Like many jurisdictions favoured for locating companies, Jersey law allows for the redomiciliation (or continuance) of:
- foreign companies to Jersey (continuance in); and
- Jersey companies to a foreign jurisdiction (continuance out).
The relevant procedures are set out in Part 18C of the Companies (Jersey) Law 1991 and generally allow such movement to be a straightforward process. The requirements will vary depending on the circumstances, in particular whether the company is regulated in Jersey or elsewhere.
The first step is to ensure the laws in the relevant foreign jurisdiction allow for such company redomiciliation. It will be necessary to appoint legal advisers in both Jersey and the foreign jurisdiction. Set out below is a brief overview of the main Jersey requirements for both a continuance in and out.
The timing of a continuance in to Jersey will largely depend on the procedures of the foreign jurisdiction. Key requirements from a Jersey perspective are:
- Statement of Solvency: The directors (and proposed directors) must sign a statement confirming certain matters of solvency, including that they reasonably believe the company will be able to carry on business and discharge its liabilities as they fall due for 12 months after the date of such statement.
- Legal Opinion: A legal opinion must be obtained from a law firm in the foreign jurisdiction confirming certain matters of law, including that the continuance is permitted and has been correctly authorised.
The company will submit an application for continuance to the Jersey Financial Services Commission (JFSC). If approved, the company is registered as a Jersey company. The JFSC provides confirmation of such registration to the appropriate foreign authority.
A continuance out will generally take approximately 2 months, although this will vary on a case by case basis. Key requirements from a Jersey perspective are:
- Members Approval: The members of the company must approve the continuance by way of special resolution. Nonconsenting members are given 30 days from the passing of such resolution in which to apply to the court on the ground that the continuance would unfairly prejudice their interests.
- Creditor Notice: Notice of the continuance must be given to all creditors in writing and published in a Jersey newspaper. Creditors are given 30 days from the date of such notice in which to object to the continuance.
- Statement of Solvency: The directors (and proposed directors) must sign a statement confirming certain matters of solvency, including that they reasonably believe the company will be able to discharge its liabilities as they fall due once registered in the foreign jurisdiction.
- Legal Opinion: A legal opinion must be obtained from a law firm in the foreign jurisdiction confirming certain matters of law, including that the continuance is permitted.
An application for a continuance out may not be submitted to the JFSC until at least 31 days after the creditor notices have been sent and published. If approved, such approval will be subject to the conditions that:
- the Registrar is informed of the date on which the continuance is or will be granted in the foreign jurisdiction; and
- a certified copy of the instrument of continuance in the foreign jurisdiction is delivered to the Registrar as soon as possible.
Once the above conditions have been satisfied, the company ceases to be a company registered in Jersey.
As an alternative to a company continuing in to or out of Jersey, it is possible under Jersey law for a Jersey company to merge with a foreign company and continue as a company either in Jersey or the relevant foreign jurisdiction. It is necessary to ensure that the foreign jurisdiction allows such a cross-border merger. However, assuming that it does, this procedure streamlines what was previously a two-step process involving the redomiciliation of the relevant company and subsequent merger.
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.