive structure are attributed to Roman temple worship, evidence for regular Roman occupation has yet to be established.
Business Environment
The authorities deter “active” foreign investment (new businesses and permanent immigration) but welcome “passive” investment (purchase of real estate for investment purposes, or the purchase of existing business assets). This is part of the administration’s general policy of protecting the island’s scarce resources. Therefore the island does not offer investment incentives, other than its permissive tax regime as such.
Economic Environment
Jersey’s economy is based on financial services, tourism electronic commerce and agriculture. Financial services contribute approximately sixty percent of the Island’s economy and the Island is recognized as one of the leading offshore financial centres.
Taxation
The Income Tax Law of 1928 introducing income tax was the first law entirely in English. Income tax has been levied at a flat rate of 20% for decades.
Jersey does not have VAT, but a GST of 3% was introduced in 2008
Banking
The Jersey currency is the pound (GBP), which is on par with the British pound, there are no exchange controls.
The Jersey Financial Services Commission’s quarterly report for the period to 30th September 2007 shows that almost 50 banks held bank deposits of GBP219.5 billion. These included subsidiaries or branches of the top banks from the US, the UK, Switzerland, Canada, Germany, Ireland, Israel, the Netherlands and Spain.
In addition to commercial banking, asset management, foreign exchange and securities trading, Jersey banks have recently become involved in a number of large securitization programmes. The creation of the Channel Islands Stock Exchange has encouraged the development of a larger capital issuance sector.
The issuance of SPVs (Special Purpose Vehicles) and Covered Warrants has been a rapidly growing business for Jersey: more than 1,000 of these instruments were created in 2001.
Banks can operate as limited companies or branches; or, in response to growing pressure on local resources, as managed units whereby another bank acts as a local manager, without the need for additional premises and staff.
Offshore Banking
All banks in Jersey are supervised by the Financial Services Commission under the Banking Business (Jersey) Law 1991 and accompanying regulations. An initial fee of GBP23,500 is payable on registration, and there are continuing annual registration fees.
Like other businesses, foreign-owned banks, whether formed as a limited liability company or as a branch, can take advantage of International Business Company status whereby they are taxed at a very low rate but can have administrative offices on the island.
