The most common form of business vehicle is the limited company. Jersey and Guernsey have their own company laws. Although all companies formed in one of these Islands are subject to the general company law applying in that Island, there is an important distinction in terms of tax treatment.
Companies incorporated in both Jersey and Guernsey are capable of being taxed in one of three ways:
- as an ordinary resident company subject to local income tax at the standard 20% rate;
- as an international company and subject to tax in Jersey at set rates varying between 0.5% and 2% on international income and at 30% on local income and in Guernsey at an agreed rate somewhere above 0% but not more than 30%;
- as an exempt company liable only to a flat-rate fee of £500 per annum.
There are some 31,100 companies registered in Jersey and 14,550 companies registered in Guernsey. In recent years, most registrations have been for beneficial owners who are individuals or companies resident outside the UK. Recent figures for new company registrations have been:
Jersey Guernsey 1994 3,370 1,360 1995 3,240 1,406 1996 3,261 1,448
These figures do not include companies registered in other territories but administered in the Channel Islands of which there are many in both Jersey and Guernsey.
In Guernsey it is possible to set up or transfer an existing Guernsey company into a protected cell company. A protected cell company is a single legal entity whose assets can be allocated to different cells within the company. Where assets are allocated to a cell only creditors who have entered into transactions with that cell or who have otherwise become creditors of the cell concerned have recourse against those assets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.